EXHIBIT 4.8
EXECUTION COPY
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HAWK CORPORATION,
THE GUARANTORS NAMED HEREIN
and
HSBC BANK USA
as Trustee
--------------------
INDENTURE
Dated as of October [15], 2002
--------------------
$100,000,000
12% Senior Notes due 2006
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CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
----------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(a)(5) 7.8; 7.10
(b) 7.8; 7.10; 11.2
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.6
(b) 11.3
(c) 11.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6; 11.2
(d) 7.6
314(a) 4.6; 4.9; 11.2
(b) N.A.
(c)(1) 11.4
(c)(2) 11.4
(c)(3) N.A.
(d) N.A.
(e) 11.5
(f) N.A.
315(a) 7.1(b)
(b) 7.5; 11.2
(c) 7.1(a)
(d) 7.1(c)
(e) 6.11
316(a) (last sentence) 2.10
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
(c) 9.4
317(a)(1) 6.8
(a)(2) 6.9
(b) 2.5
318(a) 11.1
(b)
(c) 11.1
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N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1
SECTION 1.1 Definitions............................................... 1
SECTION 1.2 Incorporation by Reference of TIA......................... 16
SECTION 1.3 Rules of Construction..................................... 16
ARTICLE II THE NOTES........................................................ 17
SECTION 2.1 Form and Dating........................................... 17
SECTION 2.2 Execution and Authentication; Aggregate Principal
Amount................................................. 17
SECTION 2.3 Additional Interest upon Excess Consolidated
Leverage Ratio......................................... 18
SECTION 2.4 Registrar and Paying Agent................................ 20
SECTION 2.5 Paying Agent To Hold Assets in Trust...................... 20
SECTION 2.6 Noteholder Lists.......................................... 21
SECTION 2.7 Transfer and Exchange..................................... 21
SECTION 2.8 Replacement Notes......................................... 21
SECTION 2.9 Outstanding Notes......................................... 22
SECTION 2.10 Treasury Notes............................................ 22
SECTION 2.11 Temporary Notes........................................... 22
SECTION 2.12 Cancellation.............................................. 23
SECTION 2.13 Defaulted Interest........................................ 23
SECTION 2.14 CUSIP Numbers............................................. 24
SECTION 2.15 Deposit of Monies and Additional PIK Notes................ 24
SECTION 2.16 Restrictive Legends....................................... 24
SECTION 2.17 Book-Entry Provisions for Global Security................. 25
ARTICLE III REDEMPTION...................................................... 26
SECTION 3.1 Notices to Trustee........................................ 26
SECTION 3.2 Selection of Notes To Be Redeemed......................... 26
SECTION 3.3 Notice of Redemption...................................... 26
SECTION 3.4 Effect of Notice of Redemption............................ 27
SECTION 3.5 Deposit of Redemption Price............................... 28
SECTION 3.6 Notes Redeemed in Part.................................... 28
ARTICLE IV COVENANTS........................................................ 28
SECTION 4.1 Payment of Notes.......................................... 28
SECTION 4.2 Maintenance of Office or Agency........................... 29
SECTION 4.3 Corporate Existence....................................... 29
SECTION 4.4 Payment of Taxes and Other Claims......................... 29
SECTION 4.5 Maintenance of Properties and Insurance................... 29
SECTION 4.6 Compliance Certificate; Notice of Default................. 30
SECTION 4.7 Compliance with Laws...................................... 30
SECTION 4.8 Waiver of Stay, Extension or Usury Laws................... 31
SECTION 4.9 Provision of Financial Statements and Information......... 31
SECTION 4.10 Limitation on Incurrence of Indebtedness.................. 31
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SECTION 4.11 Limitation on Restricted Payments......................... 34
SECTION 4.12 Limitation on Liens....................................... 36
SECTION 4.13 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries...................... 37
SECTION 4.14 Limitation on Transactions with Affiliates................ 38
SECTION 4.15 Change of Control......................................... 39
SECTION 4.16 Limitation on Asset Sales................................. 40
SECTION 4.17 Limitation on Designation of Unrestricted Subsidiaries.... 43
ARTICLE V SUCCESSOR CORPORATION............................................. 44
SECTION 5.1 Merger, Consolidation and Sale of Assets.................. 44
SECTION 5.2 Successor Corporation Substituted......................... 46
ARTICLE VI DEFAULT AND REMEDIES............................................. 46
SECTION 6.1 Events of Default......................................... 46
SECTION 6.2 Acceleration.............................................. 47
SECTION 6.3 Other Remedies............................................ 48
SECTION 6.4 Waiver of Past Defaults................................... 48
SECTION 6.5 Control by Majority....................................... 49
SECTION 6.6 Limitation on Suits....................................... 49
SECTION 6.7 Rights of Holders To Receive Payment...................... 50
SECTION 6.8 Collection Suit by Trustee................................ 50
SECTION 6.9 Trustee May File Proofs of Claim.......................... 50
SECTION 6.10 Priorities................................................ 50
SECTION 6.11 Undertaking for Costs..................................... 51
ARTICLE VII TRUSTEE......................................................... 51
SECTION 7.1 Duties of Trustee......................................... 51
SECTION 7.2 Rights of Trustee......................................... 52
SECTION 7.3 Individual Rights of Trustee.............................. 53
SECTION 7.4 Trustee's Disclaimer...................................... 53
SECTION 7.5 Notice of Default......................................... 54
SECTION 7.6 Reports by Trustee to Holders............................. 54
SECTION 7.7 Compensation and Indemnity................................ 54
SECTION 7.8 Replacement of Trustee.................................... 55
SECTION 7.9 Successor Trustee by Merger, Etc.......................... 56
SECTION 7.10 Eligibility; Disqualification............................. 56
SECTION 7.11 Preferential Collection of Claims Against Company......... 56
ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE......................... 57
SECTION 8.1 Satisfaction and Discharge of Indenture................... 57
SECTION 8.2 Defeasance or Covenant Defeasance......................... 58
SECTION 8.3 Application of Trust Money................................ 60
SECTION 8.4 Repayment to the Company.................................. 60
SECTION 8.5 Reinstatement............................................. 61
SECTION 8.6 Acknowledgment of Discharge by Trustee.................... 61
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ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS.............................. 61
SECTION 9.1 Without Consent of Holders and any Guarantor.............. 61
SECTION 9.2 With Consent of Holders................................... 62
SECTION 9.3 Compliance with TIA....................................... 63
SECTION 9.4 Payment for Consent....................................... 63
SECTION 9.5 Revocation and Effect of Consents......................... 64
SECTION 9.6 Notation on or Exchange of Notes.......................... 64
SECTION 9.7 Trustee To Sign Amendments, Etc........................... 64
ARTICLE X GUARANTEES........................................................ 65
SECTION 10.1 Unconditional Guarantee................................... 65
SECTION 10.2 Severability.............................................. 66
SECTION 10.3 Successors and Assigns; Release of a Guarantor............ 66
SECTION 10.4 Limitation of Guarantor's Liability....................... 66
SECTION 10.5 Contribution.............................................. 67
SECTION 10.6 Waiver of Subrogation..................................... 67
SECTION 10.7 Execution of Note Guarantee............................... 68
SECTION 10.8 Waiver of Stay, Extension or Usury Laws................... 68
SECTION 10.9 Additional Guarantors..................................... 68
SECTION 10.10 Modification.............................................. 68
ARTICLE XI MISCELLANEOUS.................................................... 69
SECTION 11.1 TIA Controls.............................................. 69
SECTION 11.2 Notices................................................... 69
SECTION 11.3 Communications by Holders with Other Holders.............. 70
SECTION 11.4 Certificate and Opinion as to Conditions Precedent........ 70
SECTION 11.5 Statements Required in Certificate or Opinion............. 70
SECTION 11.6 Rules by Trustee, Paying Agent, Registrar................. 71
SECTION 11.7 Legal Holidays............................................ 71
SECTION 11.8 Governing Law............................................. 71
SECTION 11.9 No Adverse Interpretation of Other Agreements............. 71
SECTION 11.10 No Recourse Against Others................................ 71
SECTION 11.11 Successors................................................ 71
SECTION 11.12 Duplicate Originals....................................... 71
SECTION 11.13 Severability.............................................. 72
SECTION 11.14 Independence of Covenants................................. 72
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INDENTURE, dated as of October [15], 2002, between Hawk Corporation, a
Delaware corporation (the "Company"), the Guarantors (as defined herein), and
HSBC Bank USA, a New York banking corporation and trust company, as Trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of 12% Senior
Notes due 2006 (collectively, the "Notes") such Notes to be issued initially in
connection with the exchange of certain 10 1/4% Senior Notes due 2003
(collectively, the "Old Notes") issued by the Company pursuant to an indenture
dated November 27, 1996 (as amended and supplemented, the "Old Indenture") and,
to provide therefor, the Company has duly authorized the execution and delivery
of this Indenture. All things necessary to make the Notes, when duly issued and
executed by the Company, and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of the Company, have been done.
Each party hereto agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Notes:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acquired Debt" means Indebtedness of an Acquired Person existing at
the time the Acquired Person merges with or into, or becomes a Restricted
Subsidiary of, such specified Person, including Indebtedness incurred in
connection with, or in contemplation of, the Acquired Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; provided,
however, that Indebtedness of such Acquired Person which is redeemed, defeased,
retired or otherwise repaid at the time of or immediately upon consummation of
the transactions by which such Acquired Person merges with or into or becomes a
Restricted Subsidiary of such specified Person shall not be Acquired Debt.
"Acquired Person" means a person merged with or into the Company.
"Additional Notes" means Notes issued from time to time by the Company
under this Indenture as provided in Section 2.2 in addition to the Initial
Notes.
"Additional PIK Notes" means any Note issued by the Company in order
to make a PIK Interest Payment.
"Adjusted Consolidated Leverage Ratio" means, with respect to any
period, the Consolidated Leverage Ratio; provided that (i) pro forma effect is
given to any Asset Sales (including the application of the proceeds of any Asset
Sales) that occur during the period, as if they had occurred and the proceeds
had been applied on the first day of the period, and (ii) pro forma effect is
given to any Asset Sales (including the application of the proceeds of any Asset
Sales) that have been made by any Person that has become a Restricted Subsidiary
or has merged with or into the Company or any of its Restricted Subsidiaries
during the period and
would have constituted Asset Sales had the transactions occurred when that
Person was a Restricted Subsidiary as if they were Asset Sales that occurred on
the first day of the period.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "Control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") of any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning provided in Section 2.17(a).
"Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Company or any Restricted Subsidiary of any assets (including
by way of a sale-and-leaseback) other than inventory in the ordinary course of
business or equipment not used or no longer useable in the ordinary course of
business, or (ii) the issuance or sale of Capital Stock of any Restricted
Subsidiary, in the case of each of (i) and (ii), whether in a single transaction
or a series of related transactions, to any Person (other than to the Company or
a Restricted Subsidiary and other than directors' qualifying shares) for Net
Proceeds in cash or Cash Equivalents in excess of $100,000.
"Asset Sale Offer" has the meaning provided in Section 4.16(c).
"Asset Sale Offer Purchase Date" has the meaning provided in Section
4.16(d).
"Asset Sale Offer Trigger Date" has the meaning provided in Section
4.16(c).
"Authenticating Agent" has the meaning provided in Section 2.2.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
state or foreign law for the relief of debtors.
"Board of Directors" means, as to (a) any corporate Person, the board
of directors of such Person or any duly authorized committee thereof, (b) any
partnership, limited liability company or comparably organized Person which is
ultimately controlled by a corporate general partner, managing member or other
corporation, the "Board of Directors" of such corporation as specified in clause
(a) of this definition and (c) any partnership, limited liability company or
comparably organized Person which is ultimately controlled by individuals, such
controlling individuals.
"Board Resolution" means, with respect to any Person, a copy of a
resolution of the Board of Directors certified by an executive officer of such
Person to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and delivered to the Trustee.
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"Business Day" means a day that is not a Legal Holiday.
"Capital Lease Obligation" of any Person means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease for property leased by such Person that would at such time be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership and limited liability company interests,
whether general or limited, of such Person, including any Preferred Stock.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Xxxxx'x Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Services or at least P-1 from Xxxxx'x
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
(or, with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $200 million; (v)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (iv) above; and (vi) investments
in money market funds that invest substantially all their assets in securities
of the types described in clauses (i) through (v) above.
"Cash Flow" means, with respect to any period, Consolidated Net Income
for such period, plus, to the extent deducted in computing such Consolidated Net
Income: (i) provision for taxes based on income or profits and any provision for
taxes utilized in computing extraordinary gains and losses, plus (ii)
Consolidated Interest Expense, plus (iii) depreciation, amortization and all
other non-cash charges (including amortization of goodwill and other intangibles
but excluding any such non-cash charge to the extent it represents an accrual of
a reserve, cash charges in any future period or amortization of a pre-paid cash
expense that was paid in a prior period not included in the prior calculation),
less (iv) any non-cash items to the extent that they increase Consolidated Net
Income (including the partial or entire reversal of reserves taken in a prior
period) for such period for the Company and any Restricted Subsidiary; provided
that if any Restricted Subsidiary is not a wholly owned Restricted Subsidiary of
the Company, then Cash Flow shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (A) the amount of Cash
Flow attributable to such Restricted Subsidiary, multiplied by (B) the
percentage ownership interest
3
in such Restricted Subsidiary not owned by the Company or any of its Restricted
Subsidiaries on the last day of such period.
"Change of Control" means the occurrence of any of the following
events after the Issue Date: (i) any "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act) (other than one or more
Permitted Holders) is or becomes (including by merger, consolidation or
otherwise) the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have beneficial ownership
of all shares that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the voting power of the total outstanding Voting
Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors of the Company then in office;
(iii) the approval by the holders of Capital Stock of the Company of any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the terms of this Indenture); or (iv) the sale or
other disposition (including by merger, consolidation or otherwise) of all or
substantially all of the Capital Stock or assets of the Company to any Person or
group (as defined in Rule 13d-5 of the Exchange Act) (other than to one or more
of the Permitted Holders) as an entirety or substantially as an entirety in one
transaction or a series of related transactions.
"Change of Control Offer" has the meaning provided in Section 4.15(a).
"Change of Control Purchase Date" has the meaning provided in Section
4.15(b).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the TIA, then the body performing such duties at such time.
"Common Stock" of any Person means any and all shares, interests,
participations, or other equivalents (however designated) of such Person's
common stock whether now outstanding or issued after the Issue Date.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.
"Consolidated Cash Flow Coverage Ratio" means, for any period, the
ratio of (i) the aggregate amount of Cash-Flow for such period, to (ii)
Consolidated Interest Expense for such period, determined on a pro forma basis
after giving pro forma effect to (a) the incurrence of the Indebtedness giving
rise to the calculation of the Consolidated Cash Flow Coverage Ratio and (if
applicable) the application of the net proceeds therefrom, including to
refinance
4
other Indebtedness, as if such Indebtedness was incurred, and the application of
such proceeds occurred, at the beginning of such period; (b) the incurrence,
repayment or retirement of any other Indebtedness by the Company and its
Restricted Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired at the beginning of such period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such period); (c) in the case
of Acquired Debt, the related acquisition as if such acquisition had occurred at
the beginning of such period; and (d) any acquisition or disposition by the
Company and its Restricted Subsidiaries of any company or any business or any
assets out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such period, assuming such
acquisition or disposition had been consummated on the first day of such period.
