--------------------------------------------------------------------------------
PETCO ANIMAL SUPPLIES, INC.
10.75% SENIOR SUBORDINATED NOTES DUE 2011
INDENTURE
Dated as of October 26, 2001
------------------------------------
U.S. BANK N.A.
Trustee
--------------------------------------------------------------------------------
CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310 (a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)(i), (ii)............................................................. 7.10
(c)...................................................................... N.A.
311 (a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312 (a)...................................................................... 2.05
(b)...................................................................... 12.03
(c)...................................................................... 12.03
313 (a)...................................................................... 7.06
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06; 12.02
(d)...................................................................... 7.06
314 (a)...................................................................... 4.03; 12.02
(b)...................................................................... N.A.
(c)(1)................................................................... 12.04
(c)(2)................................................................... 12.04
(c)(3)................................................................... N.A.
(d)...................................................................... N.A.
(e)...................................................................... 12.05
(f)...................................................................... N.A.
315 (a)...................................................................... 7.01
(b)...................................................................... 7.05; 12.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316 (a)(last sentence)....................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317 (a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318 (a)...................................................................... 12.01
(b)...................................................................... N.A.
(c)...................................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.....................................................................1
Section 1.02. Other Definitions..............................................................27
Section 1.03. Terms of TIA...................................................................27
Section 1.04. Rules of Construction..........................................................28
ARTICLE 2.
THE NOTES
Section 2.01. Form and Dating................................................................28
Section 2.02. Execution and Authentication...................................................30
Section 2.03. Registrar and Paying Agent.....................................................30
Section 2.04. Paying Agent to Hold Money in Trust............................................31
Section 2.05. Holder Lists...................................................................31
Section 2.06. Transfer and Exchange..........................................................31
Section 2.07. Replacement Notes..............................................................42
Section 2.08. Outstanding Notes..............................................................43
Section 2.09. Treasury Notes.................................................................43
Section 2.10. Temporary Notes................................................................43
Section 2.11. Cancellation...................................................................44
Section 2.12. Defaulted Interest.............................................................44
Section 2.13. CUSIP Numbers..................................................................44
ARTICLE 3.
REDEMPTION
Section 3.01. Notice of Redemption to Trustee................................................45
Section 3.02. Selection of Notes to Be Redeemed..............................................45
Section 3.03. Notice of Redemption to Holders................................................45
Section 3.04. Effect of Notice of Redemption.................................................46
Section 3.05. Deposit of Redemption Price....................................................46
Section 3.06. Notes Redeemed in Part.........................................................47
Section 3.07. Optional Redemption............................................................47
Section 3.08. Mandatory Redemption...........................................................48
ARTICLE 4.
COVENANTS
Section 4.01. Payment of Notes...............................................................48
Section 4.02. Maintenance of Office or Agency................................................48
-i-
Section 4.03. Compliance Certificate.........................................................49
Section 4.04. Taxes..........................................................................49
Section 4.05. Stay, Extension and Usury Laws.................................................49
Section 4.06. Corporate Existence............................................................50
Section 4.07. Offer to Repurchase upon Change of Control.....................................50
Section 4.08. Asset Sales....................................................................52
Section 4.09. [Intentionally Omitted]........................................................55
Section 4.10. Restricted Payments............................................................55
Section 4.11. Incurrence of Indebtedness and Issuance of Preferred Stock.....................59
Section 4.12. No Senior Subordinated Debt....................................................62
Section 4.13. Liens..........................................................................62
Section 4.14. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.....................................................62
Section 4.15. Transactions with Affiliates...................................................64
Section 4.16. Additional Note Guarantees.....................................................66
Section 4.17. Designation of Restricted and Unrestricted Subsidiaries........................66
Section 4.18. Limitations on Issuances of Guarantees of Indebtedness.........................66
Section 4.19. Business Activities............................................................67
Section 4.20. Reports........................................................................67
ARTICLE 5.
SUCCESSORS
Section 5.01. Xxxxxx, Consolidation or Sale of Assets........................................68
Section 5.02. Successor Corporation Substituted..............................................69
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..............................................................69
Section 6.02. Acceleration...................................................................71
Section 6.03. Other Remedies.................................................................72
Section 6.04. Waiver of Past Defaults........................................................72
Section 6.05. Control by Majority............................................................72
Section 6.06. Limitation on Suits............................................................73
Section 6.07. Rights of Holders of Notes to Receive Payment..................................73
Section 6.08. Collection Suit by Trustee.....................................................73
Section 6.09. Trustee May File Proofs of Claim...............................................73
Section 6.10. Priorities.....................................................................74
Section 6.11. Undertaking for Costs..........................................................74
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee..............................................................75
Section 7.02. Rights of Trustee..............................................................76
Section 7.03. Individual Rights of Trustee...................................................77
Section 7.04. Trustee's Disclaimer...........................................................77
Section 7.05. Notice of Defaults.............................................................78
Section 7.06. Reports by Trustee to Holders of the Notes.....................................78
Section 7.07. Compensation and Indemnity.....................................................78
Section 7.08. Replacement of Trustee.........................................................79
Section 7.09. Successor Trustee by Xxxxxx, etc...............................................80
Section 7.10. Eligibility; Disqualification..................................................80
Section 7.11. Preferential Collection of Claims Against Issuer...............................80
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; DISCHARGE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.......................81
Section 8.02. Legal Defeasance and Discharge.................................................81
Section 8.03. Covenant Defeasance............................................................82
Section 8.04. Conditions to Legal or Covenant Defeasance.....................................82
Section 8.05. Deposited Money and Government Securities to Be Held in Trust; Other
Miscellaneous Provisions...................................................84
Section 8.06. Repayment to Issuer............................................................84
Section 8.07. Reinstatement..................................................................85
Section 8.08. Discharge......................................................................85
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes............................................86
Section 9.02. With Consent of Holders of Notes...............................................87
Section 9.03. Compliance with Trust Indenture Act............................................89
Section 9.04. Revocation and Effect of Consents..............................................89
Section 9.05. Notation on or Exchange of Notes...............................................89
Section 9.06. Trustee to Sign Amendments, etc................................................89
ARTICLE 10.
SUBORDINATION
Section 10.01. Agreement to Subordinate.......................................................90
Section 10.02. Certain Definitions............................................................90
Section 10.03. Liquidation; Dissolution; Bankruptcy...........................................91
Section 10.04. Default on Designated Senior Debt..............................................91
Section 10.05. Acceleration of Securities.....................................................92
Section 10.06. When Distribution Must Be Paid Over............................................92
Section 10.07. Notice by Issuer...............................................................93
Section 10.08. Subrogation....................................................................93
Section 10.09. Relative Rights................................................................93
Section 10.10. Subordination May Not Be Impaired by Issuer....................................94
Section 10.11. Distribution or Notice to Representative.......................................94
Section 10.12. Rights of Trustee and Paying Agent.............................................95
Section 10.13. Authorization to Effect Subordination..........................................95
Section 10.14. Amendments.....................................................................95
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. Guarantee......................................................................96
Section 11.02. Subordination of Note Guarantee................................................97
Section 11.03. Limitation on Guarantor Liability..............................................97
Section 11.04. Execution and Delivery of Note Guarantee.......................................97
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.............................98
Section 11.06. Releases of Subsidiary Guarantors..............................................98
ARTICLE 12.
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...................................................99
Section 12.02. Notices........................................................................99
Section 12.03. Communication by Holders of Notes with Other Holders of Notes.................101
Section 12.04. Certificate and Opinion as to Conditions Precedent............................101
Section 12.05. Statements Required in Certificate or Opinion.................................101
Section 12.06. Rules by Trustee and Agents...................................................102
Section 12.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.............................................................102
Section 12.08. Governing Law.................................................................102
Section 12.09. No Adverse Interpretation of Other Agreements.................................102
Section 12.10. Successors....................................................................102
Section 12.11. Severability..................................................................102
Section 12.12. Counterpart Originals; Acceptance by Trustee..................................103
Section 12.13. Table of Contents, Headings, etc..............................................103
-ii-
EXHIBITS
Exhibit A-1 Form of Note
Exhibit A-2 Form of Regulation S Temporary Global Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor
Exhibit E Form of Senior Subordinated Note Guarantee
Exhibit F Form of Supplemental Indenture
-i-
INDENTURE dated as of October 26, 2001 by and among PETCO Animal Supplies, Inc.,
a Delaware corporation ("Issuer"), the Guarantors (as defined) and U.S. Bank
N.A., a national banking association organized and existing under the laws of
the United States, as Trustee.
Issuer and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the Notes:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. DEFINITIONS.
"144A GLOBAL NOTE" means a global note in the form of EXHIBIT
A-1 hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depository or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"ACQUIRED DEBT" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Restricted Subsidiary
of such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Restricted Subsidiary of, such specified
Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. For purposes of this definition, the
terms "controlling," "controlled by" and "under direct or indirect common
control with" shall have correlative meanings.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"AMEND" means to amend, supplement, restate, amend and restate
or otherwise modify; and "AMENDMENT" shall have a correlative meaning.
-2-
"APPLICABLE FOREIGN INVESTMENT LIMIT" means $15.0 million
increased, on the first day of each fiscal year commencing with the fiscal year
beginning on February 3, 2002, by an additional $5.0 million.
"APPLICABLE PROCEDURES" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depository, Euroclear and Clearstream that apply to such
transfer or exchange.
"ASSET" means any asset or property whether real or personal,
tangible or intangible.
"ASSET SALE" means:
(1) the sale, lease (other than under operating leases),
conveyance or other disposition of any assets or rights, other than
sales of inventory in the ordinary course of business; PROVIDED that
any transaction covered by Section 4.07 or 5.01 hereof shall be
governed by those provisions as applicable and not by Section 4.08
hereof; and
(2) the issuance of Equity Interests by any of Issuer's
Restricted Subsidiaries or the sale of Equity Interests in any of its
Restricted Subsidiaries or the sale of Equity Interests held by Issuer
or any of its Restricted Subsidiaries in any of its Unrestricted
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to be
Asset Sales:
(1) any single transaction or series of related
transactions that: (a) involves assets having a fair market value of
less than $5.0 million, or (b) results in net proceeds to Issuer and
its Restricted Subsidiaries of less than $5.0 million;
(2) an issuance of Equity Interests by a Restricted
Subsidiary to Issuer or to a Restricted Subsidiary;
(3) a Restricted Payment or a Permitted Investment that
is not prohibited by Section 4.10 hereof;
(4) any transfer of assets by Issuer to any Restricted
Subsidiary of Issuer that is a Guarantor, or by a Restricted Subsidiary
of Issuer to Issuer or to another Restricted Subsidiary of Issuer;
(5) any conversion of Cash Equivalents into cash or any
other form of Cash Equivalents;
(6) sales, transfers or other dispositions of past due
accounts receivable in the ordinary course of business;
-3-
(7) grants of credits and allowances in the ordinary
course of business;
(8) the sublease of real or personal property on
commercially reasonable terms;
(9) trade-ins or exchanges of equipment or other fixed
assets;
(10) sales, transfers or other dispositions of damaged,
worn-out or obsolete equipment or assets that, in Issuer's reasonable
judgment, are no longer either used or useful in the business of Issuer
or any of its Restricted Subsidiaries;
(11) any termination or expiration of any lease of real
property in accordance with its terms;
(12) any surrender or waiver of contract rights or the
settlement, release or surrender of contract, tort or other litigation
claims in the ordinary course of business;
(13) the granting of Liens (and foreclosure thereon) not
prohibited by this Indenture; and
(14) the closure and disposition of retail stores or
distribution centers in the ordinary course of business.
"ATTRIBUTABLE DEBT" in respect of a sale and leaseback
transaction (other than in the ordinary course of business, not involving
capital leases, with respect to individual retail store locations) means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"BENEFICIAL OWNER" has the meaning assigned to such term in
Rule 13d-3 and Rule 13d-5 under the Exchange Act. For the purposes of this
definition, the term "Beneficially Own" shall have a correlative meaning.
"BOARD OF DIRECTORS" means (1) in the case of a corporation,
the board of directors and (2) in all other cases, a body performing
substantially similar functions as a board of directors.
-4-
"BROKER-DEALER" means any broker or dealer registered with the
SEC under the Exchange Act.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CANADIAN SUBSIDIARY" means any Foreign Subsidiary of Issuer
domiciled in Canada and conducting a substantial portion of its business in
Canada.
"CAPITAL LEASE OBLIGATION" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance
sheet in accordance with GAAP.
"CAPITAL STOCK" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or
limited); and
(4) any other interest or participation (other than
Indebtedness) that confers on a Person the right to receive a share of
the profits and losses of, or distributions of assets of, the issuing
Person.
"CASH EQUIVALENTS" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not
more than six months from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with any domestic commercial
bank having capital and surplus in excess of $500 million and a Thomson
BankWatch Rating of "B" or better;
-5-
(4) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(2) and (3) above entered into with any financial institution meeting
the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable
from Xxxxx'x Investors Service, Inc. or Standard & Poor's Rating Group
and in each case maturing within six months after the date of
acquisition; and
(6) money market funds at least 95% of the assets of
which constitute Cash Equivalents of the kinds described in clauses (1)
through (5) of this definition.
"CHANGE OF CONTROL" means the occurrence of any of the
following:
(1) the sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of
Issuer and its Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Section 13(d)(3) of the Exchange Act) other
than a Sponsor or a Related Party of a Sponsor;
(2) the adoption of a plan relating to the liquidation or
dissolution of Issuer;
(3) prior to a Public Equity Offering, the Sponsors and
their Related Parties, in the aggregate, do not Beneficially Own,
directly or indirectly, Capital Stock of Issuer representing more than
50% of all voting power of the Voting Stock of Issuer;
(4) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is
that any "person" (as defined above), other than the Sponsors and their
Related Parties, becomes the Beneficial Owner, directly or indirectly,
of Capital Stock of Issuer representing more than 35% of all voting
power of the Voting Stock of Issuer, and the Sponsors and their Related
Parties, in the aggregate, Beneficially Own, directly or indirectly,
Capital Stock of Issuer representing a lesser percentage of such voting
power than the Capital Stock Beneficially Owned, directly or
indirectly, by such "person";
(5) the first day on which a majority of the members of
the Board of Directors of Issuer are not Continuing Directors; or
(6) Issuer consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into,
Issuer, in any such event pursuant to a transaction in which any of the
outstanding Voting Stock of Issuer is converted into or exchanged for
cash, securities or other assets, other than any such transaction where
the Voting Stock of Issuer outstanding immediately prior to such
transaction is con-
-6-
verted into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person constituting a majority of
the outstanding shares of such Voting Stock of such surviving or
transferee Person immediately after giving effect to such issuance.
"CLEARSTREAM" means Clearstream Banking Luxembourg.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period PLUS (to
the extent such item was deducted in computing such Consolidated Net Income) (in
each case on a consolidated basis and determined in accordance with GAAP):
(1) an amount equal to any extraordinary loss plus any
net loss realized in connection with an Asset Sale; PLUS
(2) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period; PLUS
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
interest on guaranteed indebtedness, commissions, discounts and other
fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments, if any, pursuant to Hedging
Obligations); PLUS
(4) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses or items (excluding any such non-cash expense or item to the
extent that it represents an accrual of or reserve for cash expenses or
items in any future period or amortization of a prepaid cash expense or
item that was paid in a prior period) of such Person and its Restricted
Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses or items were deducted in
computing such Consolidated Net Income; PLUS
(5) customary fees (excluding financing fees) and
professional expenses incurred in connection with any consummation of
any acquisition permitted by this Indenture; MINUS
(6) other non-cash items increasing such Consolidated Net
Income for such period, other than items that were accrued in the
ordinary course of business;
-7-
PROVIDED that the following shall be excluded:
(a) any gain (or loss), together with any related
provision for taxes on such gain (or loss), realized in connection
with: (x) any asset sale (other than in the ordinary course of
business); or (y) the disposition of any securities by such Person or
any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and
(b) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss).
"CONSOLIDATED NET INCOME" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that:
(1) the Net Income (but not loss) of any Person
(including an Unrestricted Subsidiary) that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or (subject to
clause (2) below) a Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or 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;
(3) the Consolidated Net Income of any Person shall be
increased by the amount, if any, of (a) non-cash charges relating to
the exercise of options and (b) non-cash losses (or minus non-cash
gains) from foreign currency translation, to the extent such items
reduced the Net Income of Issuer or its Restricted Subsidiaries during
any period;
(4) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(5) the cumulative effect of a change in accounting
principles shall be excluded;
(6) any restoration to income of any contingency reserve
of an extraordinary, non-recurring or unusual nature shall be excluded,
except to the extent that pro-
-8-
vision for such reserve was made out of Consolidated Net Income accrued
in any period for which Consolidated Net Income is required to be
calculated for purposes of this Indenture; and
(7) for purposes of Section 4.10 hereof, in the case of a
successor to the specified Person by consolidation or merger or as a
transferee of the specified Person's assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets shall be excluded.
"CONTINUING DIRECTORS" means, as of any date of determination,
any member of the Board of Directors of Issuer who:
(1) was a member of such Board of Directors on the date
of this Indenture; or
(2) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination
or election including new directors designated in or provided for in an
agreement regarding the merger, consolidation or sale, transfer or
other conveyance of all or substantially all of the assets of Issuer,
if such agreement was approved by a vote of such majority of directors.
"CORPORATE TRUST OFFICE" of the Trustee shall be at the
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to Issuer.
"CUSTODIAN" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"DEFAULT" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTE" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 2.06 hereof, in
the form of EXHIBIT A-1 hereto except that such Note shall not bear the Global
Note Legend and shall not have the "Schedule of Exchanges of Interests in the
Global Note" attached thereto.
"DEPOSITORY" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depository with respect to the Notes, and any and all successors
thereto appointed as depository hereunder and having become such pursuant to the
applicable provision of this Indenture.
-9-
"DISQUALIFIED STOCK" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible, or for
which it is exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or redeemable at the option of the
holder thereof, in whole or in part, on or prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders thereof have the right to require Issuer to repurchase such
Capital Stock upon the occurrence of a change of control or an asset sale shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that Issuer may not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to Issuer's purchase of such Notes as are required to be
purchased pursuant to Section 4.07 or 4.08 hereof, as applicable.
"EQUITY INTERESTS" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"EUROCLEAR" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE DEBENTURES" means Issuer's 14% Subordinated Exchange
Debentures due 2012 issued in exchange for the Senior Preferred Stock under the
Exchange Debenture Indenture.
"EXCHANGE DEBENTURE INDENTURE" means the form of exchange
debenture indenture in existence on the Issue Date or as thereafter amended in
accordance with the provisions of Issuer's certificate of incorporation;
PROVIDED that (1) the covenants thereunder shall not be materially more
restrictive, taken as a whole, than those under this Indenture, taken as a
whole, (2) the subordination provisions thereunder shall not have been changed
to materially adversely affect the rights of any Holder unless the Holders
representing a majority of the aggregate principal amount of Notes outstanding
consent to such change and (3) the Stated Maturity of the principal amount of
the Exchange Debentures shall not be earlier than October 2, 2012.
"EXCHANGE NOTES" means the Notes issued in exchange for the
Initial Notes in the Exchange Offer pursuant to Section 2.06(f) hereof or, with
respect to Initial Notes issued under this Indenture subsequent to the date of
this Indenture pursuant to Section 2.02 hereof, the exchange offer contemplated
by the registration rights agreement relating thereto substantially identical to
the Registration Rights Agreement.
-10-
"EXCHANGE OFFER" has the meaning set forth in the Registration
Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set
forth in the Registration Rights Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of Issuer and its
Restricted Subsidiaries in existence on the date of this Indenture, until such
amounts are repaid (unless replaced by Permitted Refinancing Indebtedness at the
time of repayment).
"EXISTING INVESTMENTS" means Investments outstanding on the
Issue Date.
"EXISTING PREFERRED STOCK" means Issuer's 14% Series A Senior
Redeemable Exchangeable Cumulative Preferred Stock and 12% Series B Junior
Redeemable Cumulative Preferred Stock.
"FIXED CHARGES" means, with respect to any Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letters of credit or
bankers' acceptance financings, and net payments, if any, pursuant to
Hedging Obligations; PLUS
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period (other
than Capital Lease Obligations); PLUS
(3) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; PLUS
(4) the product of (a) all dividend payments, whether or
not in cash, on any series of Disqualified Stock of such Person and on
any series of preferred stock of such Person or any of its Restricted
Subsidiaries, other than dividend payments on Equity Interests payable
solely in Equity Interests of Issuer (other than Disqualified Stock) or
payable to Issuer or a Restricted Subsidiary of Issuer, times (b) a
fraction, the numerator of which is one and the denominator of which is
one minus the then
-11-
current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP.
"FIXED CHARGE COVERAGE RATIO" means with respect to any
specified Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Fixed Charges of
such Person for such period. In the event that the specified Person or any of
its Restricted Subsidiaries incurs, Guarantees, redeems, retires, defeases or
otherwise repays any Indebtedness (other than revolving credit borrowings) or
issues or redeems or repays preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but on
or prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "CALCULATION DATE"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
Guarantee, redemption, retirement, defeasance or other repayment of
Indebtedness, or such issuance or redemption or repayment of preferred stock, as
if the same had occurred at the beginning of the applicable four-quarter
reference period.
In addition, for purposes of calculating the Fixed Charge
Coverage Ratio:
(1) acquisitions that have been made by the specified
Person or any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing transactions,
during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be
deemed to have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow for such reference period shall be
calculated without giving effect to clause (4) of the proviso set forth
in the definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses disposed of on or prior to the Calculation
Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of on or prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date.
"FOREIGN SUBSIDIARY" means any Restricted Subsidiary of Issuer
organized under the laws of, and conducting a substantial portion of its
business in, any jurisdiction other than the United States of America or any
State thereof or the District of Columbia.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting
-12-
Standards Board or in such other statements by such other entities as have been
approved by a significant segment of the accounting profession, which are in
effect as of the date of determination.
"GLOBAL NOTE LEGEND" means the legend set forth in Section
2.06(g)(ii) which is required to be placed on all Global Notes issued under this
Indenture.
"GLOBAL NOTES" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, in the form of
EXHIBIT A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"GOVERNMENT SECURITIES" means direct obligations of, or
obligations guaranteed by, the United States of America, and the payment for
which the United States pledges its full faith and credit.
"GUARANTEE" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner, including, without limitation, through letters of
credit or reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"GUARANTORS" means each of:
(1) International Pet Supplies and Distribution, Inc.,
PETCO Southwest, Inc., Pet Concepts International, PM Management
Incorporated and PETCO Southwest, L.P., and
(2) any other Subsidiary of Issuer that executes a Note
Guarantee in accordance with the provisions of this Indenture,
in each case, until such Person is released from its Note Guarantee in
accordance with the provisions of this Indenture.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements; and
(2) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates or foreign currency
exchange rates.
"HOLDER" means a Person in whose name a Note is registered.
-13-
"INCUR" means to directly or indirectly create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to any Indebtedness and "INCURRENCE"
shall have a correlative meaning. For the avoidance of doubt, the accrual of
interest or dividends and accretion or amortization of original issue discount
shall not be an incurrence; PROVIDED that in each such case, the amount thereof
is included in Fixed Charges of Issuer as accrued.
"INDEBTEDNESS" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations and all
Attributable Debt in respect of sale and leaseback transactions (other
than in the ordinary course of business, not involving capital leases,
with respect to individual retail store locations);
(5) representing the balance deferred and unpaid of the
purchase price of any asset, except any such balance that constitutes
an accrued expense or trade payable;
(6) representing any Hedging Obligations; or
(7) representing any Disqualified Stock of such Person
and any preferred stock issued by a Restricted Subsidiary of such
Person,
if and to the extent any of the preceding items (other than letters of credit,
Hedging Obligations, Disqualified Stock and preferred stock of a Restricted
Subsidiary) would appear as a liability upon a balance sheet of the specified
Person prepared in accordance with GAAP. In addition, the term "Indebtedness"
includes (a) all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person), and (b) to the extent not otherwise included, the Guarantee by such
Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date
shall be:
(1) the accreted value thereof, in the case of any
Indebtedness issued with original issue discount;
-14-
(2) the maximum fixed redemption or repurchase price, in
the case of Disqualified Stock of such Person;
(3) the maximum voluntary or involuntary liquidation
preferences plus accrued and unpaid dividends, in the case of preferred
stock of a Restricted Subsidiary of such Person; and
(4) the principal amount thereof in the case of any other
Indebtedness.
"INDENTURE" means this Indenture, as amended or supplemented
from time to time.