"Consolidated Interest Expense" means, with respect to any period, the
sum of (i) the interest expense of the Company and its Restricted Subsidiaries
for such period, including, without limitation, (a) amortization of debt
discount, (b) the net payments, if any, under interest rate contracts (including
amortization of discounts), (c) the interest portion of any deferred payment
obligation and (d) accrued interest, plus (ii) the interest component of the
Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued
by the Company and its Restricted Subsidiaries during such period, and all
capitalized interest of the Company and its Restricted Subsidiaries, plus (iii)
any payments or fees with respect to letters of credit, bankers' acceptances and
similar facilities, plus (iv) interest on Indebtedness guaranteed by the Company
and its Restricted Subsidiaries to the extent paid by the Company or any
Restricted Subsidiary, plus (v) all dividends paid during such period by the
Company and its Restricted Subsidiaries with respect to any Disqualified Stock
(other than by any Restricted Subsidiary to the Company or any other Restricted
Subsidiary and other than any dividend paid in Capital Stock (other than
Disqualified Stock)), and all dividends paid during such period by any
Restricted Subsidiary with respect to any Preferred Stock, in each case, as
determined on a consolidated basis in accordance with GAAP consistently applied;
provided that, if any Restricted Subsidiary is not a wholly owned subsidiary of
the Company, then Consolidated Interest Expense shall be reduced (to the extent
not otherwise reduced in accordance with GAAP) by an amount equal to (A) the
amount of Consolidated Interest Expense attributable to such Restricted
Subsidiary, multiplied by (B) the percentage ownership of such Restricted
Subsidiary not owned by the Company or any of its Restricted Subsidiaries on the
last day of such period.
"Consolidated Leverage Ratio" means, with respect to any period, the
ratio of (i) the aggregate actual amount of Indebtedness, including any
Permitted Indebtedness, of the Company and its Restricted Subsidiaries
outstanding at the end of that period to (ii) the aggregate actual amount of
Cash Flow of the Company and its Restricted Subsidiaries for the four fiscal
quarter period ending with that period.
"Consolidated Net Income" means, with respect to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied,
adjusted to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) all extraordinary gains and losses (less all
fees and expenses relating thereto), (ii) the portion of net
5
income (or loss) of the Company and its Restricted Subsidiaries allocable to
interests in unconsolidated Persons or Unrestricted Subsidiaries, except to the
extent of the amount of dividends or distributions actually paid to the Company
or its Restricted Subsidiaries by such other Person during such period, (iii)
net income (or loss) of any Person combined with the Company or any of its
Restricted Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of combination, (iv) net gains and losses (less all
fees and expenses relating thereto) in respect of disposition of assets
(including, without limitation, pursuant to sale and leaseback transactions)
other than in the ordinary course of business, (v) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income to the Company is not
at the time permitted, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (vi) the net income of any Person that is not a Restricted
Subsidiary, except to the extent of the actual amount of dividends or other
distributions paid to the Company or a Restricted Subsidiary by such Person
during such period, (vii) the cumulative effect of changes in accounting
principles, or (viii) any gain or loss realized on the termination of any
employee pension benefit plan.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such person.
"Covenant Defeasance" has the meaning provided in Section 8.2(b).
"Currency Agreement Obligations" means the obligations of any person
under a foreign exchange contract, currency swap agreement or other similar
agreement or arrangement to protect such person against fluctuations in currency
values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after the giving of notice or
passage of time or both would be, an Event of Default.
"Default Interest" has the meaning provided in Section 2.13.
"Default Interest Payment Date" has the meaning provided in Section
2.13.
"Defeasance" has the meaning provided in Section 8.2(a).
"Designation" has the meaning provided in Section 4.17(a).
"Designation Amount" has the meaning provided in Section 4.17(a).
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
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"Disqualified Stock" means (i) any Preferred Stock of any Restricted
Subsidiary and (ii) that portion of any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof (other than upon a change of control of the
Company in circumstances where the holders of the Notes would have similar
rights), in whole or in part on or prior to the stated maturity of the Notes.
"Dollars" and "$" means lawful money of the United States of America.
"DTC" means The Depository Trust Company, its nominees and successors.
"Event of Default" has the meaning provided in Section 6.1.
"Excess Proceeds" has the meaning provided in Section 4.16(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Indebtedness" has the meaning provided in Section
4.10(b)(iii).
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Foreign Subsidiary" means a Restricted Subsidiary not organized under
the laws of the United States or any political subdivision thereof and the
operations of which are located entirely outside the United States.
"GAAP" means generally accepted accounting principles in the United
States set forth in the Statements of Financial Accounting Standards and the
Interpretations, Accounting Principles Board Opinions and American Institute of
Certified Public Accountants Accounting Research Bulletins.
"Global Note" means a Note that evidences all or part of the Note that
is issued to a Depositary or a nominee thereof in accordance with Section 2.1.
"Guarantee" means, as applied to any obligation, (1) a guarantee
(other than endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (2) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantor" means (i) each Subsidiary of the Company in existence on
the Issue Date which are each of Allegheny Clearfield, Inc., Friction Products
Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk Precision Components Group, Inc.,
Xxxxxx, Inc., Xxxxx Metal Stamping, Inc., Net Shape Technologies LLC, Quarter
Master Industries, Inc., X.X. Xxxxxxx
7
Corp., X.X. Xxxxxxx Holdings, Inc., Sinterloy Corp., Tex Racing Enterprises,
Inc. and (ii) each Subsidiary (other than Foreign Subsidiaries and Unrestricted
Subsidiaries) created or acquired by the Company after the Issue Date that
guarantees the Notes.
"Holder" means the Person in whose name a Note is registered on the
Registrar's books.
"incur" has the meaning provided in Section 4.10(a).
"Indebtedness" means, with respect to any Person, without duplication,
and whether or not contingent, (i) all indebtedness of such Person for borrowed
money or which is evidenced by a note, bond, debenture or similar instrument,
(ii) all obligations of such Person to pay the deferred or unpaid purchase price
of property or services, which purchase price is due more than six months after
the date of placing such property in service or taking delivery and title
thereto or the completion of such service, (iii) all Capital Lease Obligations
of such Person, (iv) all obligations of such Person in respect of letters of
credit or bankers' acceptances issued or created for the account of such Person,
(v) to the extent not otherwise included in this definition, all net obligations
of such Person under Interest Rate Agreement Obligations or Currency Agreement
Obligations of such Person, (vi) all liabilities of others of the kind described
in the preceding clause (i), (ii) or (iii) secured by any Lien on any property
owned by such Person; provided, however, if the obligations secured by a Lien
(other than a Permitted Lien not securing any liability that would itself
constitute Indebtedness) on any assets or property have not been assumed by such
Person in full or are not such Person's legal liability in full, the amount of
such Indebtedness for purposes of this definition shall be limited to the lesser
of the amount of Indebtedness secured by such Lien and the Fair Market Value of
the property subject to such Lien, (vii) all Disqualified Stock issued by such
Person and all Preferred Stock issued by a Subsidiary of such Person (provided
that such Disqualified Stock shall be valued at the maximum fixed redemption or
repurchase price thereof), and (viii) to the extent not otherwise included, any
guarantee by such Person of any other Person's indebtedness or other obligations
described in clauses (i) through (vii) above (provided that such guarantee shall
be valued at the maximum principal amount thereof). "Indebtedness" of the
Company and the Restricted Subsidiaries shall not include current trade payables
incurred in the ordinary course of business and payable in accordance with
customary practices, and non-interest bearing installment obligations and
accrued liabilities incurred in the ordinary course of business that are not
more than 90 days past due. The principal amount outstanding of any Indebtedness
issued with original issue discount is the accreted value of such Indebtedness.
Notwithstanding the foregoing, Indebtedness shall not include Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds in
the ordinary course of business; provided that such Indebtedness is extinguished
within 3 Business Days of the incurrence thereof.
"Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of the Company or any Subsidiary
of the Company) is an employee, associate or Affiliate of the Company or a
Subsidiary of the Company, or (ii) who is
8
a director, employee, associate or Affiliate of another party (other than the
Company or any of its Subsidiaries) to the transaction in question.
"Initial Notes" means the Notes issued under this Indenture in
exchange for the Old Notes as provided in Section 2.2 hereof.
"Insider" has the meaning given such term in Title 11 of Chapter 11 of
the U.S. Code, as amended, to the date hereof and from time to time hereafter.
"Interest" on the Notes means interest, including any Default
Interest, on the Notes.
"Interest Payment Date" means the stated maturity of a cash payment of
interest on the Notes.
"Interest Rate Agreement Obligations" means, with respect to any
Person, the Obligations of such Person under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, to the date hereof and from time to time hereafter.
"Investment" means, with respect to any Person, any direct or indirect
loan or other extension of credit (including, without limitation, a guarantee)
or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness issued
by, any other Person. "Investment" shall exclude travel and similar advances to
officers and employees of the Company in the ordinary course of business and
extensions of trade credit by the Company and its Restricted Subsidiaries on
commercially reasonable terms in accordance with normal trade practices of the
Company or such Restricted Subsidiary, as the case may be. For the purposes of
Section 4.11, (i) "Investment" shall include and be valued at the Fair Market
Value of the net assets of any Restricted Subsidiary (to the extent of the
Company's equity interest in such Restricted Subsidiary) at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary and shall exclude
the Fair Market Value of the net assets of any Unrestricted Subsidiary at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary and
(ii) the amount of any Investment shall be the original cost of such Investment
plus the cost of all additional Investments by the Company or any of its
Restricted Subsidiaries, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment,
reduced by the payment of dividends or distributions in connection with such
Investment or any other amounts received in respect of such Investment;
provided, however, that no such payment of dividends or distributions or receipt
of any such other amounts shall reduce the amount of any Investment if such
payment of dividends or distributions or receipt of any such amounts would be
included in Consolidated Net Income. If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, the Company no longer owns,
9
directly or indirectly, greater than 50% of the outstanding Common Stock of such
Restricted Subsidiary, 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
Common Stock of such Restricted Subsidiary not sold or disposed of.
"Issue Date" means October [15], 2002, the date the Initial Notes are
issued under this Indenture.
"Junior PIK Indebtedness" means any Indebtedness of the Company that:
(i) is unsecured; (ii) is junior in right of payment to the Notes; (iii) does
not permit payments of cash interest prior to the Maturity Date; and (iv) does
not mature, allow or require any principal or other payments prior to (a) one
year after the Maturity Date in the event the payments on such Junior PIK
Indebtedness are owed to an Insider of the Company or (b) 90 days after the
Maturity Date in all other cases.
"Legal Holiday" has the meaning provided in Section 11.7.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in any asset and any filing of any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Maturity Date" means December 1, 2006.
"Net Proceeds" means, with respect to any Asset Sale by any Person,
the aggregate cash or Cash Equivalent proceeds received by such Person and/or
its Affiliates in respect of such Asset Sale, which amount is equal to the
excess, if any, of (i) the cash or Cash Equivalent received by such Person
and/or its Affiliates (including any cash payments received by way of deferred
payment pursuant to, or monetization of, a note or installment receivable or
otherwise, but only as and when received) in connection with such Asset Sale,
over (ii) the sum of (a) the amount of any Indebtedness that is secured by such
asset and which is required to be repaid by such Person in connection with such
Asset Sale, plus (b) all fees, commissions and other expenses incurred by such
Person in connection with such Asset Sale, plus (c) provision for taxes,
including income taxes, directly attributable to the Asset Sale or to required
prepayments or repayments of Indebtedness with the proceeds of such Asset Sale,
plus (d) if such Person is not a wholly-owned Restricted Subsidiary, any
dividends or distributions payable to holders of minority interests in such
Restricted Subsidiary from the proceeds of such Asset Sale.
"New Credit Facility" means any new senior secured credit facility
among the Company, certain of its Subsidiaries, and the lenders named therein as
the same may be amended, modified, renewed, refunded, replaced or refinanced
from time to time, including (i) any related notes, letters of credit,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time, and (ii) any notes, guarantees,
collateral
10
documents, instruments and agreements executed in connection with any such
amendment, modification, renewal, refunding, replacement or refinancing.
"Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.
"Note Guarantee" means the guarantee of the Notes by a Guarantor as
described in Section 10.1.
"Notes" mean the Initial Notes, any Additional Notes and any
Additional PIK Notes, treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness including all
obligations of the Company and the Guarantors under this Indenture, the Notes
and the Note Guarantees.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Senior Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Operating Officer, the Controller, or
the Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.4 and 11.5, as they relate to the making of an
Officers' Certificate, and delivered to the Trustee.
"Old Indenture" has the meaning provided in the preamble to this
Indenture.
"Old Notes" has the meaning provide in the preamble to this Indenture.
"Original Issue Date" means November 27, 1996, the issue date of the
Old Notes under the Old Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
11.4 and 11.5, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.4.
"Permitted Holders" means any of Xxxxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxxx, Xxxxx X. Xxxxxx or any "group" (as defined in Rule 13d-5 of the
Exchange Act) consisting of any or all of the foregoing.
"Permitted Indebtedness" has the meaning provided in Section 4.10(b).
"Permitted Investments" means (i) any Investment in the Company or any
Restricted Subsidiary that is a Guarantor of the Notes; (ii) any investment in
cash or Cash
11
Equivalents; (iii) any Investment in an Acquired Person if, as a result of such
Investment, (a) the Acquired Person becomes a Restricted Subsidiary and becomes
a Guarantor of the Notes or (b) the Acquired Person either (1) is merged,
consolidated or amalgamated with or into the Company or one of its Restricted
Subsidiaries that is a Guarantor of the Notes and the Company or such Restricted
Subsidiary is the Surviving Person, or (2) transfers or conveys substantially
all of its assets to, or is liquidated into, the Company or one of its
Restricted Subsidiaries that is a Guarantor of the Notes; provided that any
Investment pursuant to this clause (iii) in a Person that is or becomes a
Foreign Subsidiary shall not constitute the transfer of property (other than
cash); (iv) Investments in accounts and notes receivable acquired in the
ordinary course of business; (v) any notes, obligations or other securities
received in connection with an Asset Sale that complies with Section 4.16; (vi)
Interest Rate Obligations and Currency Agreement Obligations permitted pursuant
to Section 4.10(b)(v); and (vii) investments in or acquisitions of Capital Stock
or similar interests in Persons (other than Affiliates of the Company) received
in the bankruptcy or reorganization of or by such Person or any exchange of such
investment with the issuer thereof or taken in settlement of or other resolution
of claims or disputes.
"Permitted Liens" means (i) Liens securing Indebtedness under any New
Credit Facility securing Indebtedness permitted to be incurred pursuant to
Section 4.10(b)(i); (ii) Liens securing Indebtedness of a Person existing at the
time that such Person is merged into or consolidated with the Company or a
Restricted Subsidiary; provided, however, 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 such Person; (iii) Liens on property acquired by
the Company or a Restricted Subsidiary; provided, however, that such Liens were
in existence prior to the contemplation of such acquisition and do not extend to
any other property; (iv) Liens in respect of Interest Rate Obligations and
Currency Agreement Obligations permitted under this Indenture; (v) Liens in
favor of the Company, any Restricted Subsidiary or any Guarantor; (vi) Liens
existing on the Issue Date; (vii) Liens securing the Notes or the Note
Guarantees, if any; and (viii) Liens securing Permitted Indebtedness of the
Company or any Restricted Subsidiary incurred under Section 4.10(b)(viii)
hereof.
"Permitted Payments" has the meaning provided in Section 4.11(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PIK Accrual Period" has the meaning provided in Section 2.3.
"PIK Interest Payment" means the payment of the additional interest
payable by the issuance of Additional PIK Notes pursuant to Section 2.3 of this
Indenture.
"PIK Interest Payment Date" has the meaning provided in Section 2.3.
"PIK Record Date" means the date 15 days prior to the applicable PIK
Interest Payment Date.
12
"Preferred Stock" as applied to the Capital Stock of any Person, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over Capital Stock of any other class of such Person.
"Principal" of any Indebtedness (including the Notes) means the
principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.
"Public Equity Offering" means an underwritten public offering of
Capital Stock (other than Disqualified Capital Stock) of the Company pursuant to
an effective registration statement filed under the Securities Act.