"INDIRECT PARTICIPANT" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"INITIAL NOTES" means, collectively, (i) the 10.75% Senior
Subordinated Notes due 2011 of Issuer issued on the date of this Indenture and
(ii) one or more series of 10.75% Senior Subordinated Notes due 2011 that are
issued subsequent to the date of this Indenture pursuant to Section 2.02 hereof,
in each case for so long as such securities constitute "restricted securities"
as such term is defined in Rule 144(a)(3) under the Securities Act; PROVIDED
that the Trustee shall be entitled to request and conclusively rely on an
Opinion of Counsel, which may be from counsel to the Holder thereof, with
respect to whether any Note constitutes such a restricted security.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"INTEREST" with respect to the Notes, means interest on the
Notes and, except for purposes of Article 9, any Liquidated Damages.
"INVESTMENTS" means, with respect to any Person, all
investments by such Person in other Persons in the forms of direct or indirect
loans (including Guarantees of Indebtedness or other obligations), advances or
capital contributions, purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. "Investment" excludes (1) extensions of trade credits and
allowances by Issuer and its Restricted Subsidiaries on commercially reasonable
terms in accordance with normal trade practices of Issuer or such Restricted
Subsidiary, as the case may be, (2) any Restricted Payment (other than with
respect to Equity Interests of a Restricted Subsidiary) described in clause (2)
of the definition thereof and (3) any purchase or acquisition of Indebtedness of
Issuer or any of its Restricted Subsidiaries (other than any Restricted Payment
described in clause (3) of the definition thereof). If Issuer or any Restricted
Subsidiary of Issuer sells or otherwise disposes of any Equity Interests of any
direct or indirect Restricted Subsidiary of
-15-
Issuer such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of Issuer, Issuer shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not sold
or disposed of in an amount determined as provided in the final paragraph of
Section 4.10 hereof. The amount of any Investment shall be the original cost of
such Investment, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment but less
all cash distributions constituting a return of capital.
"ISSUE DATE" means the date on which the Notes are first
issued.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in the City of
New York are authorized by law, regulation
or executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.
"LETTER OF TRANSMITTAL" means the letter of transmittal to be
prepared by Issuer and sent to all Holders of the Notes for use by such Holders
in connection with the Exchange Offer.
"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, and any filing of any financing statement under the
Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"LIQUIDATED DAMAGES" means all liquidated damages, if any,
then owing pursuant to Section 2(c) of the Registration Rights Agreement.
"MANAGEMENT SERVICES AGREEMENT" means the Management Services
Agreement dated as of October 2, 2000 by and among Issuer, Xxxxxxx Xxxxx &
Partners, L.P. and TPG GenPar III, L.P., as the same may be amended from time to
time.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person and its Restricted Subsidiaries, determined in accordance
with GAAP and before any reduction in respect of preferred stock dividends.
"NET PROCEEDS" means the aggregate cash proceeds received by
Issuer or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation ex-
-16-
penses incurred as a result thereof, taxes paid or payable as a result thereof,
in each case after taking into account any available tax credits or deductions,
and amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt, secured by a Lien on the asset or assets that were the subject of
such Asset Sale.
"NON-U.S. PERSON" means a Person who is not a U.S. Person.
"NOTE GUARANTEE" means the subordinated Guarantee by each
Guarantor of Issuer's payment obligations under this Indenture and the Notes,
executed pursuant to the provisions of this Indenture.
"NOTES" means, collectively, the Initial Notes and the
Unrestricted 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 the terms of this Indenture
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, any Executive or Senior
Vice President, the Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice
President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of Issuer by any two of the following: the Chief Executive Officer, the
President, the Vice President-Finance, the Chief Financial Officer, the
Treasurer, the Controller or the Secretary of Issuer and delivered to the
Trustee.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to Issuer, a Guarantor or the Trustee. The opinion may be
subject to reasonable assumptions and conditions.
"PARTICIPANT" means, with respect to the Depository, Euroclear
or Clearstream, a Person who has an account with the Depository, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"PERMITTED BUSINESS" means the business of Issuer and its
Restricted Subsidiaries conducted on the Issue Date and businesses ancillary or
reasonably related thereto or any reasonable expansion of any of the foregoing.
-17-
"PERMITTED INVESTMENTS" means:
(1) any Investment in Cash Equivalents or the Notes;
(2) any Investment in Issuer or any Guarantor;
(3) any Investment by Issuer or any of its Restricted
Subsidiaries in a Person, if as a result of such Investment:
(a) such Person becomes a Guarantor; or
(b) such Person is merged or consolidated with
or into, or transfers or conveys all or substantially all of
its assets to, or is liquidated into, Issuer or a Guarantor;
(4) any Investment by any Restricted Subsidiary of Issuer
that is not a Guarantor in:
(a) any other Restricted Subsidiary of Issuer;
or
(b) any Person, if as a result of such
Investment (x) such Person becomes a Restricted Subsidiary of
Issuer, or (y) such Person is merged or consolidated with or
into, or transfers or conveys all or substantially all of its
assets to, or is liquidated into, Issuer or any of its
Restricted Subsidiaries;
(5) any Existing Investments;
(6) Investments of a Person or any of its Subsidiaries
existing at the time such Person becomes a Restricted
Subsidiary or at the time such Person merges or consolidates with
Issuer or any of its Restricted Subsidiaries, in either case, in
compliance with this Indenture; PROVIDED that such Investments were not
made by such Person in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary or such
merger or consolidation;
(7) Investments in purchase price adjustments, contingent
purchase price payments or other earn-out obligations received in
connection with Investments otherwise permitted under this Indenture;
(8) Hedging Obligations permitted by clause (6) of the
second paragraph of Section 4.11 hereof;
(9) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and
in compliance with Section
-18-
4.08 hereof or any transaction not constituting an Asset Sale by reason of the
$5.0 million threshold contained in the definition thereof;
(10) any Investment acquired in exchange for the issuance
of, or acquired with the net cash proceeds of any substantially
concurrent issuance and sale of, Equity Interests (other than
Disqualified Stock) of Issuer; PROVIDED that no such issuance or sale
shall increase the Basket;
(11) loans and advances to employees of Issuer for
emergencies and for moving, entertainment, travel and other business
expenses in the ordinary course of business;
(12) loans and advances not to exceed (a) $2.0 million at
any one time outstanding pursuant to this subclause (a) to employees of
Issuer or its Subsidiaries for the purpose of funding the purchase of
Capital Stock of Issuer by such employees and (b) $2.0 million at any
time outstanding pursuant to this subclause (b) to employees of Issuer
or any of its Subsidiaries which may be used for any other purpose;
(13) Investments (without duplication) in Foreign
Subsidiaries and Petcetera; PROVIDED that the aggregate amount of
Investments made and outstanding pursuant to this clause (13) at any
time shall not exceed the lesser of (x) $30.0 million and (y) the
Applicable Foreign Investment Limit at such time, increased in each
case by the amount (not to exceed $7.0 million) of Indebtedness owed to
Issuer or any of its Restricted Subsidiaries on the date of this
Indenture by any investor in Petcetera (other than Issuer and its
Restricted Subsidiaries) that is repaid after the date of this
Indenture;
(14) Investments received in settlement of obligations or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy, insolvency, reorganization, recapitalization or liquidation
of any Person or the good faith settlement of debts of any Person;
(15) other Investments in any Person having an aggregate
fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (15),
not to exceed $10.0 million at any one time outstanding;
(16) any Guarantees of Indebtedness to the extent
permitted by clause (7) of the second paragraph of Section 4.11 hereof;
and
(17) any Investments representing amounts held for
employees of the Issuer and its Restricted Subsidiaries under the
Issuer's deferred compensation plan, PROVIDED the amount of such
Investments (excluding income earned thereon) shall not ex-
-19-
ceed the amount otherwise payable to such employees the payment of
which was deferred under such plan and any amounts matched by the
Issuer under such plan.
Permitted Investments shall not be deemed to be Restricted Payments.
"PERMITTED LIENS" means:
(1) Liens securing Senior Debt or any Indebtedness of any
Foreign Subsidiary;
(2) Liens in favor of Issuer or any Restricted
Subsidiary;
(3) Liens on assets of a Person existing at the time such
Person is acquired by or merged or consolidated with or into Issuer or
any Restricted Subsidiary of Issuer; PROVIDED that such Liens were in
existence prior to the contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those of the
Person acquired by or merged or consolidated with or into Issuer or its
Restricted Subsidiary;
(4) Liens on any assets of any Person existing at the
time of acquisition of such assets by Issuer or any Restricted
Subsidiary of Issuer, PROVIDED that such Liens were in existence prior
to the contemplation of such acquisition and do not extend to any
assets other than the assets so acquired;
(5) Liens to secure the performance of statutory
obligations, including Xxxxx made in connection with workmen's
compensation, unemployment insurance, old-age pensions, social security
and public liability and similar legislation, surety or appeal bonds,
performance bonds or other obligations of a like nature incurred in the
ordinary course of business;
(6) Liens to secure indebtedness the proceeds of which
are used to acquire the assets subject to the Lien; PROVIDED, the Lien
covers only the assets acquired with such Indebtedness;
(7) Liens existing on the date of this Indenture;
(8) Liens securing Permitted Refinancing Indebtedness
which is incurred to refinance any Indebtedness which has been secured
by a Lien permitted under this Indenture and which has been incurred in
accordance with the provisions of this Indenture; PROVIDED that such
Liens (A) are not materially less favorable to the Holders and are not
materially more favorable to the lienholders with respect to such Liens
than the Liens in respect of the Indebtedness being refinanced and (B)
do not extend to
-20-
or cover any assets of Issuer or any of its Restricted Subsidiaries not
securing the Indebtedness so refinanced;
(9) Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account of
such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;
(10) Liens securing reimbursement obligations with respect
to letters of credit which encumber documents and other assets relating
to such letters of credit and products and proceeds thereof;
(11) Liens securing the payment of taxes, assessments and
governmental charges or levies, either (A) not delinquent or (B) being
contested in good faith by appropriate proceedings;
(12) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens that are not
delinquent or that are being contested in good faith and by appropriate
proceedings;
(13) Liens securing (a) the non-delinquent performance of
bids, trade contracts (other than for borrowed money), leases and
statutory obligations and (b) other non-delinquent obligations of a
like nature, incurred in the ordinary course of business;
(14) Liens consisting of judgment or judicial attachment
Xxxxx and Liens securing contingent obligations on appeal bonds and
other bonds posted in connection with court proceedings or judgments,
only for so long as the existence of the related judgment does not
otherwise give rise to an Event of Default;
(15) interests of lessors or sublessors, easements,
rights-of-way, zoning restrictions and other similar encumbrances or
other title defects which, in the aggregate, do not materially detract
from the value of the property subject thereto or interfere with the
ordinary conduct of the business of Issuer and its Subsidiaries taken
as a whole;
(16) purchase money security interests on any assets
acquired by Issuer or any of its Restricted Subsidiaries, securing
Indebtedness incurred or assumed for the purpose of financing all or
any part of the cost of acquiring, developing, constructing, installing
or improving such assets, PROVIDED that (a) any such Lien attaches to
such assets concurrently with or within 180 days after the acquisition,
development, construction, installation or improvement thereof, (b)
such Lien attaches solely to the assets so acquired, developed,
constructed, installed or improved in such transaction, and
-21-
(c) the principal amount of the Indebtedness secured thereby does not
exceed 100% of the cost of such assets;
(17) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for sale of goods;
(18) Liens securing Obligations in respect of Capital
Lease Obligations on assets subject to such lease; PROVIDED that such
Capital Lease Obligations are otherwise permitted hereunder;
(19) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of setoff or
similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution;
(20) licenses of intellectual property granted in the
ordinary course of business; and
(21) Liens in favor of customs or revenue authorities in
connection with customs duties.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness or
Preferred Stock of Issuer or any of its Restricted Subsidiaries issued in
exchange for, or the net proceeds of which are used to refinance, other
Indebtedness or Preferred Stock of Issuer or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); PROVIDED that:
(1) the principal amount (or accreted value, if
applicable) or liquidation preference of such Permitted Refinancing
Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest and premium, if any, on
the Indebtedness, or the liquidation preference, plus accrued dividends
and premium, if any, on the Preferred Stock so refinanced (plus the
amount of reasonable fees and expenses incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness or Preferred Stock being
refinanced;
(3) if the Indebtedness being refinanced is contractually
subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is contractually subordinated in right of
payment to the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the
Indebtedness being refinanced;
-22-
(4) Preferred Stock shall be refinanced only with
Preferred Stock; and
(5) such Indebtedness or Preferred Stock is incurred
either by Issuer or by the Restricted Subsidiary that is the obligor on
the Indebtedness, or the issuer of the Preferred Stock, as applicable,
being refinanced.
"PERSON" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint venture
or a governmental agency or political subdivision thereof.
"PETCETERA" means Canadian Petcetera Limited Partnership or
any successor business.
"PREFERRED STOCK" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemption or upon liquidation.
"PRIVATE PLACEMENT LEGEND" means the legend set forth in
Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
"PUBLIC EQUITY OFFERING" means any underwritten public
offering of common stock of Issuer in which the gross proceeds to Issuer are at
least $50.0 million.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"REDEEM" means to redeem, repurchase, purchase, defease,
retire, discharge or otherwise acquire or retire for value; and "REDEMPTION"
shall have a correlative meaning. For the avoidance of doubt, an offer to
purchase Notes as required by Sections 4.07 and 4.08 shall not constitute a
redemption of the Notes.
"REFINANCE" means to refinance, repay, prepay, replace, renew
or refund; and "REFINANCING" shall have a correlative meaning.
"REGISTRATION RIGHTS AGREEMENT" means the Exchange and
Registration Rights Agreement, dated as of the date of this Indenture, by and
among Issuer and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time, and, with
respect to Initial Notes issued under this Indenture subsequent to the date of
this Indenture pursuant to Section 2.02 hereof, the registration rights
agreement relating thereto substantially identical to the Registration Rights
Agreement.
"REGULATION S" means Regulation S promulgated under the
Securities Act.
-23-
"REGULATION S GLOBAL NOTE" means a Regulation S Temporary
Global Note or Regulation S Permanent Global Note, as appropriate.
"REGULATION S PERMANENT GLOBAL NOTE" means a permanent global
Note in the form of EXHIBIT A-1 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global
Note in the form of EXHIBIT A-2 hereto bearing the Global Note Legend and the
Private Placement Legend and deposited with or on behalf of and registered in
the name of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"RELATED BUSINESS ASSETS" means assets used or useful in a
Permitted Business or securities of a Person principally engaged in a Permitted
Business who is a Restricted Subsidiary after the acquisition of such securities
by Issuer or any of its Restricted Subsidiaries.
"RELATED PARTY" with respect to any Sponsor means:
(1) any Affiliate of such Sponsor (including, without
limitation, any Subsidiary of such Sponsor);
(2) any controlling stockholder of such Sponsor;
(3) any general partner of such Sponsor; or
(4) any investment fund or investment partnership,
limited liability company or similar entity managed by such Sponsor or
any Person referred to in clause (1), (2) or (3) above.
"RESPONSIBLE OFFICER," when used with respect to the Trustee,
means any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing
the Private Placement Legend.
-24-
"RESTRICTED GLOBAL NOTE" means a Global Note bearing the
Private Placement Legend.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED PERIOD" means the 40-day restricted period as
defined in Regulation S.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of
the referent Person that is not an Unrestricted Subsidiary.
"RULE 144" means Rule 144 promulgated under the Securities
Act.
"RULE 144A" means Rule 144A promulgated under the
Securities Act.
"RULE 903" means Rule 903 promulgated under the Securities
Act.
"RULE 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR CREDIT FACILITY" means the Credit Agreement, dated as
of October 2, 2000 among Issuer, as borrower, the lenders listed therein and
Xxxxx Fargo Bank, N.A. and Xxxxxxx Xxxxx Credit Partners L.P., as agents,
including any notes, guarantees, collateral and security documents (including
mortgages, pledge agreements and other security arrangements), instruments and
agreements executed in connection therewith, and in each case as amended or
refinanced from time to time, including any agreement or agreements extending
the maturity of, refinancing or otherwise restructuring (including increasing
the amount of borrowings or other Indebtedness outstanding or available to be
borrowed thereunder) all or any portion of the Indebtedness under such
agreement, and any successor or replacement agreement or agreements with the
same or any other borrowers, agents, creditors, lenders or group of creditors or
lenders.
"SENIOR PREFERRED STOCK" means Issuer's 14% Series A Senior
Redeemable Exchangeable Cumulative Preferred Stock outstanding on the date of
this Indenture and any such Preferred Stock issued in payment of dividends
thereon.
"SHELF REGISTRATION STATEMENT" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
-25-
"SIGNIFICANT SUBSIDIARY" means (1) any Restricted Subsidiary
that would be a "significant subsidiary" as defined in Regulation S-X
promulgated pursuant to the Securities Act as such Regulation is in effect on
the Issue Date and (2) any Restricted Subsidiary that, when aggregated with all
other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in Section 6.01(f), 6.01(g) or 6.01(h) has
occurred and is continuing, would constitute a Significant Subsidiary under
clause (1) of this definition.
"SPONSOR" means Green Equity Investors III, L.P., a Delaware
limited partnership, and/or Affiliates of TPG Partners III, L.P., a Delaware
limited partnership.
"STATED MATURITY" means, with respect to any installment of
interest or principal on any Indebtedness, the date on which such payment of
interest or principal is scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any interest or principal prior to the date
originally scheduled for the payment thereof.
"SUBSIDIARY" means, with respect to any Person:
(1) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person (or a combination
thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture
is qualified under the TIA, except as provided in Section 9.03 hereof.
"TRUSTEE" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of
this Indenture and thereafter means the successor serving hereunder.
"UNRESTRICTED DEFINITIVE NOTES" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
-26-
"UNRESTRICTED GLOBAL NOTE" means a permanent global Note in
the form of EXHIBIT A-1 attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depository, representing a series of Notes that do not and are not
required to bear the Private Placement Legend.
"UNRESTRICTED NOTES" means one or more Unrestricted Global
Notes and/or Unrestricted Definitive Notes, including, without limitation, the
Exchange Notes.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of Issuer that
is designated by the Board of Directors of Issuer as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary, at
the time of such designation, is not party to any agreement, contract or
arrangement with Issuer or any Restricted Subsidiary of Issuer unless the terms
of any such agreement, contract or arrangement are no less favorable to Issuer
or such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of Issuer.
Any designation of a Subsidiary of Issuer as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.10 hereof.
"U.S. PERSON" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees of such
Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness or Disqualified Stock at any date, the number of years obtained by
dividing:
(1) the sum of the products obtained by multiplying (a)
the amount of each then remaining installment, sinking fund, serial
maturity or other required payment of principal or liquidation
preference, including payment at final maturity, in respect thereof, by
(b) the number of years (calculated to the nearest one-twelfth) that
will elapse between each such date and the making of each such payment;
by
(2) the then outstanding principal amount or liquidation
preference of such Indebtedness or Disqualified Stock.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of
-27-
which (other than directors' qualifying shares) shall at the time be owned by
such Person and/or by one or more Wholly Owned Restricted Subsidiaries of
such Person.
Section 1.02. OTHER DEFINITIONS.
DEFINED
TERM IN SECTION
---- ----------
"AFFILIATE TRANSACTION"................................................ 4.15
"ALTERNATE OFFER"...................................................... 4.07
"ASSET SALE OFFER"..................................................... 4.08
"ASSET SALE OFFER AMOUNT".............................................. 4.08
"ASSET SALE PAYMENT"................................................... 4.08
"ASSET SALE PAYMENT DATE" ............................................. 4.08
"AUTHENTICATION ORDER"................................................. 2.02
"BASKET"............................................................... 4.10
"CHANGE OF CONTROL OFFER".............................................. 4.07
"CHANGE OF CONTROL PAYMENT"............................................ 4.07
"CHANGE OF CONTROL PAYMENT DATE" ...................................... 4.07
"COVENANT DEFEASANCE".................................................. 8.03
"DESIGNATED SENIOR DEBT"............................................... 10.02
"EVENT OF DEFAULT"..................................................... 6.01
"FIXED CHARGE COVERAGE RATIO EXCEPTION"................................ 4.11
"ISSUER"............................................................... preamble
"LEGAL DEFEASANCE" .................................................... 8.02
"PAYING AGENT"......................................................... 2.03
"PAYMENT BLOCKAGE NOTICE".............................................. 10.04
"PAYMENT DEFAULT"...................................................... 6.01
"PERMITTED DEBT"....................................................... 4.11
"PERMITTED JUNIOR SECURITIES".......................................... 10.02
"REGISTRAR"............................................................ 2.03
"REPRESENTATIVE"....................................................... 10.02
"RESTRICTED PAYMENTS".................................................. 4.10
"SENIOR DEBT".......................................................... 10.02
"TRUSTEE".............................................................. preamble
Section 1.03. TERMS OF TIA.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
-28-
The following TIA terms used in this Indenture have the
following meanings:
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and
"OBLIGOR" on the Notes and the Note Guarantees means Issuer
and the Guarantors, respectively, and any successor obligor upon the
Notes and the Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires: (i) a term has the
meaning assigned to it; (ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural include the
singular; (v) provisions apply to successive events and transactions; and (vi)
references to sections of or rules under the Securities Act or the Exchange Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01. FORM AND DATING.
(a) GENERAL. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of EXHIBIT A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture, and Issuer,
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.
However, to the extent any provision of any Note conflicts with the express
provisions of this Indenture, the provisions of this Indenture shall govern and
be controlling.
(b) GLOBAL NOTES. Notes issued in global form shall be
substantially in the form of EXHIBITS A-1 or A-2 attached hereto (including the
Global Note Legend thereon and
-29-
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form shall be substantially in the form of EXHIBIT
A-1 attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
(c) TEMPORARY GLOBAL NOTES. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its Corporate Trust Office,
as custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Clearstream, duly executed by Issuer and authenticated by
the Trustee as hereinafter provided. The Restricted Period shall terminate upon
the receipt by the Trustee of (i) a written certificate from the Depository,
together with copies of certificates from Euroclear and Clearstream certifying
that they have received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S Temporary Global
Note (except to the extent of any beneficial owners thereof who acquired an
interest therein during the Restricted Period pursuant to another exemption from
registration under the Securities Act and who will take delivery of a beneficial
ownership interest in a 144A Global Note bearing a Private Placement Legend, all
as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers'
Certificate from Issuer. Following the termination of the Restricted Period,
beneficial interests in the Regulation S Temporary Global Note shall be
exchanged for beneficial interests in Regulation S Permanent Global Notes
pursuant to the Applicable Procedures. Simultaneously with the authentication of
Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S
Temporary Global Note. The aggregate principal amount of the Regulation S
Temporary Global Note and the Regulation S Permanent Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee, as the case may be, in connection
with transfers of interest as hereinafter provided.
(d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The
operating procedures, terms and conditions of Euroclear and Clearstream shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by
Participants through Euroclear or Clearstream.
-30-
Section 2.02. EXECUTION AND AUTHENTICATION.
An Officer shall sign the Notes for Issuer by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual or
facsimile signature of the Trustee. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of Issuer signed by an
Officer (an "AUTHENTICATION ORDER"), authenticate (i) Initial Notes for original
issue in an unlimited principal amount and (ii) Unrestricted Notes from time to
time in exchange for a like principal amount of Initial Notes or for original
issue in an unlimited principal amount.
In the event that Issuer shall issue and the Trustee shall
authenticate any Notes issued under this Indenture subsequent to the date of
this Indenture, Issuer shall use its reasonable best efforts to obtain the same
"CUSIP" number for such Notes as is printed on the Notes outstanding at such
time; PROVIDED, HOWEVER, that if any series of Notes issued under this Indenture
subsequent to the date of this Indenture is determined, pursuant to an Opinion
of Counsel of Issuer in a form reasonably satisfactory to the Trustee, to be a
different class of security than the Notes outstanding at such time for federal
income tax purposes, the Issuer may obtain a "CUSIP" number for such Notes that
is different than the "CUSIP" number printed on the Notes then outstanding.
Notwithstanding the foregoing, all Notes issued and outstanding under this
Indenture shall vote and consent together on all matters as one class and no
series of Notes will have the right to vote or consent as a separate class on
any matter.
The Trustee may appoint an authenticating agent acceptable to
Issuer to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of Issuer.
Section 2.03. REGISTRAR AND PAYING AGENT.
Issuer shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
Issuer may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. Issuer may change any Paying Agent
or Registrar without notice to any Holder. Issuer shall notify the Trustee in
writing of the name and address of any Agent not a party to this Indenture. If
Issuer fails to appoint or
-31-
maintain another entity as Registrar or Paying Agent, the Trustee shall act as
such. Issuer or any of its Subsidiaries may act as Paying Agent or Registrar.