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Company or the Restricted Subsidiaries,
and any additions and accessions thereto, which are purchased, constructed or
improved by the Company or any Restricted Subsidiary at any time after the Issue
Date; provided, however, that (i) any security agreement or conditional sales or
other title retention contract pursuant to which the Lien on such assets is
created (collectively, a "Security Agreement") shall be entered into within 90
days after the purchase or substantial completion of the construction or
improvement of such assets and shall at all times be confined solely to the
assets so purchased, constructed or improved, any additions and accessions
thereto and any proceeds therefrom, (ii) at no time shall the aggregate
principal amount of the outstanding Indebtedness secured thereby be increased,
except in connection with the purchase of additions and accessions thereto and
except in respect of fees and other obligations in respect of such indebtedness
and (iii) (a) the aggregate outstanding principal amount of Indebtedness secured
thereby (determined on a per asset basis in the case of any additions and
accessions) shall not at the time such Security Agreement is entered into exceed
100% of the purchase price or cost of construction or improvement to the Company
or any Restricted Subsidiary of the assets subject thereto or (b) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased, constructed or improved, any additions and accessions thereto and any
proceeds therefrom.
"Record Date" means the Record Dates specified in the Notes; provided,
however, that if any such date is a Legal Holiday, the Record Date shall be the
first day immediately preceding such specified day that is not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Redesignation" has the meaning provided in Section 4.17(b).
"Refinancing" has the meaning provided in Section 4.10(b)(vii).
"Refinancing Indebtedness" has the meaning provided in Section
4.10(b)(vii).
"Registrar" has the meaning provided in Section 2.4.
13
"Required Filing Dates" has the meaning provided in Section 4.9(a).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" means (i) any dividend or other distribution
declared or paid on any Capital Stock of the Company (other than (a) dividends
or distributions payable solely in Capital Stock (other than Disqualified Stock)
of the Company or (b) dividends or distributions payable to the Company or any
Restricted Subsidiary); (ii) any payment to purchase, redeem or otherwise
acquire or retire for value any Capital Stock of the Company or a Restricted
Subsidiary (other than for the Company or a Restricted Subsidiary); (iii) any
payment to purchase, redeem, defease or otherwise acquire or retire for value,
prior to any scheduled maturity, repayment or sinking fund payment, any
Subordinated Indebtedness other than a purchase, redemption, defeasance or other
acquisition or retirement for value that is paid for with the proceeds of
Refinancing Indebtedness that is permitted under Section 4.10(b)(vii); or (iv)
any Restricted Investment.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
the Company other than an Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Senior Debt" means the principal of and interest (including
post-petition interest) on, and all other amounts owing in respect of, any New
Credit Facility and Indebtedness evidenced by the Notes. Notwithstanding the
foregoing, Senior Debt shall not include (i) any Indebtedness for federal,
state, local or other taxes, (ii) any Indebtedness of the Company to any of its
Subsidiaries or any of its Affiliates, (iii) any Indebtedness incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business or any obligations in respect of any such Indebtedness, (iv) any
Indebtedness that is incurred in violation of this Indenture or (v) Indebtedness
of the Company that is expressly subordinate or junior in right of payment
(other than as a result of the indebtedness being unsecured) to any other
Indebtedness of the Company.
"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 S-X is in effect
on the Issue Date.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment to the Notes.
"Subsidiary" of a Person means (i) any corporation more than 50% of
the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any limited
liability company of which such Person or any Subsidiary of such Person is a
manager, or (iv) any other Person (other than a corporation, limited liability
company or limited partnership) in which such Person or one or more other
Subsidiaries of such Person, or such Person and one or more
14
other Subsidiaries thereof, directly or indirectly, has more than 50% of the
outstanding partnership, limited liability company or similar interests or has
the power, by contract or otherwise, to direct or cause the direction of the
policies, management and affairs thereof.
"Surviving Person" means, with respect to any Person involved in or
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.3.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer this Indenture, or in the case of a
successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.17 and not
redesignated a Restricted Subsidiary in compliance with such covenant.
"U.S. Government Obligations" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" of a Person means Capital Stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, with (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.
15
SECTION 1.2 Incorporation by Reference of TIA.
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture. The following
TIA terms used in this indenture have the following meanings:
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Holder or a Noteholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
"Obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
and not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.3 Rules of Construction.
Unless the context otherwise requires:
1. a term has the meaning assigned to it;
2. an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP as in effect on the date hereof;
3. unless otherwise specifically set forth herein, all calculations or
determinations of a Person shall be performed or made on a consolidated basis in
accordance with GAAP but shall not include the accounts of Unrestricted
Subsidiaries, except to the extent of dividends and distributions actually paid
to the Company or any of its Restricted Subsidiaries;
4. the principal amount of any non-interest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
GAAP;
5. unless otherwise expressly provided herein, the principal amount of
any Preferred Stock shall be greater of (a) the maximum liquidation value of
such Preferred Stock, or (b) the maximum mandatory redemption or mandatory
repurchase price with respect to such Preferred Stock;
6. "or" is not exclusive;
7. words in the singular include the plural, and words in the plural
include the singular;
16
8. a reference to a Section or Article shall be to a Section or
Article of this Indenture;
9. "herein", "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
10. any reference to a statute, law or regulation means that statute,
law or regulation as amended and in effect from time to time and includes any
successor statute, law or regulation; provided, however, that any reference to
the Bankruptcy Law shall mean the Bankruptcy Law as applicable to the relevant
case.
ARTICLE II
THE NOTES
SECTION 2.1 Form and Dating.
The Notes and the Trustee's certificate of authentication relating thereto
shall be substantially in the form of EXHIBIT A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.
The terms and provisions contained in the Notes, annexed hereto as EXHIBIT
A, shall constitute, and are hereby expressly made, a part of this Indenture
and, to the extent applicable, the Company, the Guarantors and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The Notes shall be issued initially in the form of one or more permanent
global Notes in registered form, substantially in the form set forth in EXHIBIT
A (the "Global Notes"), deposited with the Trustee, as custodian for DTC, duly
executed by the Company and authenticated by the Trustee as hereinafter provided
and shall bear the legend set forth in Section 2.16. The aggregate principal
amount of the Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for DTC, as
hereinafter provided.
SECTION 2.2 Execution and Authentication; Aggregate Principal Amount.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was an
Officer or Assistant Secretary at the time of such execution but no longer holds
that office or position at the time the Trustee authenticates the Note, the Note
shall nevertheless be valid.
17
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Notes for original issue in an aggregate
principal amount not to exceed $66,700,000 upon a written order of the Company
(the "Initial Notes") and (ii) Additional Notes upon a written order issued from
time to time by the Company. In addition, the Trustee shall authenticate
Additional PIK Notes from time to time upon a written order of the Company. Such
order or orders shall specify the amount of Notes to be authenticated and the
date on which the Notes are to be authenticated, whether the Notes are to be
issued as definitive Notes or Global Notes or such other information as the
Trustee may reasonably request. The aggregate principal amount of Notes
outstanding at any time may not exceed $100,000,000, including, but not limited
to, the aggregate principal amount of Additional PIK Notes issued pursuant to
Section 2.3 of this Indenture, except as provided in Section 2.8.
The aggregate principal amount of the Notes may be changed from time to
time in an aggregate principal amount not to exceed $100,000,000, except as
provided in Section 2.8. All of the Notes need not be issued at the same time
and, unless otherwise provided, a previous issuance of Notes may be reopened,
without notice to or the consent of any Holder, for issuance of Additional Notes
of the same tranche, and the Additional Notes will be consolidated and form a
single tranche with the previously issued Notes.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the 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 Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.
Unless otherwise specified in the written order of the Company pertaining
to an issuance of Notes, the Notes shall be issuable in fully registered form
only, without coupons, and in denominations of $1,000 and integral multiples
thereof. Notwithstanding the foregoing, Additional PIK Notes may be issued in
any denomination.
SECTION 2.3 Additional Interest upon Excess Consolidated Leverage Ratio.
The Company will determine on March 31 (or if earlier, on the Required
Filing Date for an annual report) and August 14 (or if earlier, on the Required
Filing Date for a quarterly report for the second quarter) of each year (a "PIK
Interest Payment Date"), the Consolidated Leverage Ratio of the Company as of
the end of the immediately preceding six-month, semi-annual period ending on the
immediately preceding Interest Payment Date (a "PIK Accrual Period"). If the
Consolidated Leverage Ratio of the Company exceeds 4.00 to 1.00 as of the end of
such PIK Accrual Period, beginning with the PIK Accrual Period ending on
December 31, 2002, then the Company shall pay, to each Holder of record on the
PIK Record Date immediately preceding such PIK Interest Payment Date, an amount
of additional interest on the principal amount of the Notes held by that Holder,
from the first day of the applicable PIK Accrual Period (or, in the case of the
PIK Accrual Period ending December 31, 2002, from the
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Issue Date) through the immediately preceding Interest Payment Date, at the
applicable rate per annum set forth below:
Rate of PIK Interest
Consolidated Leverage Ratio Payment
--------------------------- --------------------
More than 4.00 and equal to or less than 4.24 to 1.00 0.25%
4.25 or more and to equal to or less than 4.49 to 1.00 0.50%
4.50 or more and to equal to or less than 4.74 to 1.00 0.75%
4.75 or more and to equal to or less than 4.99 to 1.00 1.00%
5.00 or more and to equal to or less than 5.24 to 1.00 1.25%
5.25 or more and to equal to or less than 5.49 to 1.00 1.50%
5.50 or more and to equal to or less than 5.74 to 1.00 1.75%
5.75 or more to 1.00 2.00%
Any such interest payable pursuant to this Section shall be paid by the
Company in the form of Additional PIK Notes that are (a) identical in all
respects to the Notes with respect to which such Additional PIK Notes are issued
and (b) dated as of the day following the Interest Payment Date immediately
preceding the applicable PIK Interest Payment Date. Interest on such Additional
PIK Notes shall accrue from the day following the Interest Payment Date
immediately preceding the applicable PIK Interest Payment Date. The Additional
PIK Notes shall be issued in an aggregate principal amount equal to the amount
of additional interest that is to be paid on the aggregate principal amount of
Notes (including any previously issued Additional PIK Notes) outstanding as of
the applicable PIK Record Date at the applicable rate of additional interest set
forth above, calculated on the basis of a 360-day year (without any compounding
of such interest). The Additional PIK Notes shall be issued on or as soon as
practicable (and in any event within ten days) after the applicable PIK Interest
Payment Date. Notwithstanding the foregoing, if the Company shall be required to
pay any additional interest in a denomination less than $1,000, the Company,
may, at its option, pay such additional interest by making cash payments in the
amount of any Additional PIK Note that would be required pursuant to this
Section 2.3.
By way of example, if on August 14, 2003 (the PIK Interest Payment Date)
the Company determines that its Consolidated Leverage Ratio for the PIK Accrual
Period ending June 30, 2003 is 4.25 to 1.00, then the Company will issue
Additional PIK Notes to each Holder of record of Notes on July 30, 2003 (the PIK
Record Date) in a principal amount equal to $2.50 for each $1,000 of Notes held
by that Holder ($2.50 being the amount of additional interest accrued during
that PIK Accrual Period on $1,000 of Notes at the rate of 0.50% per annum).
Those Additional PIK Notes will be dated as of July 1, 2003, and will start
accruing cash interest as of July 1, 2003, but will be issued on or within ten
days after August 14, 2003.
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If a Redemption Date, Change of Control Purchase Date or Asset Sale Offer
Purchase Date occurs during the period after the immediately preceding PIK
Accrual Period but before the next PIK Interest Payment Date, then the Company
shall pay to the Holder of any redeemed or purchased Note an amount in cash
equal to the sum of (a) the principal amount of the Additional PIK Note, if any,
that would have been issued to that Holder with respect to the preceding PIK
Accrual Period, plus (b) the premium, if any, payable on that Additional PIK
Note had it been issued and outstanding on the Redemption Date, Change of
Control Purchase Date or Asset Sale Offer Purchase Date, plus (c) all accrued
and unpaid cash interest due in respect of such Additional PIK Note from the day
after the preceding Interest Payment Date.
SECTION 2.4 Registrar and Paying Agent.
The Company shall maintain an office or agency (which shall be located in
the Borough of Manhattan in The City of New York, State of New York) where (a)
Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their registration of transfer and exchange. The
Company, upon prior written notice to the Trustee, may have one or more
co-Registrars and one or more additional Paying Agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional Paying Agent. The
Company may act as its own Paying Agent, except that for the purposes of
payments on the Notes pursuant to Sections 4.15 and 4.16, neither the Company
nor any Affiliate of the Company may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee, in advance, of the name and address
of any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
or fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any of
the Registrar, the Paying Agent or any other agent may resign upon 30 days'
notice to the Company.
SECTION 2.5 Paying Agent to Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
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Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.
SECTION 2.6 Noteholder 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
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee before each Record Date and at
such other times as the Trustee may request in writing a list as of such date
and in such form as the Trustee may reasonably require of the names and
addresses of the Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.7 Transfer and Exchange.
When Notes are presented to the Registrar or a co-Registrar with a request
to register the transfer of such Notes or to exchange such Notes for an equal
principal amount of Notes of other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company or the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company or the Trustee 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
exchanges or transfers pursuant to Sections 2.11, 3.6, 4.15, 4.16 or 9.5, in
which event the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Note being redeemed in part and (iii) during a Change of Control
Offer or an Asset Sale Offer if such Note is tendered pursuant to such Change of
Control Offer or Asset Sale Offer and not withdrawn.
Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book-entry system.
SECTION 2.8 Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the
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Trustee or the Company, such Holder must provide an indemnity bond or other
indemnity of reasonable tenor, sufficient in the reasonable judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Note is replaced. Every replacement
Note shall constitute an additional obligation of the Company.
SECTION 2.9 Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.10, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.8 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a protected
purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note
and replacement thereof pursuant to Section 2.8.
If on a Redemption Date or the Maturity Date the Paying Agent (other than
the Company) holds U.S. Legal Tender or U.S. Government Obligations sufficient
to pay all of the principal and interest due on the Notes payable on that date
and is not prohibited from paying such money to the Holders thereof pursuant to
the terms of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.10 Treasury Notes.
In determining (i) whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice or (ii) how
much principal amount of Notes remains outstanding after a redemption under
Paragraph 6(b) of the Notes, Notes owned by the Company or an Affiliate shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent under clause (i) above, only Notes which a Trust
Officer of the Trustee actually knows are so owned shall be so considered.
The Company shall notify the Trustee, in writing, when it or, to the
Company's knowledge, any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.
SECTION 2.11 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt, or a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes and so indicates in
the Officers' Certificate. Without unreasonable delay, the Company shall prepare
and the Trustee shall
22
authenticate upon receipt of a written order of the Company pursuant to Section
2.2 definitive Notes in exchange for temporary Notes.
SECTION 2.12 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel and, at the written direction of the Company,
shall dispose, in its customary manner, of all Notes surrendered for
registration of transfer, exchange, payment or cancellation. Subject to Section
2.8, the Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes unless and until the same are
surrendered to the Trustee for cancellation pursuant to this Section 2.12.
SECTION 2.13 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes (including
interest payable in the form of Additional PIK Notes), it shall pay the
defaulted interest, plus (to the extent lawful) (i) any interest payable on the
defaulted interest in cash and (ii) an additional amount equal to 2% per annum,
computed on the basis of a 360-day year of twelve 30-day months and, in the case
of a partial month, the actual number of days elapsed, in cash (the "Default
Rate"), to the Persons who are Holders on a subsequent special record date,
which special record date shall be the fifteenth day next preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. 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 (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such defaulted interest as provided in this Section; provided, however, that in
no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date, the
Company shall mail (or cause to be mailed) to each Holder, as of a recent date
selected by the Company, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.1(i) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
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SECTION 2.14 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers, and, if so, the
Trustee shall use the CUSIP numbers in notices of redemption or exchange as a
convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
numbers printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
SECTION 2.15 Deposit of Monies and Additional PIK Notes.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control Purchase Date and Asset Sale
Offer Purchase Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Control Purchase Date, as the case may be, in a
timely manner which permits the Paying Agent to remit payment to the Holders on
such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Offer Purchase Date, as the case may be. On or as
soon as practicable (and in any event within ten days) after each PIK Interest
Payment Date, Redemption Date, Change of Control Purchase Date and Asset Sale
Offer Purchase Date, the Company shall deposit with the Paying Agent duly issued
and authenticated Additional PIK Notes, dated as of the immediately preceding
Interest Payment Date, or in immediately available funds, money sufficient to
make cash payments, for any and all additional interest due on such PIK Interest
Payment Date, Redemption Date, Change of Control Purchase Date or Asset Sale
Offer Purchase Date, as the case may be, pursuant to Section 2.3 hereof.
SECTION 2.16 Restrictive Legends.
Each Global Note shall bear the following legend on the face thereof:
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
24
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE.
SECTION 2.17 Book-Entry Provisions for Global Security.
(a) The Global Note initially shall (i) be registered in the name of
DTC or the nominee of such DTC, (ii) be delivered to the Trustee as custodian
for such DTC and (iii) bear legends as set forth in Section 2.16.
Members of, or participants in, DTC ("Agent Members") shall have no
rights under this Indenture with respect to any Global Note held on their behalf
by DTC, or the Trustee as its custodian, or under the Global Note, and DTC may
be treated by the Company, the Trustee and any Agent as the absolute owner of
the Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any Agent from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices governing the exercise of the rights of a holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers in
whole, but not in part, to DTC, its successors or their respective nominees.
Interests of beneficial owners in the Global Note may be transferred or
exchanged for definitive Notes in accordance with the rules and procedures of
DTC. In addition, definitive Notes shall be transferred to all beneficial owners
in exchange for their beneficial interest in the Global Note if (i) DTC notifies
the Company that it is unwilling or unable to continue as DTC for the Global
Note and a successor depositary is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar has received a written request from DTC to issue definitive Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
definitive Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate and deliver, to each beneficial owner
identified by DTC in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of definitive Notes of authorized
denominations.
(e) The Holder of the Global Note may grant proxies and otherwise
authorize any person, including Agent Members and persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
25
(f) The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to this Section 2.17. The Company
shall have the right to inspect and make copies of all such letters, notices and
other written communications at any reasonable time during the Registrar's
normal business hours upon the giving of reasonable written notice to the
Registrar.
ARTICLE III
REDEMPTION
SECTION 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to Paragraph 6 of the Notes,
it shall notify the Trustee and the Paying Agent in writing of the Redemption
Date and the principal amount of the Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.1 at
least 60 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.2 Selection of Notes to be Redeemed.
If fewer than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed 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 listed on a national securities exchange, by lot or by
such method as the Trustee shall deem fair and appropriate; provided, however,
that if the Notes are redeemed pursuant to Paragraph 6(b) of the Notes, the
Notes shall be redeemed solely on a pro rata basis or on as nearly a pro rata
basis as practicable (subject to the procedures of DTC or any other depositary),
unless such method is otherwise prohibited. If the Notes are listed on any
national securities exchange, the Company shall notify the Trustee of the
requirements of such exchange in respect of any redemption. The Trustee shall
make the selection from the Notes outstanding and not previously called for
redemption and 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 in denominations
of $1,000 or less may be redeemed only in whole. The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple thereof) of the
principal of Notes that have denominations larger than $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
SECTION 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by first class
mail to each Holder whose Notes are to be redeemed, with a copy to the Trustee
and any Paying Agent. At the Company's
26
request, the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense. The Company shall provide such notices of
redemption to the Trustee at least five days before the intended mailing date.
Each notice for redemption shall identify (including the CUSIP number) the
Notes to be redeemed and shall state:
1. the Redemption Date and, if applicable, the next PIK Interest
Payment Date;
2. the Redemption Price and the amount of accrued interest, if any, to
be paid;
3. the procedures, if applicable, for the redemption of any Additional
PIK Notes that would otherwise be issued on the next PIK Interest Payment Date;
4. the name and address of the Paying Agent;
5. the subparagraph of the Notes pursuant to which such redemption is
being made;
6. that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
7. that, unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date (except as described in Section 2.3 hereof with respect to any
Additional PIK Notes that would be issuable with regard to such Notes on the
next PIK Interest Payment Date, if such redemption shall occur after the
immediately preceding Interest Payment Date and on or prior to such PIK Interest
Payment Date), and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price plus accrued interest, if any, upon
surrender to the Paying Agent of the Notes redeemed;
8. 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, and upon
surrender of such Note, a new Note or Notes in the aggregate principal amount
equal to the unredeemed portion thereof will be issued; and
9. if fewer than all the Notes are to be redeemed, the identification
of the particular Notes (or portion thereof) to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate principal
amount of Notes to be outstanding after such partial redemption.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.3, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price plus accrued interest, if any. Upon surrender to the Trustee or
Paying Agent, such Notes called for
27
redemption shall be paid at the Redemption Price plus accrued interest thereon
to the Redemption Date, but installments of interest, the maturity of which is
on or prior to the Redemption Date, shall be payable to Holders of record at the
close of business on the relevant record dates referred to in the Notes.
SECTION 3.5 Deposit of Redemption Price.
On or before 10:00 a.m., New York City time, on any the Redemption Date and
in accordance with Section 2.15 hereof, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient into pay the Redemption Price plus
accrued interest, if any, of all Notes to be redeemed on that date, plus an
amount in cash sufficient to redeem any Additional PIK Notes after the
Redemption Date pursuant to the procedures provided in Section 2.3 therefor. The
Paying Agent shall promptly return to the Company any U.S. Legal Tender so
deposited which is not required for those purposes, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Trustee shall
authenticate for the Holder a new Note or Notes equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Notes.
(a) The Company shall pay the principal of and interest on the Notes
on the dates and in the manner provided in the Notes and in this Indenture.
(b) An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or any of its Affiliates) holds, prior to 10:00 a.m. New York City
time on that date, U.S. Legal Tender (or Additional PIK Notes, in the case of a
PIK Interest Payment) designated for and sufficient to pay the installment in
full and is not prohibited from paying such money to the Holders pursuant to the
terms of this Indenture or the Notes.
(c) The Company shall pay in cash, to the extent such payments are
lawful, interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the Default Rate. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
28
(d) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section 2.4.
The Company shall give prior written notice to the Trustee of the location, and
any change in the location of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address, of the Trustee set
forth in Section 11.2.
SECTION 4.3 Corporate Existence.
Except as otherwise permitted by Article V or by Section 4.16, the Company
shall do or cause to be done, at its own cost and expense, all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate existence of each of the Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Restricted Subsidiary; provided, however, that the Company shall not
be required to preserve, with respect to itself, any material right or franchise
and, with respect to any Restricted Subsidiary, any such existence, material
right or franchise, if the Board of Directors of the Company shall determine in
good faith 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.
SECTION 4.4 Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any Restricted Subsidiary
or properties of it or any Subsidiary and (ii) all material lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any Restricted Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.
SECTION 4.5 Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each Restricted Subsidiary to,
maintain all properties used or useful in the conduct of its business in good
working order and condition (subject to ordinary wear and tear) and make all
necessary repairs, renewals, replacements, additions, betterments and
improvements thereto and actively conduct and carry on its business; provided,
however, that nothing in this Section 4.5 shall prevent the Company
29
or any Restricted Subsidiary from discontinuing the operation and maintenance of
any of its properties, if such discontinuance is (i) in the ordinary course of
business pursuant to customary business terms or (ii) in the good faith judgment
of the Board of Directors or other governing body of the Company or the
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for itself and
each Restricted Subsidiary, insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Company, are adequate and appropriate for the conduct of the business of the
Company and such Restricted Subsidiary in a prudent manner, with reputable
insurers or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Company, for
companies similarly situated in the industry.
SECTION 4.6 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within 105 days after
the end of the Company's fiscal year, a certificate signed by the Chairman of
the Board of Directors, the Vice-Chairman of the Board of Directors, the Chief
Executive Officer, the President or any Vice President and by the Chief
Financial Officer, Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company (provided, however, that one of such
signatories shall be the Company's principal executive officer, principal
financial officer or principal accounting officer), as to such Officers'
knowledge of the Company's compliance with all conditions and covenants under
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and in the event any Default exists, such Officers shall
specify the nature of such Default. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end or change its independent certified public accountants.
(b) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.2 hereof,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.
SECTION 4.7 Compliance with Laws.
The Company shall comply, and shall cause each Restricted Subsidiary to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
hereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not singly or in the
aggregate have a
30
material adverse effect on the financial condition, business or results of
operations of the Company and the Restricted Subsidiaries, taken as a whole.
SECTION 4.8 Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 4.9 Provision of Financial Statements and Information.
(a) So long as any Notes are outstanding, whether or not the Company
is then subject to Section 13(a) or 15(d) of the Exchange Act, the Company will
file with the Commission, the annual reports, quarterly reports and other
periodic reports which the Company would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) if the Company were so
subject, and such documents shall be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject;
provided the Commission will accept such filings.
(b) The Company will also in any event (i) within 15 days of each
Required Filing Date, file with the Trustee, and supply the Trustee with copies
for delivery to the holders of the Notes, the annual reports, quarterly reports
and other periodic reports which the Company would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if
the Company were subject to such Sections and (ii) if the Commission will not
accept the filing of such documents promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective holder of the Notes.
SECTION 4.10 Limitation on Incurrence of Indebtedness.
(a) On and after the Issue Date, the Company shall not, and shall not
permit any Restricted Subsidiary to, create, incur, issue, assume or directly or
indirectly guarantee or in any other manner become directly or indirectly liable
for ("incur") any Indebtedness (including Acquired Debt), except that the
Company may incur Indebtedness (including Acquired Debt) if, at the time of, and
immediately after giving pro forma effect to, such incurrence of Indebtedness,
(i) the Consolidated Cash Flow Coverage Ratio of the Company for the most
recently ended four fiscal quarters would be at least 2.5 to 1.0 and (ii) the
Adjusted Consolidated Leverage Ratio for the most recently ended four fiscal
quarters of the Company would be no greater than 3.5 to 1.0.
31
(b) The foregoing limitations will not apply to the incurrence of any
of the following (collectively, "Permitted Indebtedness"), each of which shall
be given independent effect:
(i) Indebtedness of the Company and any Restricted Subsidiary
arising under the New Credit Facility in an aggregate principal amount not
to exceed, at any time outstanding, the lesser of (A) $53.0 million or (B)
the amount permitted to be borrowed under the New Credit Facility at such
time;
(ii) Indebtedness of the Company represented by the Additional
PIK Notes and Indebtedness in the form of Note Guarantees issued by any
Subsidiaries that the Company directly or indirectly creates or acquires
after the Issue Date;
(iii) other Indebtedness of the Company or any Restricted
Subsidiary that is outstanding on the Issue Date in an aggregate principal
amount not to exceed $6.0 million ("Existing Indebtedness");
(iv) Indebtedness owed by any Restricted Subsidiary to the
Company or to another Restricted Subsidiary, or owed by the Company to any
Restricted Subsidiary that, if owed to a Restricted Subsidiary that is not
a Guarantor, is unsecured and subordinated in right of payment to the
payment and performance of the Company's obligations under the Indenture
and the Notes; provided, however, that any such Indebtedness shall at all
times be held by a Person which is either the Company or a Restricted
Subsidiary; provided, further, however, that upon either (A) the transfer
or other disposition of any such Indebtedness to a Person other than the
Company or another Restricted Subsidiary or (B) the sale, lease, transfer
or other disposition of shares of Capital Stock (including by consolidation
or merger) of any such Restricted Subsidiary to a Person other than the
Company or another Restricted Subsidiary, the incurrence of such
Indebtedness shall be deemed to be an incurrence that is not permitted by
this clause (iv);
(v) Indebtedness of the Company or any Restricted Subsidiary
arising with respect to Interest Rate Agreement Obligations and Currency
Agreement Obligations incurred for the purpose of fixing or hedging
interest rate risk or currency risk with respect to any fixed or floating
rate Indebtedness that is permitted by the terms of this Indenture to be
outstanding or with respect to any receivable or liability the payment of
which is determined by reference to a foreign currency;
(vi) Indebtedness represented by performance, completion,
guarantee, surety and similar bonds provided by the Company or any
Restricted Subsidiary in the ordinary course of business consistent with
past practice;
(vii) Indebtedness incurred in connection with or given in
exchange for the renewal, extension, substitution, refunding, defeasance,
refinancing or replacement, in whole or in part, (a "Refinancing") of any
Indebtedness of the Company or a Restricted Subsidiary incurred as
permitted under Section 4.10(a) or any Indebtedness described in clauses
(i), (ii) or (iii) above and this clause (vii) ("Refinancing
Indebtedness"); provided, however, that (A) the principal amount of such
32
Refinancing Indebtedness shall not exceed the principal amount (or accreted
amount, if less) of the Indebtedness so refinanced (plus the premiums and
reasonable expenses to be paid in connection therewith, which, with respect
to such premiums, shall not exceed the stated amount of any premium or
other payment required to be paid in connection with such a refinancing
pursuant to the terms of the Indebtedness being refinanced); (B) the
maturity of the Refinancing Indebtedness shall not be shorter than the
maturity of the Indebtedness being refinanced (provided that such
Refinancing Indebtedness does not permit the redemption or other retirement
of such Refinancing Indebtedness prior to its stated maturity); (C) the
Refinancing Indebtedness shall have a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being refinanced; and (D) the Refinancing Indebtedness shall
be at least as subordinated in right of payment to the Notes as the
Indebtedness being refinanced;
(viii) Indebtedness of the Company or any Restricted Subsidiary
(A) representing Capitalized Lease Obligations and any refinancings thereof
and/or (B) in respect of Purchase Money Obligations for property acquired,
constructed or improved in the ordinary course of business and any
refinancings thereof, which taken together in the aggregate do not exceed
$5.0 million at any time outstanding;
(ix) commodity agreements entered into in the ordinary course of
business to protect against fluctuations in the prices of raw materials and
not for speculative purposes;
(x) Indebtedness incurred by the Company or any Restricted
Subsidiary constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business (but not issued to
support Indebtedness for money borrowed), including, without limitation,
letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims or self-insurance;
(xi) Guarantees by the Company of Indebtedness of a Restricted
Subsidiary permitted to be incurred under this Indenture;
(xii) Indebtedness of the Company or any Restricted Subsidiary
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, in each case incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary,
other guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided that the maximum liability in respect
of such Indebtedness shall not exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition; and
(xiii) Junior PIK Indebtedness of the Company in an aggregate
amount not to exceed at any time $25.0 million.
(c) For purposes of determining any particular amount of Indebtedness
under this Section 4.10:
33
(i) in the event that an item of Indebtedness meets the criteria
of more than one of the categories of Permitted Indebtedness described in
clauses (i) through (xii) of Section 4.10(b) or is entitled to be incurred
pursuant to Section 4.10(a), the Company will, in its sole discretion,
classify that item of Indebtedness on the date of incurrence in any manner
that complies with this Section 4.10, and
(ii) guarantees, Liens or obligations with respect to letters of
credit supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included.
(d) Accrual of interest, accretion or amortization of original issue
discount, the payment of interest on Indebtedness in the term of additional
indebtedness with the same terms and the payment of dividends in Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of additional Indebtedness or an issuance
of Disqualified Stock for purposes of this Section 4.10.