Issuer initially appoints The Depository Trust Company to act
as Depository with respect to the Global Notes.
Issuer initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
Issuer shall, prior to each interest record date, notify the
Paying Agent of any wire transfer instructions for payments that it receives
from Holders.
Section 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
Issuer shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal or premium, if any, or interest on the Notes, and will notify the
Trustee of any default by Issuer in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. Issuer at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than Issuer or a Subsidiary) shall have no further liability for
the money. If Issuer or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to Issuer, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, Issuer shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require of the names and addresses of
the Holders of Notes and Issuer shall otherwise comply with TIA Section
312(a).
Section 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note
may not be transferred as a whole except by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or to another
nominee of the Depository, or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Global Notes
will not be exchanged by Issuer for Definitive Notes unless (i) Issuer
-32-
delivers to the Trustee notice from the Depository that it is unwilling or
unable to continue to act as Depository or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depository is not appointed by Issuer within 120 days after the date of such
notice from the Depository; (ii) Issuer in its sole discretion determines that
the Global Notes (in whole but not in part) should be exchanged for Definitive
Notes and delivers a written notice to such effect to the Trustee (provided that
in no event shall the Regulation S Temporary Global Note be exchanged by Issuer
for Definitive Notes prior to (x) the expiration of the Restricted Period and
(y) the receipt by the Registrar of any certificates required pursuant to Rule
903(c)(3)(ii)(B) under the Securities Act and provided further, there shall be
no continuing Default or Event of Default); or (iii) an Event of Default shall
have occurred and be continuing with respect to the Notes and the Trustee has
received a request from the Depository or any Holder to issue Definitive Notes.
Upon the occurrence of any of the preceding events in (i), (ii) or (iii) above,
Definitive Notes shall be issued in such names as the Depository shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b) or (f) hereof.
(b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN
GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depository, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE.
Beneficial interests in any Restricted Global Note may be transferred
to Persons who take delivery thereof in the form of a beneficial
interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend;
provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Temporary Regulation S
Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(i).
-33-
(ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS
IN GLOBAL NOTES. In connection with all transfers and exchanges of
beneficial interests in any Global Note that is not subject to Section
2.06(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar (1) a written order from a Participant or an
Indirect Participant given to the Depository in accordance with the
Applicable Procedures directing the Depository to credit or cause to be
credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase. Upon consummation of the Exchange Offer by Issuer
in accordance with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt
by the Registrar of the instructions contained in the Letter of
Transmittal delivered by the holder of such beneficial interests in the
Restricted Global Notes. Upon satisfaction of all of the requirements
for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of
the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of Section 2.06(b)(ii) above and the
Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in a 144A Global Note, then the
transferor must deliver a certificate in the form of EXHIBIT B
hereto, including the certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form
of a beneficial interest in a Regulation S Global Note, then
the transferor must deliver a certificate in the form of
EXHIBIT B hereto, including the certifications in item (2)
thereof;
(iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN AN UNRESTRICTED
GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of
-34-
the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is
not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an
affiliate (as defined in Rule 144) of Issuer;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Shelf Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of EXHIBIT C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of EXHIBIT B
hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
Issuer shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
-35-
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN
GLOBAL NOTES FOR DEFINITIVE NOTES. A beneficial interest in a Global Note may
not be exchanged for a Definitive Note except under the circumstances described
in Section 2.06(a) hereof. A beneficial interest in a Global Note may not be
transferred to a Person who takes delivery thereof in the form of a Definitive
Note except under the circumstances described in Section 2.06(a) hereof.
(d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR
BENEFICIAL INTERESTS IN GLOBAL NOTES.
(i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global Note or
to transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note, then,
upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes
to exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of EXHIBIT C hereto,
including the certifications in item (2)(a) thereof;
(B) if such Restricted Definitive Note is being transferred to
a QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto, including the
certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
903 or Rule 904 under the Securities Act, a certificate to the effect
set forth in EXHIBIT B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the
Securities Act in accordance with Rule 144 under the Securities Act, a
certificate to the effect set forth in EXHIBIT B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to the
effect set forth in EXHIBIT B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d) thereof, if
applicable;
-36-
(F) if such Restricted Definitive Note is being transferred to
Issuer or any of its Subsidiaries, a certificate to the effect set
forth in EXHIBIT B hereto, including the certifications in item (3)(b)
thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, and increase or cause
to be increased the aggregate principal amount of, in the case of clause (A)
above, the appropriate Restricted Global Note, in the case of clause (B) above,
the 144A Global Note, and in the case of clause (C) above, the Regulation S
Global Note.
(ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the Holder, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of Issuer;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes
to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in
the form of EXHIBIT C hereto, including the certifications in
item (1)(b) thereof; or
(2) if the Holder of such Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery
thereof in the form of a beneficial in-
-37-
terest in the Unrestricted Global Note, a certificate from
such Holder in the form of EXHIBIT B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN
UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or transfer, the Trustee shall cancel
the applicable Unrestricted Definitive Note and increase or cause to be
increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
Issuer shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR
DEFINITIVE NOTES. Upon request by a Holder of Definitive Notes and such Holder's
compliance with the provisions of this Section 2.06(e), the Registrar shall
register the transfer or exchange of Definitive Notes. Prior to such
registration of transfer or exchange, the requesting Holder shall present or
surrender to the Registrar the Definitive Notes duly endorsed or accompanied by
a written instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by its attorney, duly authorized in writing. In
addition, the requesting Holder shall provide any additional certifications,
documents and information, as applicable, required pursuant to the following
provisions of this Section 2.06(e).
(i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
-38-
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of EXHIBIT B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904 under the Securities Act, then the transferor must
deliver a certificate in the form of EXHIBIT B hereto,
including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of EXHIBIT B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)(d)
thereof, if applicable.
(ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person
or Persons who take delivery thereof in the form of an Unrestricted
Definitive Note if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of Issuer;
(B) any such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of EXHIBIT C hereto,
including the certifications in item (1)(c) thereof;
or
(2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such
-39-
Holder in the form of EXHIBIT B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to Issuer to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE
NOTES. A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note. Upon receipt of a request to register
such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) EXCHANGE OFFER. Upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, Issuer shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.02,
the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
broker-dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of Issuer, and
accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
Issuer shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) LEGENDS. The following legends shall appear on the
face of all Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) PRIVATE PLACEMENT LEGEND.
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
-40-
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) (1) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN
THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR AS
DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF
REGULATION D IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (5) PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION AVAILABLE UNDER THE SECURITIES ACT OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraph (b)(iv),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section
2.06 (and all Notes issued in exchange therefor or
substitution thereof) shall not bear the Private Placement
Legend.
(ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a
legend in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS
DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE
IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO
SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY
BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO
SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANS-
-41-
FERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN
CONSENT OF ITS ISSUER."
(iii) REGULATION S TEMPORARY GLOBAL NOTE LEGEND. The
Regulation S Temporary Global Note shall bear a legend in substantially
the following form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN)."
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At
such time as all beneficial interests in a particular Global Note have been
exchanged for Definitive Notes or a particular Global Note has been redeemed,
repurchased or canceled in whole and not in part, each such Global Note shall be
returned to or retained and canceled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for or transferred to a Person who will take
delivery thereof in the form of a beneficial interest in another Global Note or
for Definitive Notes, the principal amount of Notes represented by such Global
Note shall be reduced accordingly and an endorsement shall be made on such
Global Note by the Trustee or by the Depository at the direction of the Trustee
to reflect such reduction; and if the beneficial interest is being exchanged for
or transferred to a Person who will take delivery thereof in the form of a
beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement shall be made on such Global Note by
the Trustee or by the Depository at the direction of the Trustee to reflect such
increase.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND
EXCHANGES.
(i) To permit registrations of transfers and exchanges, Issuer
shall execute and the Trustee shall authenticate Global Notes and Definitive
Notes upon Issuer's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but Issuer may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar governmental
charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.07,
4.08 and 9.05 hereof).
(iii) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of Issuer, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
-42-
(iv) The Registrar shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest Payment
Date.
(v) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and Issuer may deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or Issuer shall
be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(vii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by facsimile.
(viii) Each Holder of a Note agrees to indemnify Issuer and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Xxxxxx's Note in violation of any provision of this Indenture
and/or applicable United States federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or inquire as
to compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among Depository Participants or beneficial
owners of interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
Section 2.07. REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or Issuer
and the Trustee receive evidence to its satisfaction of the destruction, loss or
theft of any Note, Issuer shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. An indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and Issuer to protect Issuer, the
Trus-
-43-
tee, any Agent and any authenticating agent from any loss that any of them
may suffer if a Note is replaced. Issuer may charge for its expenses in
replacing a Note.
Every replacement Note is an additional obligation of Issuer
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest in a Global Note effected
by the Trustee in accordance with the provisions hereof and those described in
this Section as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because Issuer or an Affiliate of Issuer
holds the Note; however, Notes held by Issuer or a Subsidiary of Issuer shall
not be deemed to be outstanding for purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than Issuer, a Subsidiary of Issuer
or an Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by Issuer, or by any Person directly or indirectly controlling or controlled by
or under direct or indirect common control with Issuer, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee knows are so owned shall be
so disregarded.
Section 2.10. TEMPORARY NOTES.
Issuer may prepare and the Trustee, upon receipt of an
Authentication Order, shall authenticate temporary Notes. Temporary Notes shall
be substantially in the form of
-44-
permanent Notes but may have variations that Issuer considers appropriate for
temporary Notes and as shall be reasonably acceptable to the Trustee. Issuer may
prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate permanent Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11. CANCELLATION.
Issuer at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
the Notes in accordance with its customary procedures (subject to the record
retention requirement of the Exchange Act). Issuer may not issue new Notes to
replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. DEFAULTED INTEREST.
If Issuer defaults in a payment of interest on the Notes, such
interest shall cease to be payable to the Holders on the relevant record date
and Issuer shall instead pay the defaulted interest in any lawful manner plus,
to the extent lawful, interest payable on the defaulted interest, to the Persons
who are Holders on a subsequent special record date, in each case at the rate
provided in the Notes and in Section 4.01 hereof. Issuer 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. Issuer shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
Issuer (or, upon the written request of Issuer, the Trustee in the name and at
the expense of Issuer) shall mail or cause to be mailed to Holders a notice that
states the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13. CUSIP NUMBERS.
Issuer, in issuing the Notes, may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. Issuer will promptly notify the Trustee of any change
in the "CUSIP" numbers.
-45-
ARTICLE 3.
REDEMPTION
Section 3.01. NOTICE OF REDEMPTION TO TRUSTEE.
If Issuer elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 90 days before the redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time
pursuant to Section 3.07 hereof, the Trustee shall select Notes for redemption
as follows:
o if the Notes are listed, in compliance with the requirements
of the principal national securities exchange on which the
Notes are listed; or
o if the Notes are not so listed, on a pro rata basis, by lot or
by such method as the Trustee shall deem fair and appropriate.
In the event of partial redemption by lot pursuant to Section
3.07 hereof, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify Issuer in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. No Notes of $1,000 or less
shall be redeemed in part.
Section 3.03. NOTICE OF REDEMPTION TO HOLDERS.
If Issuer elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, at least 30 days but not more than
60 days before the redemption date, Issuer shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address. Notices of redemption may
-46-
not be conditional; PROVIDED that if the redemption is pursuant to Section
3.07(b) hereof and the proposed redemption date is not later than 30 days after
the date of closing of such Public Equity Offering, the redemption may be
subject to such closing. The notice shall identify the Notes to be redeemed
(including "CUSIP" number(s)) and shall state: (i) the redemption date; (ii) the
redemption price; (iii) if any Note is being redeemed in part, the portion of
the principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note; (iv) the name and address of the Paying Agent; (v) that Notes called for
redemption must be surrendered to the Paying Agent to collect the redemption
price; (vi) that, unless Issuer defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
redemption date; (vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
(viii) if the second sentence of this paragraph is applicable, that the
redemption is subject to the closing of the Public Equity Offering; and (ix)
that no representation is made as to the correctness or accuracy of the "CUSIP"
number, if any, listed in such notice or printed on the Notes.
At Issuer's request, the Trustee shall give the notice of
redemption in Issuer's name and at its expense; PROVIDED, HOWEVER, that Issuer
shall have delivered to the Trustee, at least 60 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price unless the notice of redemption is
conditional in accordance with Section 3.03 hereof and the condition is not met.