(e) Indebtedness of any Person which is outstanding at the time such
Person becomes a Restricted Subsidiary or is merged with or into or consolidated
with the Company or a Restricted Subsidiary shall be deemed to have been
incurred at the time such Person becomes a Restricted Subsidiary or is merged
with or into or consolidated with the Company or a Restricted Subsidiary, and
Indebtedness which is assumed at the time of the acquisition of any asset shall
be deemed to have been incurred at the time of such acquisition.
SECTION 4.11 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment, unless at
the time of and immediately after giving effect to the proposed Restricted
Payment (with the value of any such Restricted Payment, if other than cash, to
be determined reasonably and in good faith by the Board of Directors of the
Company):
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company could incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to Section
4.10(a); and
(iii) the aggregate amount of all Restricted Payments made after
the Original Issue Date shall not exceed the sum of:
(A) an amount equal to 50% of the Company's aggregate
cumulative Consolidated Net Income accrued on a cumulative basis
during the period (treated as one accounting period) beginning on the
Original Issue Date and ending on the date of such proposed Restricted
Payment (or, if such aggregate cumulative Consolidated Net Income for
such period shall be a deficit, minus 100% of such deficit); plus
34
(B) the aggregate amount of all net cash proceeds received
since the Original Issue Date by the Company from the issuance and
sale (other than to a Restricted Subsidiary) of, or equity
contribution with respect to, Capital Stock (other than Disqualified
Stock) and the principal amount of Indebtedness of the Company or any
Restricted Subsidiary that has been converted into or exchanged for
Capital Stock (other than Disqualified Stock), in any such case to the
extent that such proceeds are not used (x) to redeem, repurchase,
retire or otherwise acquire Capital Stock or any Indebtedness of the
Company or any Restricted Subsidiary pursuant to clause (ii) of the
next paragraph or (y) to make any Restricted Investment pursuant to
clause (iv) of the next paragraph; plus
(C) the amount of the net reduction in Investments in
Unrestricted Subsidiaries resulting from (x) the payment of cash
dividends or the repayment in cash of the principal of loans or the
cash return on any Investment, in each case to the extent received by
the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, (y) the release or extinguishment of any guarantee of
Indebtedness of any Unrestricted Subsidiary, and (z) the redesignation
of Unrestricted Subsidiaries as Restricted Subsidiaries (valued as
provided in the definition of "Investment"), except, in each case, to
the extent that such payment or proceeds are included in the
calculation of Consolidated Net Income, such aggregate amount of the
net reduction in Investments not to exceed in the case of any
Unrestricted Subsidiary the amount of Restricted Investments
previously made by the Company or any Restricted Subsidiary in such
Unrestricted Subsidiary, which amount was included in the calculation
of the amount of Restricted Payments; plus
(D) to the extent that any Restricted Investment that was
made after the Original Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the amount of cash proceeds received
with respect to such Restricted Investment, except, in each case, to
the extent that such payment or proceeds are included in the
calculation of Consolidated Net Income, net of taxes and the cost of
disposition, which amount may not exceed the amount of Restricted
Investments made after the Original Issue Date.
(b) Section 4.11(a) shall not prohibit the following actions
(collectively, "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such declaration date such payment would have
been permitted under this Indenture (which payment shall be deemed to have
been paid on such date of declaration for purposes of Section
4.11(a)(iii));
(ii) the redemption, repurchase, retirement or other acquisition
of any Capital Stock or any Subordinated Indebtedness of the Company or any
Restricted Subsidiary in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Restricted Subsidiary) of,
or equity contribution with respect to, Capital Stock of the Company (other
than any Disqualified Stock);
35
(iii) any purchase or defeasance of Subordinated Indebtedness to
the extent (A) made with permitted Refinancing Indebtedness or (B) required
by the other agreement or instrument pursuant to which such Subordinated
Indebtedness was issued upon a change of control or other asset sale (as
defined therein), but only if the Company (x) in the case of such a change
of control, has complied with its obligations under Section 4.15 or (y) in
the case of such an asset sale, has applied the Net Proceeds from such
asset sale in accordance with Section 4.16;
(iv) any Restricted Investment the sole consideration for which
consists of, or is made with the proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary) of, or equity contribution
with respect to, Capital Stock of the Company (other than any Disqualified
Stock);
(v) loans or advances to employees of the Company or any of its
Subsidiaries which loans or advances exist on the Original Issue Date, and
other loans or advances to employees of the Company or any Subsidiary to
pay reasonable relocation expenses;
(vi) Restricted Investments in an amount such that the sum of the
aggregate amount of Restricted Investments made pursuant to this clause
(vi) after the Original Issue Date does not exceed $2.0 million at any one
time outstanding; and
(vii) the payment of any dividend on, or redemption of any or all
of, the Company's redeemable 9.8% cumulative preferred stock, par value,
$0.01 per share, Series D, outstanding on the Original Issue Date.
provided, however, that in the case of clauses (iii), (iv), (vi) and (vii) of
this Section 4.11(b), no Default or Event of Default shall have occurred and be
continuing.
(c) For purposes of Section 4.11(a)(iii), the Permitted Payments
referred to in clauses (i), (vi) and (vii) of Section 4.11(b) shall be included
in the aggregate amount of Restricted Payments made since the Original Issue
Date, and any other Permitted Payments described above shall be excluded.
(d) Not later than thirty (30) days after the end of any fiscal
quarter of the Company during which any Restricted Payment or Restricted
Investment has been made, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment or Restricted Investment
complies with this Indenture and setting forth in reasonable detail the basis
upon which the required calculations were computed, which calculations may be
based upon the Company's latest available internal quarterly financial
statements.
SECTION 4.12 Limitation on 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
securing Indebtedness (other than Permitted Liens) on any asset now owned or
hereafter acquired, or any income or profits therefrom, or assign or convey any
right to receive income therefrom to secure any such Indebtedness, unless (i) if
such Lien secures Indebtedness that is pari passu with the Notes, then
36
the Notes are secured on an equal and ratable basis with the obligations so
secured until such time as such obligation is no longer secured by a Lien or
(ii) if such Lien secures Indebtedness that is subordinated to the Notes, any
such Lien shall be subordinated to a Lien granted to the Holders of the Notes in
the same collateral as that securing such Lien to the same extent as such
subordinated Indebtedness is subordinated to the Notes.
SECTION 4.13 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause to become effective any
consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Capital Stock 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,
(ii) make loans or advances to, or issue guarantees for the benefit of, the
Company or any other Restricted Subsidiary or (iii) transfer any of its
properties or assets to the Company or any other Restricted Subsidiary, except
for such encumbrances or restrictions existing under or by reason of:
(a) any New Credit Facility;
(b) applicable law;
(c) any instrument governing Indebtedness or Capital Stock of an
Acquired Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition); provided, however, that no such encumbrance or restriction is
applicable to any Person, or the properties or assets of any Person, other than
the Acquired Person;
(d) customary non-assignment, subletting or net worth provisions in
leases or other agreements entered into the ordinary course of business and
consistent with past practices;
(e) Purchase Money Indebtedness for property acquired in the ordinary
course of business that impose restrictions only on the property so acquired;
(f) an agreement for the sale or disposition of assets or the Capital
Stock of a Restricted Subsidiary; provided, however, that such restriction or
encumbrance is only applicable to such Restricted Subsidiary or assets, as
applicable, and such sale or disposition otherwise is permitted by Section 4.16;
provided, further, however, that such restriction or encumbrance shall be
effective only for a period from the execution and delivery of such agreement
through a termination date not later than 180 days after such execution and
delivery;
(g) this Indenture, the Notes and the Note Guarantees;
(h) Indebtedness (including Refinancing Indebtedness) permitted to be
incurred subsequent to the Issue Date pursuant to Section 4.10; provided,
however, that any
37
such restrictions are ordinary and customary with respect to the type of
Indebtedness being incurred;
(i) encumbrances and restrictions imposed by Liens incurred in
accordance with Section 4.12;
(j) customary provisions in joint venture agreements and other similar
agreements; and
(k) encumbrances and restrictions imposed by amendments, restatements,
renewals, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (a) through (j) above; provided that such
encumbrances and restrictions are, in the good faith judgment of the Company's
Board of Directors, no more restrictive, in any material respect, than those
contained in such contracts, instruments or obligations immediately prior to
such amendment, restatement, renewal, replacement or refinancing.
SECTION 4.14 Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, suffer to exist, renew or
extend any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate of the Company unless (i) such transaction or
series of transactions is on terms that are no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could reasonably
be obtainable at such time in a comparable transaction in arm's-length dealings
with an unrelated third party, and (ii) the Company delivers to the Trustee (A)
with respect to any transaction or series of transactions involving aggregate
payments in excess of $500,000, an Officers' Certificate certifying that such
transaction or series of related transactions complies with clause (i) above and
(B) with respect to any transaction or series of transactions involving
aggregate payments in excess of $2.0 million, an Officers' Certificate
certifying that such transaction or series of related transactions has been
approved by a majority of the members of the Board of Directors of the Company
(and approved by a majority of the Independent Directors or, in the event there
is only one Independent Director, by such Independent Director), and (iii) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $5.0 million, an opinion as to the fairness to the Company
from a financial point of view issued by an investment banking firm of national
standing.
(b) Section 4.14(a) will not apply to (i) employment agreements or
compensation or employee benefit arrangements with any officer, director or
employee of the Company or any of its Restricted Subsidiaries entered into in
the ordinary course of business (including customary benefits thereunder and
including reimbursement or advancement of out-of-pocket expenses, and director's
and officer's liability insurance); (ii) the expense sharing arrangement between
the Company and Xxxxxxxx Capital Corporation regarding the expenses incurred
with respect to the Company's Cleveland, Ohio headquarters; (iii) any
transaction entered into by or among the Company or one of its Restricted
Subsidiaries with one or more Restricted Subsidiaries of the Company; (iv) any
transaction permitted by Section 4.11(b); (v) transactions permitted by, and
complying with, Article Five; and (vi) transactions with suppliers or other
purchases or sales of goods or services, in each case in the ordinary course of
38
business (including, without limitation, pursuant to joint venture agreements)
and otherwise in compliance with the terms of this Indenture which, in the
reasonable determination of the Board of Directors of the Company, are on terms
no less favorable to the Company or its Restricted Subsidiaries than those that
could reasonably have been obtained at such time from an unaffiliated party.
SECTION 4.15 Change of Control.
(a) In the event of a Change of Control, each Holder of the Notes
shall have the right, unless the Company has given a notice of redemption,
subject to the terms and conditions of this Indenture, to require the Company to
offer to purchase all or any portion (equal to $1,000, or, if lesser
denominations have been issued, such lesser denominations, or an integral
multiple thereof) of such Holder's Notes (and, if the Change of Control Purchase
Date occurs during the period following the immediately preceding Interest
Payment Date to and including the next PIK Interest Payment Date, any Additional
PIK Notes that would be issuable on such PIK Interest Payment Date pursuant to
Section 2.3 hereof) at a purchase price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase, in accordance with the terms set forth below (a "Change of Control
Offer").
In the event of any Change of Control, the Company shall not, and
shall not cause or permit any of the Restricted Subsidiaries to, purchase,
redeem or otherwise acquire or retire any Indebtedness of the Company ranking
junior or subordinate to the Notes pursuant to any analogous provisions relating
to such Indebtedness until after the 91st day after the Change of Control
Payment Date (as such date may be extended).
(b) On or before the 30th day following the occurrence of any Change
of Control, the Company shall mail, by first-class mail (with a copy to the
Trustee), to each Holder at such Holder's registered address a notice stating:
(i) that a Change of Control has occurred and that such holder
has the right to require the Company to purchase all or a portion (equal to
$1,000, or if lesser denominations have been issued, such lesser
denominations, or an integral multiple thereof) of such holder's Notes
(including any Additional PIK Notes that would be issuable on the next PIK
Interest Payment Date pursuant to Section 2.3 hereof) at a purchase price
in cash equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any, to the date of purchase (the "Change
of Control Purchase Date"), which shall be a Business Day, specified in
such notice, that is not earlier than 30 days or later than 60 days from
the date such notice is mailed; (ii) the amount of accrued and unpaid
interest, if any, as of the Change of Control Purchase Date (including any
amounts that would be payable in respect of any Additional PIK Notes that
would be issuable on the next PIK Interest Payment Date pursuant to Section
2.3 hereof); (iii) that any Note not tendered will continue to accrue
interest; (iv) that, unless the Company defaults in the payment of the
purchase price for the Notes payable pursuant to the Change of Control
Offer, any Notes accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest on the Change of Control Purchase Date
(excluding the interest payable under Section 2.3 hereof on any Additional
PIK Notes that would be issuable on the next PIK Interest Payment Date);
39
(v) that Holders electing to have a Note purchased pursuant to a Change of
Control Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the second Business Day prior to the Change of
Control Purchase Date; (vi) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than the second Business
Day prior to the Change of Control Purchase Date, a facsimile transmission
or letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; (vii) that Holders
whose Notes are purchased only in part will be issued new Notes in a
principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall
be in an original principal amount of $1,000 or integral multiples thereof
(or if the Notes purchased were issued in lesser denominations, such lesser
denomination); (viii) the circumstances and relevant facts regarding such
Change of Control; and (ix) such other information as may be required by
applicable laws and regulations.
(c) On the Change of Control Purchase Date, the Company will (i)
accept for payment all Notes or portions thereof tendered pursuant to the Change
of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
Sufficient to pay the aggregate purchase price of all Notes or portions thereof
accepted for payment, (iii) deposit with the Paying Agent an amount in cash
sufficient to pay the aggregate purchase price of any Additional PIK Notes that
would be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof, and (iv) deliver or cause to be delivered to the Trustee all Notes
tendered pursuant to the Change of Control Offer. The Paying Agent shall
promptly mail to each holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes plus accrued and unpaid
interest, if any, thereon, and the Trustee shall promptly authenticate and mail
to each holder of Notes accepted for payment in part a new Note equal in
principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
holder of such Note. On and after a Change of Control Purchase Date, interest
will cease to accrue on the Notes (excluding any Additional PIK Notes that would
be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof) or portions thereof accepted for payment, unless the Company defaults in
the payment of the purchase price therefor. The Company will publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Purchase Date.
(d) The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act, and all other applicable securities laws and regulations in connection with
any Change of Control Offer and will be deemed not to be in violation of any of
the covenants under this Indenture to the extent such compliance is in conflict
with such covenants.
SECTION 4.16 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may
40
be, receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value (as evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) of the assets or
other property sold or disposed of in the Asset Sale and (ii) at least 75% of
such consideration consists of either cash or Cash Equivalents; provided,
however, that for purposes of this Section 4.16, "cash" shall include (x) the
amount of any Indebtedness (other than any Indebtedness that is by its terms
subordinated to the Notes) of the Company or such Restricted Subsidiary as shown
on the Company's or such Restricted Subsidiary's most recent balance sheet or in
the notes thereto that is assumed by the transferee of any such assets or other
property in such Asset Sale (and excluding any liabilities that are incurred in
connection with or in anticipation of such Asset Sale), but only to the extent
that such assumption is effected on a basis such that there is no further
recourse to the Company or any of the Restricted Subsidiaries with respect to
such liabilities and (y) any notes, obligations or securities received by the
Company or such Restricted Subsidiary from such transferee that are converted
within 60 days by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received).
(b) Within 180 days after any Asset Sale, the Company may elect to
apply the Net Proceeds from such Asset Sale to (a) permanently reduce any Senior
Debt of the Company and/or (b) make an investment in, or acquire assets and
properties that will be used in, the business of the Company and the Restricted
Subsidiaries existing on the Issue Date or in businesses reasonably related
thereto. Pending the final application of any such Net Proceeds, the Company or
any Restricted Subsidiary may temporarily reduce Indebtedness of the Company
under any New Credit Facility or temporarily invest such Net Proceeds in any
Investments described under clauses (i) through (iii) of the definition of
Permitted Investments. Any Net Proceeds from an Asset Sale not applied or
invested as provided in the first sentence of this Section 4.16(b) within 180
days of such Asset Sale will be deemed to constitute "Excess Proceeds."