Section 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, Issuer shall
deposit with the Paying Agent money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date. The Paying Agent
shall promptly return to Issuer any money deposited with the Paying Agent by
Issuer in excess of the amounts necessary to pay the redemption price of, and
accrued interest on, all Notes to be redeemed.
If Issuer complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any
-47-
Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of Issuer to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
Section 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, Issuer
shall issue and, upon Issuer's written request, the Trustee shall authenticate
for the Holder at the expense of Issuer a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
Section 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section
3.07, Issuer shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to November 1, 2006. On or after November 1, 2006, the Notes
will be subject to redemption at any time at the option of Issuer, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon, if any, to the applicable redemption date,
if redeemed during the twelve-month period beginning on November 1 of the years
indicated below:
YEAR PERCENTAGE
---- ----------
2006.......................................... 105.375%
2007.......................................... 103.583%
2008.......................................... 101.792%
2009 and thereafter........................... 100.000%
(b) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time on or prior to November 1, 2004, Issuer may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes at
a redemption price equal to 110.75% of the principal amount thereof, plus
accrued and unpaid interest thereon, if any, to the redemption date, with the
net cash proceeds of one or more Public Equity Offerings by Issuer; PROVIDED
that (i) at least 65% of the aggregate principal amount of Notes issued under
this Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by Issuer and its Subsidiaries) and (ii) such
redemption shall occur within 90 days of the date of the closing of such Public
Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
-48-
Section 3.08. MANDATORY REDEMPTION.
Issuer shall not be required to make mandatory redemption
payments with respect to the Notes. For the avoidance of doubt, an offer to
purchase pursuant to Section 4.07 or 4.08 shall not be deemed a redemption.
ARTICLE 4.
COVENANTS
Section 4.01. PAYMENT OF NOTES.
Issuer shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes. Principal, premium, if any, and interest shall be
considered paid on the date due if the Paying Agent, if other than Issuer or a
Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money
deposited by Issuer in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due. Issuer
shall pay all Liquidated Damages, if any, in the same manner on the dates and in
the amounts set forth in the Registration Rights Agreement.
Issuer shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to the then applicable interest rate on the Notes to the extent lawful; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
Section 4.02. MAINTENANCE OF OFFICE OR AGENCY.
Issuer shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon Issuer in respect of the Notes and this Indenture may be
served. Issuer shall give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
Issuer may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve
Issuer of its obligation to maintain an office or agency
-49-
in the Borough of Manhattan, the City of
New York for such purposes. Issuer
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Issuer hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of Issuer in accordance with Section 2.03.
Section 4.03. COMPLIANCE CERTIFICATE.
(a) Issuer and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of Issuer and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether Issuer has kept, observed, performed and fulfilled
its obligations under this Indenture, and further stating, as to each such
Officer signing such certificate, that to the best of his or her knowledge
Issuer has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default shall have occurred and be continuing, describing all such Defaults
of which he or she may have knowledge and what action Issuer is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action Issuer is taking or proposes to take with respect thereto.
(b) Issuer shall, so long as any of the Notes are
outstanding, deliver to the Trustee as soon as possible and in any event within
five days, forthwith upon Issuer becoming aware of any Default that has occurred
and is continuing, an Officers' Certificate specifying such Default and what
action Issuer is taking or proposes to take with respect thereto.
Section 4.04. TAXES.
Issuer shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
Section 4.05. STAY, EXTENSION AND USURY LAWS.
Issuer and each of the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Inden-
-50-
ture; and Issuer and each of the Guarantors (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
Section 4.06. CORPORATE EXISTENCE.
Subject to Article 5 hereof, Issuer shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of Issuer or any such Subsidiary
and (ii) the rights (charter and statutory), licenses and franchises of Issuer
and its Subsidiaries; PROVIDED, HOWEVER, that Issuer shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Issuer and its Subsidiaries, taken as a whole.
Section 4.07. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
If a Change of Control occurs, each Holder of Notes will have
the right to require Issuer to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Xxxxxx's Notes pursuant to the offer
described below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest thereon, if any, to the date of purchase (the "CHANGE OF CONTROL
PAYMENT").
Within 30 days following any Change of Control, Issuer shall
send, by first class mail, a notice to the Trustee and to each Holder at its
registered address. The notice shall contain all instructions and materials
necessary to enable such Holder to tender Notes pursuant to the Change of
Control Offer. Any Change of Control Offer shall be made to all Holders. The
notice, which shall govern the terms of the Change of Control Offer, shall
state: (1) that the Change of Control Offer is being made pursuant to this
Section 4.07; (2) the Change of Control Payment and the date on which Notes
tendered and accepted for payment shall be purchased, which date shall be at
least 30 days and no later than 60 days from the date such notice is mailed (the
"CHANGE OF CONTROL PAYMENT DATE"); (3) that any Note not tendered or accepted
for payment shall continue to accrete or accrue interest; (4) that, unless
Issuer defaults in making such payment, any Note accepted for payment pursuant
to the Change of Control Offer shall cease to accrete or accrue interest after
the Change of Control Payment Date; (5) that Holders electing to have a Note
purchased pursuant to the Change of Control Offer may only elect to have all of
such Note purchased and may not elect to have only a portion of such Note
purchased; (6) that Holders electing to have a Note purchased pursuant to any
Change of Control Offer shall be required to surrender the Note, with the
-51-
form entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to Issuer, a depository, if
appointed by Issuer, or the Paying Agent at the address specified in the notice
at least three days before the Change of Control Payment Date; (7) that Holders
shall be entitled to withdraw their election if Issuer, the depository or the
Paying Agent, as the case may be, receives, not later than the Change of Control
Payment Date, a notice setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that such
Xxxxxx is withdrawing his election to have such Note purchased; (8) that Notes
and portions of Notes purchased shall be in amounts of $1,000 or whole multiples
of $1,000, except that if all of the Notes of a Holder are to be purchased, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be purchased; and (9) that Holders whose Notes were purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by book-entry
transfer). Issuer shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent any
such rules or regulations conflict with this Section 4.07, Issuer will not be
deemed to have breached its obligations under this Indenture by virtue of
complying with such rules or regulations.
On the Change of Control Payment Date, Issuer shall, to the
extent lawful: (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer; (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered; and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being repurchased by
Issuer.
Prior to complying with any of the provisions of this Section
4.07, but in any event within 90 days following a Change of Control, Issuer will
either repay all outstanding Designated Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Designated Senior
Debt to permit the repurchase of Notes required by this Section 4.07. Issuer
will publicly announce the results of the Change of Control Offer as soon as
practicable after the Change of Control Payment Date.
The Paying Agent shall promptly mail to each Holder of Notes
so tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate pursuant to an Authentication Order and mail (or cause to
be transferred by book entry) to each Holder a new Note equal in principal
amount to any unrepurchased portion of the Notes surrendered, if any; PROVIDED
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. However, if the Change of Control Payment Date is on or after
an interest record date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the Person in whose name a Note is
registered at the close of
-52-
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Change of Control Offer.
Subject to the second succeeding paragraph, the provisions
described above that require Issuer to make a Change of Control Offer following
a Change of Control will be applicable regardless of whether or not any other
provisions of the Indenture are applicable.
Notwithstanding anything to the contrary in this Section 4.07,
Issuer shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 4.07 and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
Notwithstanding anything to the contrary in this Section 4.07,
Issuer shall not be required to make a Change of Control Offer, as provided
above, if, in connection with or in contemplation of any Change of Control, it
or a third party has made an offer to purchase (an "ALTERNATE OFFER") any and
all Notes validly tendered at a cash price equal to or higher than the Change of
Control Payment and has purchased all Notes properly tendered in accordance with
the terms of such Alternate Offer.
Section 4.08. ASSET SALES.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) Issuer (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of (except as a
result of any foreclosure or sale by any lenders);
(2) such fair market value is determined by Issuer's Board of
Directors and evidenced by a resolution of the Board of
Directors; and
(3) at least 75% of the consideration therefor received by Issuer
or such Restricted Subsidiary is in the form of cash or Cash
Equivalents or Related Business Assets. For purposes of this
provision, each of the following shall be deemed to be cash:
(a) any Indebtedness of Issuer or any Restricted
Subsidiary (other than Indebtedness that is by its terms
subordinated to the Notes or any Note Guarantee) that are
assumed by the transferee of any such assets; PROVIDED that
Issuer or such Restricted Subsidiary is released from such
Indebtedness; and
-53-
(b) any notes, securities or other obligations
received by Issuer or any such Restricted Subsidiary from such
transferee that are converted by Issuer or such Restricted
Subsidiary into cash within 90 days after the date of the
Asset Sale (to the extent of the cash received in that
conversion).
Within 365 days after the receipt of any Net Proceeds from an
Asset Sale, Issuer may apply such Net Proceeds at its option:
(1) to repay Senior Debt; and/or
(2) to make an investment in or expenditures for assets that
replace the assets that were the subject of the Asset Sale or
in assets (other than securities) that will be used or useful
in a Permitted Business or to make a Permitted Investment
(other than an Investment in Cash Equivalents or the Notes).
Pending the final application of any such Net Proceeds, Issuer may temporarily
reduce revolving credit borrowings or otherwise invest such Net Proceeds in any
manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that Issuer does not apply,
or decides not to apply, as provided in the preceding paragraph will constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10.0
million, Issuer will make an offer (an "ASSET SALE OFFER") to all Holders of
Notes and all holders of other Indebtedness that is PARI PASSU with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem such Indebtedness with the proceeds of sales of
assets to purchase the maximum principal amount of Notes and such other PARI
PASSU Indebtedness that may be purchased out of the Excess Proceeds (the "ASSET
SALE OFFER AMOUNT"). The offer price for Notes in any Asset Sale Offer will be
equal to 100% of the aggregate principal amount plus accrued and unpaid
interest, if any, to the date of purchase (the "ASSET SALE PAYMENT"), and will
be payable in cash. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, Issuer may use such Excess Proceeds for any purpose not otherwise
prohibited by this Indenture and such Excess Proceeds will no longer be subject
to the provisions of this Section 4.08. If the aggregate principal amount of
Notes and such other PARI PASSU Indebtedness tendered into such Asset Sale Offer
exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and
such other PARI PASSU Indebtedness to be purchased on a pro rata basis based
upon the principal amount or accreted value (as applicable) of the Notes and
such other Indebtedness. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
Issuer shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of the Notes as a result of an Asset Sale. To the extent the
provisions of any applicable securities laws or regulations conflict
-54-
with the provisions of this Section 4.08, Issuer will not be deemed to have
breached its obligations under this Indenture by virtue of complying with such
laws or regulations.
Upon the commencement of an Asset Sale Offer, Issuer shall
send, by first class mail, a notice to the Trustee and to each Holder at its
registered address. The notice shall contain all instructions and materials
necessary to enable such Holder to tender Notes pursuant to the Asset Sale
Offer. Any Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant to this
Section 4.08;
(2) the Asset Sale Offer Amount, the Asset Sale Payment and the
date on which Notes tendered and accepted for payment shall be
purchased, which date shall be at least 30 days and no later
than 60 days from the date such notice is mailed (the "ASSET
SALE PAYMENT DATE");
(3) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(4) that, unless Issuer defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall
cease to accrete or accrue interest after the Asset Sale
Payment Date;
(5) that Holders electing to have a Note purchased pursuant to the
Asset Sale Offer may only elect to have all of such Note
purchased and may not elect to have only a portion of such
Note purchased;
(6) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, or transfer by book-entry
transfer, to Issuer, a depository, if appointed by Issuer, or
the Paying Agent at the address specified in the notice at
least three days before the Asset Sale Payment Date;
(7) that Holders shall be entitled to withdraw their election if
Issuer, the Depository or the Paying Agent, as the case may
be, receives, not later than the Asset Sale Payment Date, a
notice setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a
statement that such Xxxxxx is withdrawing his election to have
such Note purchased;
(8) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Asset Sale Offer Amount, Issuer shall
select the Notes to be purchased on a PRO RATA basis (with
such adjustments as may be deemed appropri-
-55-
ate by Issuer so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(9) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On the Asset Sale Payment Date, Issuer shall, to the extent
lawful: (1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Asset Sale Offer; (2) deposit with the Paying Agent an amount
equal to the Asset Sale Payment in respect of all Notes or portions thereof so
tendered; and (3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate principal
amount of Notes or portions thereof being repurchased by Issuer. Issuer shall
publicly announce the results of the Asset Sale Offer on the Asset Sale Payment
Date.