(c) Each date that the aggregate amount of Excess Proceeds in respect
of which an Asset Sale Offer (as defined below) has not been made exceeds $5.0
million shall be deemed an "Asset Sale Offer Trigger Date." As soon as
practicable, but in no event later than 20 business days after each Asset Sale
Offer Trigger Date, the Company shall commence an offer (an "Asset Sale Offer")
to purchase the maximum principal amount of Notes (and, if the Asset Sale Offer
Purchase Date occurs during the period following the immediately preceding
Interest Payment Date to and including the next PIK Interest Payment Date, any
Additional PIK Notes that would be issuable on such PIK Interest Payment Date
pursuant to Section 2.3 hereof) that may be purchased out of the Excess
Proceeds. Any Notes to be purchased pursuant to an Asset Sale Offer shall be
purchased pro rata based on the aggregate principal amount of Notes outstanding,
and all Notes shall be purchased at an offer price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest, if any,
to the date of purchase. To the extent that any Excess Proceeds remain after
completion of an Asset Sale Offer, the Company may use the remaining amount to
pay Indebtedness for money borrowed (other than Junior PIK Indebtedness) and, if
any Excess Proceeds remain after the payment in full of such Indebtedness, for
general corporate purposes otherwise permitted by this Indenture. In the event
that the Company is prohibited under the terms of any agreement governing
outstanding Senior Debt of the Company from repurchasing Notes with Excess
Proceeds pursuant to an Asset Sale Offer as set forth in the first sentence of
this Section 4.16(c), the
41
Company shall promptly use all Excess Proceeds to permanently reduce such
outstanding Senior Debt of the Company. Upon the consummation of any Asset Sale
Offer, the amount of Excess Proceeds shall be deemed to be reset to zero.
(d) Notice of an Asset Sale Offer shall be mailed, by first-class mail
(with a copy to the Trustee), by the Company not later than the 20th business
day after the related Asset Sale Offer Trigger Date to each holder of Notes at
such holder's registered address, stating: (i) that an Asset Sale Offer Trigger
Date has occurred and that the Company is offering to purchase the maximum
principal amount of Notes (including any Additional PIK Notes that would be
issuable on the next PIK Interest Payment Date pursuant to Section 2.3 hereof)
that may be purchased out of the Excess Proceeds (to the extent provided in the
immediately preceding paragraph), at an offer price in cash in an amount equal
to 100% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of the purchase (the "Asset Sale Offer Purchase Date"), which
shall be a business day, specified in such notice, that is not earlier than 30
days or later than 60 days from the date such notice is mailed, (ii) the amount
of accrued and unpaid interest, if any, on the Notes (including any amounts that
would be payable in respect of any Additional PIK Notes that would be issuable
on the next PIK Interest Payment Date pursuant to Section 2.3 hereof) as of the
Asset Sale Offer Purchase Date, (iii) that any Note not tendered will continue
to accrue interest, (iv) that, unless the Company defaults in the payment of the
purchase price for the Notes payable pursuant to the Asset Sale Offer, any Notes
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest after the Asset Sale Offer Purchase Date (excluding any Additional PIK
Notes that would be issuable on the next PIK Interest Payment Date pursuant to
Section 2.3 hereof), (v) that Holders electing to have a Note purchased pursuant
to a Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day prior to the Asset Sale Offer
Purchase Date, (vi) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the second Business Day prior to the
Asset Sale Offer Purchase Date, a facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Notes the Holder delivered
for purchase and a statement that such Holder is withdrawing his election to
have such Note purchased, (vii) that Holders whose Notes are purchased only in
part will be issued new Notes in a principal amount equal to the unpurchased
portion of the Notes surrendered; provided, however, that each Note purchased
and each new Note issued shall be in an original principal amount of $1,000 or
integral multiples thereof (or if the Notes purchased were issued in lesser
denominations, such lesser denomination), and (viii) such other information as
may be required by applicable laws and regulations.
(e) On the Asset Sale Offer Purchase Date, the Company will (i) accept
for payment the maximum principal amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer that can be purchased out of Excess Proceeds
from such Asset Sale that are to be applied to an Asset Sale Offer, (ii) deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the aggregate purchase
price of all Notes or portions thereof accepted for payment, (iii) deposit with
the Paying Agent an amount in cash sufficient to pay the aggregate purchase
price of any Additional PIK Notes that would be issuable on the next PIK
Interest Payment Date pursuant to Section 2.3 hereof, and (iv) deliver or cause
to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale
Offer. If less than all Notes tendered
42
pursuant to the Asset Sale Offer are accepted for payment by the Company for any
reason consistent with this Indenture, selection of the Notes to be purchased by
the Company shall be 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 or by lot; provided, however, that
Notes accepted for payment in part shall only be purchased in integral multiples
of $1,000, and provided further, that if all of a Holder's Notes are to be
purchased, an amount shall be retained by the Paying Agent to purchase any
Additional PIK Notes that would be issuable to the Holder on the next PIK
Interest Payment Date pursuant to Section 2.3 hereof. The Paying Agent shall
promptly mail to each holder of Notes or portions thereof accepted for payment
an amount equal to the purchase price for such Notes plus accrued and unpaid
interest, if any, thereon, and the Trustee shall promptly authenticate and mail
to such holder of Notes accepted for payment in part a new Note equal in
principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
holder of such Note. On and after an Asset Sale Offer Purchase Date, interest
will cease to accrue on the Notes or portions thereof accepted for payment
(excluding the interest payable under Section 2.3 on any Additional PIK Notes
that would be issuable on the next PIK Interest Payment Date), unless the
Company defaults in the payment of the purchase price therefor. The Company will
publicly announce the results of the Asset Sale Offer on or as soon as
practicable after the Asset Sale Offer Purchase Date.
(f) This Section 4.16 will not apply to a transaction consummated in
compliance with Article Five.
(g) The Company will comply with the applicable tender offer rules,
including the requirements of Section 14(e) and Rule 14e-1 under the Exchange
Act, and all other applicable securities laws and regulations in connection with
any Asset Sale Offer and will be deemed not to be in violation of any of the
covenants under this Indenture to the extent such compliance is in conflict with
such covenants.
SECTION 4.17 Limitation on Designation of Unrestricted Subsidiaries.
(a) The Company shall not designate any Subsidiary of the Company
(other than a newly created Subsidiary in which no Investment has previously
been made) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") unless:
(i) no Default shall have occurred and be continuing at the time
of or after giving effect to such Designation;
(ii) immediately after giving effect to such Designation, the
Company would be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under Section 4.10(a); and
(iii) the Company would not be prohibited under this Indenture
from making an Investment at the time of Designation in an amount (the
"Designation Amount") equal to the greater of (x) the book value of such
Restricted Subsidiary on such date and (y) the Fair Market Value of such
Restricted Subsidiary on such date.
43
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to for all
purposes of this Indenture in an amount equal to the Designation Amount.
(b) The Company shall not designate an Unrestricted Subsidiary as a
Restricted Subsidiary (a "Redesignation"), unless:
(i) no Default shall have occurred and be continuing at the time
of and after giving effect to such Redesignation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Redesignation shall be deemed to
have been incurred at such time and shall have been permitted to be
incurred for all purposes of this Indenture.
An Unrestricted Subsidiary shall be deemed to be redesignated as a Restricted
Subsidiary at any time if (a) the Company or any other Restricted Subsidiary (i)
provides credit support for, or a guarantee of, any Indebtedness of such
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness) or (ii) is directly or indirectly liable for any
Indebtedness of such Unrestricted Subsidiary, (b) a default with respect to any
Indebtedness of such Unrestricted Subsidiary (including any right which the
holders thereof may have to take enforcement action against it) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its final scheduled maturity, or (c) such Unrestricted Subsidiary incurs
indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any Restricted Subsidiary, except in the case of clause (i) to
the extent permitted under Section 4.11.
(c) All Designations and Redesignations shall be evidenced by Board
Resolutions delivered to the Trustee certifying compliance with the foregoing
provisions. Subsidiaries that are not designated by the Board of Directors as
Restricted or Unrestricted Subsidiaries will be deemed to be Restricted
Subsidiaries. The Designation of a Restricted Subsidiary as an Unrestricted
Subsidiary shall be deemed a Designation of all of the Subsidiaries of such
Unrestricted Subsidiary as Unrestricted Subsidiaries.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1 Merger, Consolidation and Sale of Assets.
(a) The Company shall not, in any single transaction or series of
related transactions, consolidate or merge with or into (whether or not the
Company is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
(determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, another Person, and the
Company will not
44
permit any Restricted Subsidiary to enter into any such transaction or series of
related transactions if such transaction or series of related transactions, in
the aggregate, would result in a sale, assignment, transfer, lease, conveyance
or other disposition of all or substantially all of the properties and assets of
the Company and the Restricted Subsidiaries, taken as a whole, to another
Person, unless (i) the Surviving Person is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the Surviving Person (if other than the Company or a Guarantor)
assumes all the obligations of the Company under the Notes and this Indenture
pursuant to a supplemental indenture or other written agreement, as the case may
be, in a form reasonably satisfactory to the Trustee; (iii) immediately after
such transaction, no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction or series
of related transactions, (a) in the case of a transaction involving the Company,
the Surviving Person shall have a Consolidated Net Worth equal to or greater
than the Consolidated Net Worth of the Company immediately prior to such
transaction or series of related transactions or (b) in the case of a
transaction involving a Restricted Subsidiary of the Company, the Surviving
Person shall have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of such Restricted Subsidiary immediately prior to such
transaction or series of related transactions; and (v) after giving pro forma
effect to such transaction, the Surviving Person would be permitted to incur at
least $1.00 of additional indebtedness (other than Permitted Indebtedness)
pursuant to Section 4.10(a). Notwithstanding clauses (iii), (iv) and (v) above,
any Restricted Subsidiary that is a Guarantor may consolidate with, merge into
or transfer all or part of its properties and assets to the Company or another
Restricted Subsidiary that is a Guarantor.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which the Company or a Guarantor is not the Surviving Person, such Surviving
Person shall succeed to, and be substituted for, and may exercise every right
and power of, the Company, and the Company shall be discharged from its
obligations under, this Indenture and the Notes.
(b) In connection with any such consolidation, merger, amalgamation,
transfer, lease or disposition, the Company or such Person shall have delivered
to the Trustee (i) an Officers' Certificate and an Opinion of Counsel, each in
form and substance reasonably satisfactory to the Trustee, stating that such
consolidation, amalgamation, merger, sale, assignment, conveyance, transfer,
lease or disposition and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Indenture
and that all conditions precedent therein provided for relating to such
transaction have been complied with, and (ii) if a supplemental indenture is
required in connection with such transaction, an Opinion of Counsel, in form and
substance reasonably satisfactory to the Trustee, that such supplemental
indenture constitutes the legal, valid, binding and enforceable obligation of
the Surviving Entity.
(c) For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Subsidiaries, the
Capital Stock of which constitutes all or substantially all of the properties
and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
45
SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation, amalgamation or merger, or any sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company in accordance with Section 5.1, the
Surviving Entity or the Transaction Survivor, as the case may be, shall succeed
to, and be substituted for, and may exercise every rich and power of the Company
under this Indenture, with the same effect as if such successor had been named
as the Company in this Indenture; and thereafter, except in the case of a lease,
the Company shall be discharged from all obligations and covenants under this
Indenture and the Notes.
ARTICLE VI
DEFAULT AND REMEDIES
SECTION 6.1 Events of Default.
"Events of Default", wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Company defaults in the payment when due of interest
(including the issuance of any Additional PIK Notes) on any Note and, in
the case of cash interest, such default continues for a period of 30 days;
(ii) the Company defaults in the payment when due of principal on
any Note, whether upon maturity, acceleration, optional or mandatory
redemption, required repurchase or otherwise;
(iii) the Company's or any Guarantor's failure to perform or
comply with any covenant, agreement or warranty in this Indenture (other
than the defaults specified in clauses (i) and (ii) above) which failure
continues for 60 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% in aggregate principal amount of the then outstanding Notes;
(iv) the occurrence of one or more defaults under any agreements,
indentures or instruments under which the Company or any Restricted
Subsidiary then has outstanding Indebtedness in excess of $5.0 million in
the aggregate and, if not already matured at its final maturity in
accordance with its terms, such Indebtedness shall have been accelerated
and such acceleration is not rescinded, annulled or cured within 10 days
thereafter;
(v) one or more judgments, orders or decrees for the payment of
money in excess of $5.0 million, either individually or in the aggregate,
shall be entered against the Company or any Restricted Subsidiary or any of
their respective properties
46
and which judgments, orders or decrees are not paid, discharged, bonded or
stayed or stayed pending appeal for a period of 60 days after their entry;
or
(vi) the Company or any Significant Subsidiary shall (A) commence
a voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consent to the entry of a judgment, decree or order for relief
against it in an involuntary case or proceeding under any Bankruptcy Law,
(C) consent to the appointment of a Custodian of it or for substantially
all of its property, (D) consent to or acquiesce in the institution of a
bankruptcy or an insolvency proceeding against it, (E) make a general
assignment for the benefit of its creditors, (F) admit in writing its
inability to pay its debts as they become due, or (G) take any corporate
action to authorize or effect any of the foregoing; or
(vii) a court of competent jurisdiction shall enter a judgment,
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any Bankruptcy Law
which shall (A) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of the
Company or any Significant Subsidiary, (B) appoint a Custodian of the
Company or any Significant Subsidiary or for substantially all of its
property or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(viii) any Note Guarantee ceases to be in full force and effect
(except as contemplated by the terms of this Indenture) or any Guarantor
denies or disaffirms its obligations under this Indenture or its Note
Guarantee.
The Company shall provide an Officers' Certificate to the Trustee within
five days of the occurrence of any Default or Event of Default (provided,
however, that pursuant to Section 4.6 hereof the Company shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.
SECTION 6.2 Acceleration.
(a) If any Event of Default (other than as specified in clause (vi) or
(vii) of Section 6.1 with respect to the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may, and the Trustee at the request of such Holders shall,
declare all the Notes to be due and payable immediately by notice in writing to
the Company, and to the Company and the Trustee if by the Holders, specifying
the respective Event of Default and that such notice is a "notice of
acceleration," and the Notes shall become immediately due and payable. Following
the delivery of such a notice of acceleration, any interest that would have
otherwise been payable through the issuance of Additional PIK Notes shall be
payable in cash. Notwithstanding the foregoing, in the case of an Event of
Default arising from the events specified in clause (vi) or (vii) of Section 6.1
with respect to the Company, the principal of, premium, if any, and any accrued
interest on all outstanding Notes shall ipso facto become immediately due and
payable without further action or notice.
47
(b) Any time after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in principal amount of the Notes outstanding,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (i) the Company has paid or deposited with
the Trustee a sum sufficient to pay (A) all sums paid or advanced by the Trustee
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (B) all overdue interest (including any
interest accrued subsequent to an Event of Default specified in clause (vi) or
(vii) of Section 6.1 hereof) on all Notes, (C) the principal of and premium, if
any, on any Notes which have become due otherwise than by such declaration or
occurrence of acceleration and interest thereon at the rate borne by the Notes,
and (D) to the extent that payment of such interest is lawful, interest upon
overdue interest at the Default Rate; and (ii) all Events of Default, other than
the non-payment of principal of Notes which have become due solely by such
declaration or occurrence of acceleration, have been cured or waived; and (iii)
the rescission would not conflict with any judgment, order or decree of any
court of competent jurisdiction.
(c) 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 this Indenture except (i) a continuing Default or Event of
Default in the payment of the principal of, or premium, if any, or interest on,
the Notes (which may be waived only with the consent of each Holder of Notes
affected), or (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 affected Note outstanding.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of the
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 6.4 Waiver of Past Defaults.