The Paying Agent shall promptly mail to each Holder of Notes
so tendered the Asset Sale Payment for such Notes, and the Trustee shall
promptly authenticate pursuant to an Authentication Order and mail (or cause to
be transferred by book entry) to each Holder a new Note equal in principal
amount to any unrepurchased portion of the Notes surrendered, if any; PROVIDED
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. However, if the Asset Sale Payment Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Section 4.09. [Intentionally Omitted].
Section 4.10. RESTRICTED PAYMENTS.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution on account of Issuer's or any of its Restricted
Subsidiaries' Equity Interests or to holders of Issuer's or any of its
Restricted Subsidiaries' Equity Interests in their capacity as such
(other than dividends or other payments or distributions payable solely
in Equity Interests (other than Disqualified Stock) of Issuer or
dividends or other payments or distributions payable to Issuer or a
Restricted Subsidiary of Issuer);
(2) purchase, redeem or otherwise acquire or retire for
value any Equity Interests of Issuer or any Restricted Subsidiary of
Issuer (other than any such Equity Interests owned by Issuer or any
Restricted Subsidiary of Issuer);
-56-
(3) purchase, redeem, defease, prepay or otherwise
acquire or retire for value any Indebtedness of Issuer or any Guarantor
that is subordinated to the Notes or the Note Guarantees, except (x)
any payment of interest or principal at the Stated Maturity thereof,
(y) any payment made with Equity Interests (other than Disqualified
Stock) of Issuer and (z) any payment to Issuer or any of its Restricted
Subsidiaries;
(4) if the Senior Preferred Stock is exchanged into
Exchange Debentures pursuant to clause (9) of the next paragraph, make
any payment of cash interest on the Exchange Debentures; or
(5) make any Restricted Investment
(all such payments and other actions set forth in clauses (1) through (5) above
being collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of
and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; and
(2) Issuer would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio Exception; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by Issuer and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (4), (5), (6), (7),
(8), (9) or (10) of the next succeeding paragraph), is less than the
sum (the "BASKET"), without duplication, of
(a) 50% of the Consolidated Net Income of Issuer
for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the
date of this Indenture to the end of Issuer's most recently
ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit,
less 100% of such deficit), plus
(b) 100% of the aggregate net cash proceeds
received by Issuer since the Issue Date as a contribution to
its common equity capital or from the issue or sale of Equity
Interests of Issuer (other than Disqualified Stock) or from
the issue or sale of convertible or exchangeable Disqualified
Stock or convertible or exchangeable debt securities or
Indebtedness of Issuer that have been converted into or
exchanged for such Equity Interests (other than Equity
-57-
Interests, Disqualified Stock or debt securities or
Indebtedness sold to a Subsidiary of Issuer), plus
(c) to the extent not otherwise included in the
calculation of Consolidated Net Income for purposes of clause
(a) above, 100% of (x) an amount equal to any dividends,
repayment of loans, or advances with respect to, and (y) the
aggregate net proceeds (including the fair market value of
assets other than cash) received by Issuer or any of its
Restricted Subsidiaries upon the sale or other disposition of,
any Investment made by Issuer and its Restricted Subsidiaries
since the Issue Date; PROVIDED that the foregoing sum shall
not exceed, in the case of any investee, the aggregate amount
of Investments previously made by Issuer or any of its
Restricted Subsidiaries in such investee subsequent to the
Issue Date; plus
(d) to the extent not otherwise included in the
calculation of Consolidated Net Income for purposes of clause
(a) above, an amount equal to the sum of (x) the net reduction
in Investments in Unrestricted Subsidiaries of Issuer
resulting from dividends, repayments of loans or advances or
other transfers of assets, in each case to Issuer or any of
its Restricted Subsidiaries from Unrestricted Subsidiaries of
Issuer, and (y) the fair market value of the net assets of an
Unrestricted Subsidiary of Issuer at the time such
Unrestricted Subsidiary is redesignated as a Restricted
Subsidiary multiplied by Issuer's proportionate interest in
such Subsidiary; PROVIDED that the foregoing sum shall not
exceed, in the case of any Unrestricted Subsidiary, the
aggregate amount of Investments previously made by Issuer or
any of its Restricted Subsidiaries in such Unrestricted
Subsidiary subsequent to the Issue Date.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture;
(2) the redemption, repurchase, retirement, defeasance,
prepayment or other acquisition of any subordinated Indebtedness of
Issuer or any Guarantor or of any Equity Interests of Issuer or any
Restricted Subsidiary in exchange for, or out of the net cash proceeds
of the substantially concurrent sale (other than to a Subsidiary of
Issuer) of, Equity Interests of Issuer (other than Disqualified Stock);
PROVIDED that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement, defeasance,
prepayment or other acquisition shall not increase the Basket;
-58-
(3) the defeasance, redemption, repurchase or other
prepayment or acquisition of subordinated Indebtedness of Issuer or any
Guarantor with the net cash proceeds from an incurrence of, or in
exchange for, Permitted Refinancing Indebtedness; PROVIDED that the
amount of any such net cash proceeds that are utilized for any such
defeasance, redemption, repurchase or other prepayment or acquisition
shall not increase the Basket;
(4) the payment of any dividend by a Restricted
Subsidiary of Issuer to the holders of all of its common Equity
Interests on a pro rata basis;
(5) the repurchase of Equity Interests deemed to occur
upon the exercise of stock options if such Equity Interests represent a
portion of the exercise price thereof;
(6) the repurchase, redemption or other acquisition for
value of any Equity Interests of Issuer held by any employee or
director of Issuer or any of its Restricted Subsidiaries pursuant to
any equity subscription agreement, stock option agreement or similar
agreement in connection with the termination of employment, death or
disability of any member of management in an aggregate amount not to
exceed $10.0 million from and after the date of this Indenture;
(7) the redemption or repurchase by Issuer or any of its
Restricted Subsidiaries of Equity Interests, stock equivalents or stock
options from an employee covered by Issuer or any of its Restricted
Subsidiaries by an insurance policy using the proceeds from the
insurance policy covering such employee;
(8) for the avoidance of doubt only, payments pursuant to
the Management Services Agreement;
(9) following the third anniversary of the Issue Date,
the exchange of all (and not less than all) of the Senior Preferred
Stock into Exchange Debentures; and
(10) other Restricted Payments pursuant to this clause
(10) not to exceed $10.0 million in the aggregate from and after the
Issue Date.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by Issuer or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
Section 4.10 shall be determined by Issuer, which determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
banking firm of national standing if the fair market value exceeds $5 million.
Not later than the date of making any Restricted Payment in excess of $5
million, Issuer shall deliver to the Trustee an Officers' Certificate stating
that such Restricted Payment is permitted and setting forth the
-59-
basis upon which the calculations required by this Section 4.10 were computed,
together with a copy of any fairness opinion or appraisal required by this
Indenture.
Section 4.11. Incurrence of Indebtedness and Issuance of Preferred Stock.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, incur any Indebtedness (including Acquired Debt), and Issuer
will not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any Preferred Stock; PROVIDED that Issuer, any Guarantor
or any Canadian Subsidiary may incur Indebtedness (including Acquired Debt), and
Issuer may issue Disqualified Stock, if the Fixed Charge Coverage Ratio for
Issuer's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period (this proviso, the
"FIXED CHARGE COVERAGE RATIO EXCEPTION").
The preceding paragraph will not prohibit the incurrence of
any of the following (collectively, "PERMITTED DEBT"):
(1) Indebtedness under the Senior Credit Facility (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of Issuer and its Restricted Subsidiaries
thereunder) in an aggregate principal amount outstanding pursuant to
this clause (1) (including amounts outstanding on the date of this
Indenture) not to exceed the greater of (x) $310.0 million LESS the
aggregate amount of all Net Proceeds of Asset Sales applied by Issuer
or any of its Subsidiaries since the date of this Indenture to repay
Indebtedness under the Senior Credit Facility pursuant to Section 4.08
hereof and (y) the sum of 85% of the book value of accounts receivable
and 65% of the book value of inventory of Issuer and its Restricted
Subsidiaries determined on a consolidated basis in accordance with
GAAP; PROVIDED that the maximum amount permitted to be outstanding
pursuant to this clause (1) shall not be deemed to limit additional
Indebtedness under the Senior Credit Facility that is permitted to be
incurred pursuant to any of the other provisions of this covenant;
(2) the Notes issued on the Issue Date, Existing
Indebtedness (other than Indebtedness under the Senior Credit
Facility), the Exchange Notes and the Note Guarantees thereof and, for
the avoidance of doubt only, the Existing Preferred Stock (including
any subsequent increase in the liquidation preference from amounts
payable as dividends thereon that are not paid in cash on the scheduled
payment dates);
-60-
(3) Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of development,
construction, installation or improvement of property, plant or
equipment used in the business of Issuer or such Restricted Subsidiary,
and refinancings thereof, in an aggregate principal amount not to
exceed $15.0 million at any time outstanding pursuant to this clause
(3);
(4) Permitted Refinancing Indebtedness in respect of
Indebtedness that was permitted by this Indenture to be incurred under
the Fixed Charge Coverage Ratio Exception or clause (2) or (10) of this
paragraph or this clause (4);
(5) Indebtedness owed by Issuer or any of its Restricted
Subsidiaries to Issuer or any of its Restricted Subsidiaries; PROVIDED
that
(a) any such Indebtedness owed by Issuer shall
be expressly subordinated to the prior payment in full in cash
of all Obligations with respect to the Notes, and any such
Indebtedness owed by any Guarantor shall be expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the Note Guarantee of such
Guarantor; and
(b) if such Indebtedness is held by a Person
other than Issuer or any of its Restricted Subsidiaries,
Issuer or such Restricted Subsidiary shall be deemed to have
incurred Indebtedness not permitted by this clause (5);
(6) Hedging Obligations that are incurred for the purpose
of fixing or hedging (x) interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding or (y) foreign currency exchange rate risk;
(7) (x) the Guarantee by Issuer or any Guarantor of
Indebtedness of Issuer or a Guarantor, (y) the Guarantee by any
Canadian Subsidiary of Indebtedness of any other Canadian Subsidiary
and (z) the Guarantee by any Restricted Subsidiary that is not a
Guarantor or a Canadian Subsidiary of Indebtedness of any other
Restricted Subsidiary that is not a Guarantor; PROVIDED that, in each
case, the Indebtedness being Guaranteed is permitted to be incurred by
another provision of this Section 4.11;
(8) Indebtedness incurred in respect of workers'
compensation claims, self-insurance obligations, bankers' acceptances,
letters of credit (not supporting Indebtedness for borrowed money),
performance, surety and similar bonds and completion guarantees or
similar obligations provided by Issuer or a Guarantor in the ordinary
course of business;
-61-
(9) the agreements of Issuer or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, incurred or assumed in connection with the
disposition of any business or assets of Issuer or any Restricted
Subsidiary or Capital Stock of a Restricted Subsidiary; PROVIDED that
the maximum aggregate liability in respect of all such obligations
outstanding under this clause (9) shall at no time exceed the gross
proceeds actually received by Issuer and its Restricted Subsidiaries in
connection with such dispositions;
(10) Acquired Debt; PROVIDED that, with respect to any
Acquired Debt incurred and outstanding pursuant to this clause (10),
(x) it shall have been incurred prior to the time that the debtor
thereunder was acquired by or merged into Issuer or any of its
Subsidiaries, or prior to the time that the related asset was acquired
by Issuer or any of its Subsidiaries, and was not incurred in
connection with, or in contemplation of, such acquisition or merger,
and (y) either (1) the aggregate principal amount of such Acquired Debt
shall not exceed $5.0 million outstanding at any time or (2)
immediately after giving effect to such transaction, Issuer shall be
able to incur an additional $1.00 of Indebtedness under the Fixed
Charge Coverage Ratio Exception;
(11) Indebtedness secured by a mortgage or deed of trust
on real property acquired by Issuer or any of its Restricted
Subsidiaries for use as a new corporate headquarters, and refinancings
thereof, in an aggregate amount not to exceed $15.0 million at any time
outstanding pursuant to this clause (11);
(12) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds;
(13) Indebtedness incurred by Foreign Subsidiaries in an
aggregate principal amount at any time outstanding not to exceed $5.0
million pursuant to this clause (13); and
(14) additional Indebtedness in an aggregate principal
amount not to exceed $15.0 million at any time outstanding pursuant to
this clause (14); PROVIDED that, to avoid any doubt, all or a portion
of the Indebtedness permitted to be incurred under this clause (14)
may, at the option of Issuer, be incurred under the Senior Credit
Facility.