Subject to Sections 2.10, 6.2, 6.7 and 9.2, prior to the declaration of
acceleration of the Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes by written notice to the Trustee may on behalf
of all of the Holders waive any past Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Note as specified in clauses (i) and (ii) of Section 6.1 or a Default in respect
of any term or provision of this Indenture that may not be modified or amended
without the consent of each Holder affected as provided in Section 9.2. In case
of any such waiver, the Company, the Trustee and the Holders shall be restored
to their former positions and rights
48
hereunder and under the Notes, respectively. This paragraph of this Section 6.4
shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.
SECTION 6.5 Control by Majority.
Subject to Section 2.9, the Holders of a majority in principal amount of
the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it, including, without limitation, any remedies provided for
in Section 6.3; provided, however, that the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction.
Subject to Section 7.1, however, the Trustee may refuse to follow any direction
that the Trustee reasonably believes conflicts with any law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of another
Holder or that exposes the Trustee to personal liability. This Section 6.5 shall
be in lieu of Section 316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 6.6 Limitation on Suits.
No Holder shall have any right to institute any proceeding, judicial or
otherwise with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee;
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes.
49
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture or of the Notes, the
right of any Holder to receive payment of the principal of and interest
(including interest in the form of Additional PIK Notes) on a Note, on or after
the respective due dates expressed in such Note and this Indenture, or to bring
suit for the enforcement of any such payment or issuance on or after such
respective dates, shall not be impaired or affected without the express prior
written consent of such Holder.
SECTION 6.8 Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified in
clause (i) or (ii) of Section 6.1 of this Indenture occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or any other obligor on the Notes for the whole amount
of the principal and accrued interest remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest as set forth in Section 4.1 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 6.9 Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under Section 7.7. The
Company's payment obligations under this Section 6.9 shall be secured in
accordance with the provisions of Section 7.7 hereunder. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money in the following order:
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First: to the Trustee for amounts due under Section 7.7, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel;
Second: if the Holders are forced to proceed against the Company directly
without the Trustee, to Holders for their collection costs;
Third: subject to Article Ten, to Holders for amounts due and unpaid on the
Notes for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal and
interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, 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 Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.6, or a suit by a Holder or group of Holders of
more than 10% in principal amount of the outstanding Notes.
ARTICLE VII
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If a Default or 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
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of a Default or an Event of Default:
(i) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or obligations
shall be implied in this Indenture that are adverse to the Trustee; and
(ii) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions
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expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture. However, in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph(b) of
this Section 7.1;
(ii) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1 and
Section 7.2.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets of the Trustee except to the extent required by law.
SECTION 7.2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 11.4 and 11.5. 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.
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(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company's accountants and attorneys.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Delivery of reports, information and documents to the Trustee
under Section 4.9 hereof is for informational purposes only and the Trustee's
receipt of the foregoing shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
(i) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless a trust officer of the Trustee (i) has actual knowledge
of such Default or Event of Default or (ii) the Trustee has been notified in
writing by the Company or any Holder of Notes.
SECTION 7.3 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, any Subsidiary, or
their respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Notes, and it shall not be accountable for the Company's use of
the proceeds from the
53
Notes, and it shall not be responsible for any statement of the Company in this
Indenture or the Notes other than the Trustee's certificate of authentication.
SECTION 7.5 Notice of Default.
If a Default or an Event of Default occurs and is continuing and if it is
known to a Trust Officer, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Proceeds Purchase Date pursuant to an Asset
Sale Offer or a Default in compliance with Article Five hereof, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. The foregoing sentence of this Section 7.5 shall be in lieu of
the proviso to Section 315(b) of the TIA and such proviso to Section 315(b) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.
SECTION 7.6 Reports by Trustee to Holders.
Within 60 days after each May 15 of each year beginning with 2003, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).
A copy of each report at the time of its mailing to Holders shall be mailed
to the Company and filed with the Commission and each stock exchange, if any, on
which the Notes are listed.
The Company shall promptly notify the Trustee if the Notes become listed on
any stock exchange and the Trustee shall comply with TIA Section 313(d).
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation
for its services as has been agreed to in writing signed by the Company and
Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it in connection with the performance of its duties under this Indenture.
Such expenses shall include the reasonable fees and expenses of the Trustee's
agents and counsel.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
54
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided, however, that any
settlement of a claim shall be approved in writing by the Trustee.
Alternatively, the Trustee may at its option have separate counsel of its
own choosing and the Company shall pay the reasonable fees and expenses of such
counsel.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(vi) or (vii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 7.7 shall survive the resignation or removal
of the Trustee and the termination of this Indenture.
SECTION 7.8 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder of such event
and 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 Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all
55
property held by it as Trustee to the successor Trustee, subject to the lien
provided in Section 7.7, 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. A successor Trustee shall
mail notice of its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding any resignation or replacement of the Trustee pursuant to
this Section 7.8, the Company's obligations under Section 7.7 shall continue for
the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee; provided, however, that such
corporation shall be otherwise qualified and eligible under this Article Seven.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirement of
TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA Section
310(b); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities,
or certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. The provisions of TIA Section 310 shall apply to the Company,
as obligor of the Notes.
SECTION 7.11 Preferential Collection of Claims Against Company.
The Trustee shall comply with 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.
The provisions of TIA Section 311 shall apply to the Company, as obligor on the
Notes.
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ARTICLE VIII
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 8.1 Satisfaction and Discharge of Indenture.
(a) This Indenture shall be discharged and shall cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of Notes herein expressly provided for) as to all outstanding Notes and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when:
(i) either
(A) all Notes theretofore authenticated and delivered (other
than (x) Notes which have been lost, stolen or destroyed and which
have been replaced or paid as provided in Section 2.8 hereof and (y)
Notes for whose payment money has theretofore been deposited in trust
by the Company and thereafter repaid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Trustee for
cancellation (other than (x) Notes which have been lost, stolen or
destroyed and which have been replaced or paid as provided in Section
2.8 hereof and (y) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have
been called for redemption pursuant to the terms of this Indenture or
have otherwise become due and payable, and the Company, in each case,
has irrevocably deposited or caused to be deposited with the Trustee
in trust for the purpose U.S. Legal Tender sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Trustee for cancellation, for the principal of,
premium, if any, and interest to the date of such deposit or
redemption together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment or redemption
thereof, as the case may be, including in each such case, any amounts
required to redeem or purchase any Additional PIK Notes that would be
issuable on the next PIK Interest Payment Date pursuant to Section 2.3
hereof;
(ii) the Company and the Guarantors have paid or caused to be
paid all other sums payable hereunder by the Company and the Guarantors;
and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.7 hereof shall
survive and, if money
57
shall have been deposited with the Trustee pursuant to clause (a)(i)(B) of this
Section 8.1, the obligations of the Trustee under Sections 8.3 and 8.4 shall
survive.
SECTION 8.2 Defeasance or Covenant Defeasance.
(a) Subject to the satisfaction of the conditions in Section 8.2(c)
hereof, the Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have the obligations of the Company and the
Guarantors discharged with respect to the outstanding Notes ("defeasance"). Upon
such defeasance, the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Notes and the Note
Guarantees, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 hereof and the other Sections of and matters under this
Indenture referred to in clauses (i) and (ii) below, and to have satisfied all
its other obligations under such Notes and this Indenture, except for the
following, which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Notes to receive solely from the trust
fund described in Section 8.2(c) and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Notes when such
payments are due, (ii) the Company's obligations under Sections 2.3, 2.4, 2.6,
2.7, 2.8 and 4.2, the rights, powers, trusts, duties and immunities of the
Trustee hereunder, including, without limitation, the Trustee's rights under
Section 7.7, and (iv) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.2(a)
notwithstanding the prior exercise of its option under Section 8.2(b) with
respect to the Notes.
(b) Subject to the satisfaction of the conditions in Section 8.2(c)
hereof, the Company may, at its option by Board Resolution, at any time, elect
to effect covenant defeasance ("covenant defeasance"). On and after the date
such conditions are satisfied, (i) the Company shall be released from its
obligations under any covenant or provision contained in Sections 4.4, 4.5,
4.6(a), 4.7 and 4.9 through 4.19, (ii) clauses (iii) through (vi) of Section 6.1
hereof shall not apply, and (iii) the provisions of Articles Five, Ten and
Eleven shall not apply, and the Notes shall thereafter be deemed to be 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 and the provisions of Articles Five, Ten and Eleven, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the 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 Section or Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
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 clauses (iii)
through (vi) of Section 6.1 hereof, but, except as specified above, the
remainder of this Indenture shall be unaffected thereby.
(c) In order to effect defeasance or covenant defeasance, the
following conditions must be satisfied:
(i) the Company shall have irrevocably deposited with the Trustee
(or another trustee satisfying the requirements of Section 7.10 hereof who
agrees to comply with the provisions of this Article Eight applicable to
it), as trust funds in trust,
58
for the benefit of the Holders of such Notes, U.S. Legal Tender, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient (in the opinion of a nationally recognized firm of independent
public accountants or a nationally recognized investment banking firm, as
evidenced by a written report), without consideration of reinvestment of
interest of such U.S. Government Obligations, to pay the principal of,
premium, if any, and interest on the outstanding Notes (including on any
Additional PIK Notes that would be issuable on the next PIK Interest
Payment Date pursuant to Section 2.3 hereof but excluding any lost, stolen
or destroyed Notes which have been replaced or paid) to maturity or
redemption, as the case may be, and the Company shall have irrevocably
instructed the Trustee (or such other trustee) to apply such U.S. Legal
Tender or U.S. Government Obligations to said payments in respect of the
Notes;
(ii) the Company shall have delivered to the Trustee one or more
Opinions of Counsel in the United States (which counsel or counsels shall
be independent of the Company) to the effect that:
(A) the holders of the outstanding Notes will not recognize
income gain or loss for Federal income tax purposes as a result of
such defeasance or covenant defeasance, as the case may be, and will
be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance or covenant defeasance, as the case may be, had not
occurred (which opinion, in the case of defeasance, shall be based
upon a ruling of the Internal Revenue Service or a change in
applicable Federal income tax law occurring after the Issue Date);
(B) the trust funds will not be subject to any rights of
holders of Indebtedness of the Company (other than holders of the
Notes); and
(C) assuming no bankruptcy of the Company occurs between the
date of deposit and the 91st day following the deposit, after the 91st
day following the deposit the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(iii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit, at any time during the period
ending on the 91st day after the date of such deposit;
(iv) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument to which the Company is a party or by which it is
bound;
(v) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of defeating, hindering, delaying or defrauding any other creditors
of the Company or others;
59
(vi) no event or condition shall exist that would prevent the
Company from making payments of the principal of and interest on the Notes
on the date of such deposit or at any time during the period ending on the
91st day after the date of such deposit; and
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent (other than conditions requiring the passage of time)
to either defeasance or covenant defeasance, as the case may be, have been
complied with and that no violations under agreements governing any other
outstanding Indebtedness of the Company would result therefrom.
Opinions required to be delivered under this Section may have qualifications
customary for opinions of the type required.
SECTION 8.3 Application of Trust Money.
The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or U.S.
Government Obligations deposited with it pursuant to Section 8.1 or 8.2, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal of
and interest on the Notes. The Trustee shall be under no obligation to invest
said U.S. Legal Tender or U.S. Government Obligations except as it may agree in
writing with the Company.
The Company shall pay, and indemnify the Trustee against, any tax, fee or
other charge imposed on or assessed against the Legal Tender or U.S. Government
Obligations deposited pursuant to Section 8.1 or 8.2 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 outstanding Notes.
SECTION 8.4 Repayment to the Company.
Subject to Sections 8.1 and 8.2, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for one year; provided, however,
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.
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SECTION 8.5 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.1 or 8.2 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and the Guarantors' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 or 8.2, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.1 or 8.2, as the case may
be; provided, however, that if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.
SECTION 8.6 Acknowledgment of Discharge by Trustee.
After (i) the conditions of Section 8.1 or 8.2(a) have been satisfied, (ii)
the Company has paid or caused to be paid all other sums payable hereunder by
the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge or defeasance of this Indenture have been complied with, the Trustee
upon request shall acknowledge in writing the discharge of the Company's and the
Guarantors' obligations under this Indenture except for those surviving
obligations specified in Section 8.1 or 8.2, as the case may be.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 Without Consent of Holders and any Guarantor.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or the Note
Guarantees without notice to or consent of any Holder or any Guarantor:
(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Notes and this Indenture in the event
of any Disposition involving the Company in which the Company is not the
Surviving Person;
(iii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
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(iv) to comply with any requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional benefit
or rights to the Holders;
(vi) to make any other change that does not adversely affect the
rights of any Holder under this Indenture; or
(vii) to add Guarantees with respect to the Notes or to secure
the Notes, or to release any Note Guarantee that is permitted to be
released under this Indenture;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.
SECTION 9.2 With Consent of Holders.
(a) Subject to Section 6.7, the Company and the Guarantors, when
authorized by a Board Resolution, and the Trustee, together, with the written
consent of the Holder or Holders of not less than a majority in aggregate
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes), may amend or
supplement this Indenture, the Notes and the Note Guarantees without notice to
any other Holder. Subject to Section 6.2 and 6.7, the Holder or Holders of not
less than a majority in aggregate principal amount of the then outstanding Notes
may waive compliance by the Company with any provision of this Indenture or the
Notes without notice to any other Holder.
(b) Notwithstanding Section 9.2(a) hereof, no amendment, supplement or
waiver, including a waiver pursuant to Section 6.4, shall, without the prior
written consent of each Holder of each Note affected thereby:
(i) reduce the principal amount of the Notes whose holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Note, or alter or waive the provisions with respect to the redemption of
the Notes in a manner adverse to the holders of the Notes other than with
respect to a Change of Control Offer or an Asset Sale Offer and except to
the extent covered by Section 9.2(b)(vii) hereof;
(iii) reduce the rate of or change the time for payment of
interest (including interest in the form of Additional PIK Notes or cash in
respect thereof) on any Notes;
(iv) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on the Notes (except that
holders of at least a majority in aggregate principal amount of the then
outstanding Notes may (A) rescind
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an acceleration of the Notes that resulted from a non-payment default and
(B) waive the payment default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture relating
to waivers of (A) past Defaults or Events of Default or (B) the rights of
holders of Notes to receive payments of principal of, or premium, if any,
or interest on, the Notes; or
(vii) following the occurrence of a Change of Control, amend,
change or modify the Company's obligation to make and consummate a Change
of Control Offer in the event of a Change of Control or modify any of the
provisions or definitions with respect thereto in a manner adverse to the
holders of the Notes, or following the occurrence of an Asset Sale, amend,
change or modify the Company's obligation to make and consummate an Asset
Sale Offer or modify any of the provisions or definitions with respect
thereto in a manner adverse to the holders of the Notes.
(c) It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
(d) After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Compliance with TIA.
Every amendment, waiver or supplement of this Indenture or the Notes shall
comply with the TIA as then in effect; provided, however, that this Section 9.3
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.
SECTION 9.4 Payment for Consent.
Neither the Company nor any Affiliate of the Company shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to 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 to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
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SECTION 9.5 Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date on which the Trustee receives an
Officers' Certificate certifying that the Holders of the requisite principal
amount of Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes any change described in Section 9.2(b), in which
case, the amendment, supplement or waiver shall bind only each Holder of a Note
who has consented to it and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note; provided,
however, that any such waiver shall not impair or affect the right of any Holder
to receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
SECTION 9.6 Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms.
SECTION 9.7 Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided, however, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, in addition to the
documents required by Section 11.4, and shall be fully protected in relying
upon, an Opinion of Counsel and an Officers' Certificate each stating that the
execution of any amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or
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permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee or the Holders.
ARTICLE X
GUARANTEES
SECTION 10.1 Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally, guarantees of
a senior unsecured basis (such guarantee to be referred to herein as a "Note
Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns that: (i) the principal of,
premium, if any, and interest on the Notes will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise and interest on the overdue principal and interest on
any overdue interest, to the extent lawful, of the Notes and all other
Obligations of the Company to the Holders of the Notes or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Notes or of any such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at
stated maturity, by acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in Section 10.4. Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, and action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Note Guarantee will not be discharged except by complete performance
of the Obligations contained in the Notes, this Indenture and in this Note
Guarantee. Each Guarantor hereby further waives its obligation and right to
execute, and agrees to be bound by the terms of any, supplemental indenture
entered into by the Company and the Trustee, pursuant to Section 9.1. If any
Holder of the Notes or the Trustee is required by any court or otherwise to
return to the Company or any Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Holders of the Notes and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article VI for the purposes of this Note 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 acceleration of such Obligations as provided in Article VI, such
65
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Note Guarantee.
SECTION 10.2 Severability.
In case any provision of this Article X or any Note Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby.
SECTION 10.3 Successors and Assigns; Release of a Guarantor.
This Article X shall be binding upon the Guarantors and their successors
and assigns and shall enure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred upon
that party in this Indenture and in the Notes shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions of this Indenture.
If no Default exists or would exist under this Indenture, if all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor is sold or
disposed of (including by merger, consolidation, issuance or otherwise) by the
Company or any of the Restricted Subsidiaries to any person that is not an
Affiliate of the Company or any of the Restricted Subsidiaries if a transaction
constituting an Asset Sale (other than pursuant to a transaction subject to the
provisions of clause (a) or (b) of Section 5.1), and if the Net Proceeds from
such Asset Sale are used in accordance with Section 4.16, then such Guarantor
and each wholly-owned Restricted Subsidiary of such Guarantor that is also a
Guarantor (in the event of a sale or other disposition of all of the Capital
Stock of such Guarantor) or (b) the corporation or other entity acquiring such
assets (in the event of a sale or other disposition of all or substantially all
of the assets of such Guarantor) shall be released and discharged of its Note
Guarantee obligations.
The Trustee shall deliver an appropriate instrument evidencing such release
upon receipt of a request by the Company accompanied by an Officers' Certificate
of the Company and Opinion of Counsel certifying as to the compliance with this
Section 10.3. Any Guarantor not so released remains liable for the full amount
of principal of, premium and interest on the Securities and other Obligations as
provided in this Article X.
SECTION 10.4 Limitation of Guarantor's Liability.
Each Guarantor and by its acceptance hereof each Holder of Notes hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Note Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders of Notes and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under its Note
Guarantee shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the Obligations of such
66
other Guarantor under its Note Guarantee or pursuant to Section 10.5, result in
the obligations of such Guarantor under its Note Guarantee not constituting such
fraudulent transfer or conveyance.
SECTION 10.5 Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to its Note Guarantee. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (i) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
(other than liabilities of such Guarantor under Indebtedness subordinated to
such Guarantor's Note Guarantee)), but excluding liabilities under the Note
Guarantee, of such Guarantor at such date and (ii) the amount by which the
present fair salable value of the assets of such Guarantor at such date exceeds
the amount that will be required to pay the probable liability of such Guarantor
on its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under its Note Guarantee, if any), excluding debt in respect of the
Note Guarantee of such Guarantor, as they become absolute and matured.
SECTION 10.6 Waiver of Subrogation.
Until all Note Guarantee Obligations are paid in full, each Guarantor
hereby irrevocably waives any claims or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its Note
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any holder of Notes against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights. If any amount shall be paid to any Guarantor in violation of
the preceding sentence and the Notes shall not have been paid in full, such
amount shall have been deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and
shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
10.6 is knowingly made in contemplation of such benefits.
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SECTION 10.7 Execution of Note Guarantee.
To evidence its guarantee to the Holders of Notes set forth in this Article
X, each Guarantor hereby agrees to execute its Note Guarantee in substantially
the form included in the Notes, which shall be endorsed on each Note ordered to
be authenticated and delivered by the Trustee. Each Guarantor hereby agrees that
its Note Guarantee set forth in this Article X shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Note Guarantee. Each such Note Guarantee shall be signed on behalf of each
Guarantor by two Officers, or an Officer and an Assistant Secretary or one
Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Note Guarantee prior to the authentication of the
Notes on which it is endorsed, and the delivery of such Notes by the Trustee,
after the authentication thereof hereunder, shall constitute due delivery of
such Note Guarantee on behalf of such Guarantor. Such signatures upon the Note
Guarantee may be by manual or facsimile signature of such officers and may be
imprinted or otherwise reproduced on the Note Guarantee, and in case any such
officer who shall have signed the Note Guarantee shall cease to be such officer
before the Notes on which such Note Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed the Note Guarantee had not ceased to be such officer of
the Guarantor.
SECTION 10.8 Waiver of Stay, Extension or Usury Laws.
Each Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive each such Guarantor from performing its
Note Guarantee as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) such Guarantor hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 10.9 Additional Guarantors.
Concurrently with the creation or acquisition by the Company of any
Subsidiary (other than a Foreign Subsidiary and other than an Unrestricted
Subsidiary), the Company, such Subsidiary and the Trustee shall execute and
deliver a supplement to this Indenture providing that such Subsidiary will be a
Guarantor hereunder. Each such supplement shall be in a form reasonably
satisfactory to the Trustee.
SECTION 10.10 Modification.
No modification, amendment or waiver of any provision of this Article X,
nor the consent to any departure by the Guarantors therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Trustee, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on the Guarantors in any
case shall entitle the Guarantors to any other or further notice or demand in
the same, similar or other circumstances.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 TIA 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 required provision shall control; provided, however, that this Section 11.1
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.
SECTION 11.2 Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to the Company or any Guarantor:
Hawk Corporation
000 Xxxxxx Xxxxxx,
Xxxxx 00-0000
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attn: Chief Executive Officer
if to the Trustee:
HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Issuer Services
Each of the Company, the Guarantors the Trustee by written notice to the
other may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
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Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 11.3 Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with their Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
SECTION 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, such action is authorized or permitted by this Indenture and that all
such conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with.
SECTION 11.5 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 the Officers' Certificate
required by Section 4.6 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 has made such
examination or investigation as is reasonably necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
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SECTION 11.6 Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 11.7 Legal Holidays. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or at such place of payment are not required
to be open. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 11.8 Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF OHIO WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT
OF LAWS. Each of the parties hereto agrees to submit to the jurisdiction of the
courts of the State of Ohio in any action or proceeding arising out of or
relating to this Indenture.
SECTION 11.9 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of the subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 11.10 No Recourse Against Others.
A director, officer, employee, stockholder or incorporator, as such, of the
Company or of the Trustee shall not have any liability for any obligations of
the Company under the Notes, the Note Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes and the Note Guarantees.
SECTION 11.11 Successors.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their respective successors. All agreements of the Trustee in
this Indenture shall bind its successors.
SECTION 11.12 Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
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SECTION 11.13 Severability.
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
SECTION 11.14 Independence of Covenants.
All covenants and agreements in this Indenture and the Notes shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
HAWK CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
ALLEGHENY CLEARFIELD, INC.
By: /S/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
FRICTION PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MIM, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MOTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK PRECISION COMPONENTS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXX METAL STAMPINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
NET SHAPE TECHNOLOGIES LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
QUARTER MASTER INDUSTRIES, INC.
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
SINTERLOY CORPORATION
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
2
TEX RACING ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HSBC BANK USA, as Trustee
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
3
EXHIBIT A
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE OF THE
DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE.
HAWK CORPORATION
12% SENIOR NOTE DUE 2006
CUSIP No.:____________
No.___________ $________
HAWK CORPORATION, a Delaware corporation (the "Company", which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of __________ on December 1, 2006.
Interest Payment Dates: June 30 and December 31
PIK Interest Payment Dates: March 31 (or earlier under certain
circumstances) and August 14 (or earlier under certain circumstances)
Record Dates: June 15 and December 15
PIK Record Date: the date 15 days prior to the applicable PIK Interest
Payment Date
Reference is made to the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.
HAWK CORPORATION
By:_____________________________________
Name:
Title:
Attested to by:
___________________________________
Name:
Title:
Certificate of Authentication
This is one of the 12% Senior Notes due 2006 referred to in the within-mentioned
Indenture.
HSBC BANK USA, as Trustee
By: ____________________________________
Authorized Officer
Date of Authentication:_________________
(REVERSE OF SECURITY)
12% Senior Note due 2006
1. INTEREST. HAWK CORPORATION, a Delaware corporation (the "Company"),
promises to pay cash interest on the principal amount of this Note at the rate
per annum shown above. Cash interest on the Notes will accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from October [15], 2002. The Company will pay cash interest semi-annually in
arrears on each Interest Payment Date. Interest will be computed on the basis of
a 360-day year of twelve 30-day months and, in the case of a partial month, the
actual number of days elapsed.
Under certain circumstances set forth in the Indenture, the Company may be
required to pay additional interest on this Note to the holder of record on the
applicable PIK Record Date. Such additional interest shall be payable in the
form of an Additional PIK Note that is identical in all respects to this Note
and dated as of, and starts accruing interest on, the first day of the PIK
Accrual Period in which the applicable PIK Interest Payment Date occurs.
Notwithstanding the foregoing, if the Company is required to pay any such
additional interest in a denomination less than $1,000, then the Company, may,
at its option, pay such additional interest by making cash payments in the
amount of any Additional PIK Note that would be required pursuant to the
Indenture.
The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the Default Rate.
2. METHOD OF PAYMENT. The Company shall pay cash interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address. Any Additional PIK
Notes shall be issued and delivered to each Holder at the Company's expense on
or as soon as practicable (and in any event within 10 days) after the applicable
PIK Interest Payment Date.
3. PAYING AGENT AND REGISTRAR. Initially, HSBC Bank USA (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.
4. INDENTURE. The Company issued the Notes under an indenture, dated as of
October [15], 2002 (the "Indenture"), between the Company, the Guarantors named
therein (the "Guarantors") and the Trustee. This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its 12% Senior
Notes due 2006. The Notes are limited in aggregate principal amount to
$100,000,000. All of the Notes need not be issued at the same time and, unless
otherwise provided, a previous issuance of Notes may be reopened, without notice
to or
the consent of any Holder, for issuance of Additional Notes of the same tranche,
and the Additional Notes will be consolidated and form a single tranche with the
previously issued Notes. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code Section Sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured senior obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time in accordance with its
terms.
5. NOTE GUARANTEES. To guarantee the due and punctual payment of the
principal and interest, if any, on the Notes and all other amounts payable by
the Company under the Indenture and the Notes when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed such obligations on a senior unsecured
basis pursuant to the terms of the Indenture. The Note Guarantees are general
unsecured senior obligations of the Company.
6. OPTIONAL REDEMPTION. The Notes (including any Additional PIK Notes that
would be issuable on the next PIK Interest Payment Date pursuant to Section 2.3
of the Indenture) are redeemable, at the Company's option, in whole or in part,
at any time on and after December 1, 2002 at the redemption prices (expressed as
percentages of the principal amount of the Notes) if redeemed during the
twelve-month period commencing on December 31 of the year set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the Redemption
Date:
YEAR PERCENTAGE
---- ----------
2002 105.000%
2003 102.500%
2004 and thereafter 100.000%
The Notes are not entitled to the benefit of any sinking fund.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption of the
Notes (including any Additional PIK Notes that would be issuable on the next PIK
Interest Payment Date pursuant to Section 2.3 of the Indenture) called for
redemption shall have been deposited with the Paying Agent for redemption on
such Redemption Date, then, unless the Company defaults in the payment of such
Redemption Price plus accrued interest, if any, the Notes called for redemption
will cease to bear interest from and after such Redemption Date and the only
right of the Holders of such Notes will be to receive payment of the Redemption
Price plus accrued interest, if any.
8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, and in denominations of $1,000 and integral multiples of
$1,000, or in such other denominations as the Company may elect. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be treated
as the owner of it for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any time
deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes (including any
amounts in U.S. Legal Tender required to redeem or purchase any Additional PIK
Notes that would be issuable on the next PIK Interest Payment Date) to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set forth
in the Indenture, the Indenture or the Notes may be amended or supplemented with
the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding, and any past Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes then outstanding. Without notice to or consent of any Holder, the
parties thereto may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect the rights of any Holder of a Note.
14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on the
ability of the Company and the Restricted Subsidiaries to, among other things,
incur additional Indebtedness, make Restricted Payments or Restricted
Investments, create or incur Liens, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Restricted Subsidiaries
and issue Preferred Stock of Restricted Subsidiaries, and on the ability of the
Company and the Restricted Subsidiaries to merge or consolidate with any
other Person or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of the assets of the Company and the Restricted
Subsidiaries. Such limitations are subject to a number of important
qualifications and exceptions. Pursuant to Section 4.6 of the Indenture, the
Company must annually report to the Trustee on compliance with such limitations.
15. SUCCESSORS. When a successor assumes, in accordance with the Indenture,
all the obligations of its predecessor under the Notes and the Indenture, the
predecessor, subject to certain exceptions, will be released from those
obligations.
16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is continuing,
the Trustee or the Holders of not less than 25% in aggregate principal amount of
Notes then outstanding may declare all the Notes to be due and payable in the
manner, at the time and with the effect provided in the Indenture. Holders of
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the Notes
unless it has received indemnity reasonably satisfactory to it. The Indenture
permits, subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Notes then outstanding to direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason or a
Default in compliance with Article V of the Indenture) if it determines that
withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with the Company, the Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer, employee
or incorporator, as such, of the Company or any Guarantor shall have any
liability for any obligation of the Company or any Guarantor under the Notes,
the Note Guarantees or the Indenture or for any claim based on, in respect of or
by reason of, such obligations or their creation. Each Holder of a Note by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes and the Note
Guarantees.
19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
20. GOVERNING LAW. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of Ohio, as applied to
contracts made and performed within the State of Ohio without regard to
principles of conflict of laws.
21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be used in
the name of a Holder of a Note 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).
22. 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 as a convenience to the Holders of the Notes.
No representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder of a Note upon written request and
without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Hawk Corporation, 000 Xxxxxx Xxxxxx, Xxxxx
00-0000, Xxxxxxxxx, XX 00000, Attn: Vice President - Finance.
GUARANTEE
The Guarantors (as defined in the Indenture referred to in the Note upon
which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor person under the Indenture) have
unconditionally guaranteed on a senior unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of, premium and interest (including interest payable in
the form of Additional PIK Notes) on the Notes, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set forth in Article X
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration or otherwise.
No stockholder, officer, director, employee or incorporator, as such, past,
present or future, of any Guarantor shall have any liability under the Guarantee
by reason of his or its status as such stockholder, officer, director, employee
or incorporator.
The Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be
signed manually or by facsimile by the respective parties' duly authorized
officers.
GUARANTORS:
ALLEGHENY CLEARFIELD, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
FRICTION PRODUCTS CO.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MIM, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK MOTORS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
HAWK PRECISION COMPONENTS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
XXXXX METAL STAMPINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
NET SHAPE TECHNOLOGIES LLC
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
QUARTER MASTER INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
X.X. XXXXXXX CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
SINTERLOY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
TEX RACING ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and social security or tax ID
number of assignee) and irrevocably appoint _________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _______________ ___, _____ Signed: ___________________________________
(sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: __________________________________________________________
(Signature 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 Exchange
Act.)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.15 or Section 4.16 of the Indenture, check the appropriate box:
Section 4.15 [__]
Section 4.16 [__]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:
$________________________
Dated: ____________ ___, _____ Signed: ____________________________________
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Note in every particular
without alteration or enlargement or
any change whatsoever and be
guaranteed.
Signature Guarantee: ___________________________________________________________
(Signature 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 Exchange
Act.)