For purposes of determining compliance with this Section 4.11,
in the event that an item of Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (1) through (14) above, or
is entitled to be incurred pursuant to the Fixed Charge Coverage Ratio
Exception, Issuer shall, in its sole discretion, classify such item of
Indebtedness in any manner that complies with this Section 4.11 (PROVIDED that
all Indebtedness under the Senior Credit Facility outstanding on the date of
this Indenture shall be
-62-
deemed to have been incurred pursuant to clause (1) hereof) and may later
reclassify such Indebtedness into any one or more of the categories of Permitted
Debt described in clauses (1) and (3) through (14) above (PROVIDED that at the
time of reclassification it meets the criteria in such category or categories).
Section 4.12. NO SENIOR SUBORDINATED DEBT.
Issuer will not incur any Indebtedness that is, or purports to
be, contractually subordinated or junior in right of payment to any Senior Debt
of Issuer and senior in any respect in right of payment to the Notes. No
Guarantor will incur any Indebtedness that is, or purports to be, contractually
subordinated or junior in right of payment to any Senior Debt of such Guarantor
and senior in any respect in right of payment to such Guarantor's Note
Guarantee.
Section 4.13. LIENS.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness, Attributable Debt or trade
payables on any asset now owned or hereafter acquired, except Permitted Liens,
unless all payments due under this Indenture and the Notes are secured on an
equal and ratable basis with the obligation so secured until such time as such
obligation is no longer secured by a Lien; PROVIDED that if such obligation is
by its terms expressly subordinated to the Notes or any Note Guarantee, the Lien
securing such obligation shall be contractually subordinate and junior to the
Lien securing the Notes and the Note Guarantees with the same relative priority
as such subordinate or junior obligation shall have with respect to the Notes
and the Note Guarantees.
Section 4.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(1) pay dividends or make any other distributions on its
Capital Stock or with respect to any other interest or participation
in, or measured by, its profits, to Issuer or any Guarantor, or pay any
indebtedness owed to Issuer or any Guarantor;
(2) make loans or advances to Issuer or any Guarantor; or
(3) transfer any of its assets to Issuer or any
Guarantor.
-63-
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(1) any Senior Debt or Existing Indebtedness, and any
amendments or refinancings thereof; PROVIDED that such Senior Debt, and
any amendments or refinancings of Senior Debt or Existing Indebtedness,
are no more restrictive, taken as a whole, with respect to such
dividend and other restrictions than those contained in the Senior
Credit Facility or such Existing Indebtedness, as in effect on the date
of this Indenture;
(2) this Indenture and the Notes and any Indebtedness
that is PARI PASSU to the Notes, and any amendments or refinancings
thereof; PROVIDED that such amendments or refinancings are not
materially more restrictive taken as a whole with respect to such
provisions than those contained in this Indenture and the Notes on the
date hereof;
(3) the Senior Preferred Stock and the Exchange
Debentures issuable in exchange for the Senior Preferred Stock, in each
case, as in effect on the date of this Indenture, and any amendments or
refinancings thereof; PROVIDED that such amendments or refinancings are
not materially more restrictive taken as a whole with respect to such
provisions than those contained in this Indenture and the Notes on the
date hereof;
(4) statutory or contractual provisions requiring PRO
RATA treatment of holders of Capital Stock of Restricted Subsidiaries
held, in whole or in part, by Persons other than Issuer or any
Restricted Subsidiary;
(5) applicable law;
(6) any instrument governing Indebtedness or Capital
Stock of a Person acquired by Issuer 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), which encumbrance or restriction is
not applicable to any Person, or the assets of any Person, other than
the Person, or the assets of the Person, so acquired; PROVIDED that, in
the case of Indebtedness, such Indebtedness was permitted by the terms
of this Indenture to be incurred;
(7) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(8) capital leases or purchase money obligations for
assets acquired or leased in the ordinary course of business that
impose restrictions on the assets so acquired of the nature described
in clause (3) of the preceding paragraph;
-64-
(9) any agreement for the sale or other disposition of
any assets, including Capital Stock of a Restricted Subsidiary, that
restricts the transfer of such assets, or in the case of the sale of
Capital Stock of such Restricted Subsidiary, distributions by such
Restricted Subsidiary, pending its sale or other disposition;
(10) Permitted Refinancing Indebtedness; PROVIDED that
such dividend and other restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more
restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;
(11) Liens securing Indebtedness otherwise permitted to be
incurred pursuant to Section 4.13 hereof that limit the right of Issuer
or any of its Restricted Subsidiaries to dispose of the assets subject
to such Lien;
(12) provisions with respect to the disposition or
distribution of assets in joint venture agreements and other similar
agreements entered into in the ordinary course of business;
(13) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business;
(14) any agreement relating to a sale and leaseback
transaction or Capital Lease Obligation, in each case, otherwise
permitted by this Indenture, but only on the assets subject to such
transaction or lease and only to the extent that such restrictions or
encumbrances are customary with respect to a sale and leaseback
transaction or capital lease; and
(15) customary provisions in intellectual property
agreements, licenses and leases and other similar agreements entered
into in the ordinary course of business.
Section 4.15. TRANSACTIONS WITH AFFILIATES.
Issuer will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its assets to, or purchase any assets from, or enter into or
make or amend any transaction, contract, agreement, understanding, loan, advance
or guarantee with, or for the benefit of, any Affiliate (each, an "AFFILIATE
TRANSACTION"), unless:
(1) such Affiliate Transaction is on terms that are no
less favorable to Issuer or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by
Issuer or such Restricted Subsidiary with an unrelated Person; and
-65-
(2) Issuer delivers to the Trustee:
(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $1.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
Section 4.15 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors, if there are any such disinterested
members; and
(b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, or in excess of $1.0
million and not approved by a majority of the disinterested
members of the Board of Directors of Issuer, an opinion as to
the fairness to Issuer of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
The following items shall not be deemed to be Affiliate
Transactions and, therefore, will not be subject to the provisions of the prior
paragraph:
(1) transactions between or among Issuer and/or one or
more of its Restricted Subsidiaries;
(2) Restricted Payments and Permitted Investments that
are not prohibited by Section 4.10 hereof;
(3) payment of compensation, bonuses, severance awards,
advances, grants, reimbursement of expenses and indemnity to officers,
directors and employees consistent with market practices for services
actually rendered to Issuer and its Restricted Subsidiaries; and
(4) (x) so long as no Default has occurred and is
continuing, (i) payment of annual management fees to the Sponsors or
any of their Affiliates in an aggregate amount not to exceed, during
any consecutive 12-month period, $3.12 million plus 1.6% of their
cumulative cash equity investment in Issuer made after the date of this
Indenture at the time of such payment (provided that unpaid amounts may
be paid in any subsequent period so long as no Default has occurred and
is continuing) and (ii) payment of fees to the Sponsors or any of their
Affiliates for financial advisory and investment banking services
rendered to Issuer and its Restricted Subsidiaries in connection with
acquisitions, securities offerings and other financings and similar
significant corporate transactions in customary and reasonable amounts
for such transactions; and (y) reimbursement of reasonable
out-of-pocket expenses incurred by the
-66-
Sponsors or any of their Affiliates in connection with such services;
PROVIDED that the foregoing payments and reimbursements are
subordinated to the Notes to the same extent as the Notes are
subordinated to Designated Senior Debt; PROVIDED, FURTHER, that if any
such Default prevents the payment of any such fees, Issuer may pay such
deferred fees at the time such Default is cured or waived.
Section 4.16. ADDITIONAL NOTE GUARANTEES.
If Issuer or any of its Restricted Subsidiaries transfers,
acquires or creates another Restricted Subsidiary (other than any Foreign
Subsidiary) after the date of this Indenture, then that newly acquired or
created Restricted Subsidiary must become a Guarantor and shall, within ten
business days of the date on which it was acquired or created, execute and
deliver to the Trustee a supplemental indenture in form reasonably satisfactory
to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of Issuer's obligations under the Notes and this
Indenture on the terms set forth in this Indenture until released in accordance
with the terms of this Indenture. Thereafter, such Restricted Subsidiary shall
be a Guarantor for all purposes of this Indenture.
Notwithstanding the preceding paragraph, any Note Guarantee
will provide by its terms that it will be automatically and unconditionally
released and discharged under the circumstances described under Section 11.06
hereof. The form of the Note Guarantee is attached hereto as EXHIBIT E.
Section 4.17. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all
outstanding Investments owned by Issuer and its Restricted Subsidiaries in the
Subsidiary so designated will be deemed to be an Investment made as of the time
of such designation and will reduce the amount available for Restricted Payments
under the first paragraph of Section 4.10 hereof or for Permitted Investments,
as applicable. All such outstanding Investments will be valued at their fair
market value at the time of such designation. The designation will be permitted
only if such Investment would not be prohibited at that time under Section 4.10
hereof and if such Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted
Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a
Default.
Section 4.18. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
Issuer will not permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee any other Indebtedness of Issuer unless
such Restricted Subsidiary simultaneously executes and delivers a Note Guarantee
in the manner set forth in Section 4.16 hereof,
-67-
which Note Guarantee shall be senior to or PARI PASSU with such Restricted
Subsidiary's Guarantee of such other Indebtedness, unless such other
Indebtedness is Senior Debt, in which case such Note Guarantee may be
subordinated to the Guarantee of such Senior Debt to the same extent as the
Notes are subordinated to such Senior Debt.
Section 4.19. BUSINESS ACTIVITIES.
Issuer will not, and will not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to the extent
that any such business would not be material to Issuer and its Restricted
Subsidiaries, taken as a whole.
Section 4.20. REPORTS.
(a) Whether or not required by the rules and regulations
of the SEC, so long as any Notes are outstanding, Issuer shall furnish to the
Holders of Notes and make available to beneficial owners of Notes, within the
time periods specified in the SEC's rules and regulations: (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if Issuer were required to file such Forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only, a
report on the annual financial statements by Issuer's certified independent
accounts; and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if Issuer were required to file such reports. In addition,
whether or not required by the SEC, Issuer shall, following the consummation of
the Exchange Offer pursuant to the Registration Rights Agreement, file a copy of
all of the information and reports referred to in clauses (i) and (ii) above
with the SEC for public availability within the time periods specified in the
SEC's rules and regulations (unless the SEC will not accept such a filing) and
make such information available to securities analysts and prospective investors
upon request.
(b) In addition, for so long as any Restricted Global
Notes or Restricted Definitive Notes remain outstanding, Issuer and the
Guarantors shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. Any materials
required to be furnished to Holders of Notes by this Section 4.20 shall discuss,
in reasonable detail, either on the face of the financial statements included
therein or in the footnotes thereto and in any "Management's Discussion and
Analysis of Financial Condition and Results of Operations," the financial
condition and results of operations of Issuer and its Restricted Subsidiaries
separate from the financial condition and results of operations of the
Unrestricted Subsidiaries of Issuer.
(c) Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained
-68-
therein, including Issuer's compliance with any of its covenants hereunder (as
to which the Trustee is entitled to rely exclusively on Officers' Certificates).
ARTICLE 5.
SUCCESSORS
Section 5.01. MERGER, CONSOLIDATION OR SALE OF ASSETS.
Issuer may not, directly or indirectly: (i) consolidate or
merge with or into another Person (whether or not Issuer is the surviving
corporation); or (ii) sell, assign, lease, transfer, convey or otherwise dispose
of all or substantially all of Issuer's assets (determined on a consolidated
basis for Issuer and its Restricted Subsidiaries), in one or more related
transactions, to another Person, unless:
(1) either: (a) Issuer is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger
(if other than Issuer) or to which such sale, assignment,
transfer, conveyance or other disposition shall have been made
is a corporation or limited liability company organized or
existing under the laws of the United States, any State
thereof or the District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than Issuer) or the Person to which such
sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of Issuer
under the Notes, this Indenture and the Registration Rights
Agreement pursuant to agreements reasonably satisfactory to
the Trustee;
(3) immediately after such transaction no Default exists
(including, without limitation, after giving effect to any
Indebtedness or Liens incurred, assumed or granted in
connection with or in respect of such transaction); and
(4) Issuer or the Person formed by or surviving any such
consolidation or merger (if other than Issuer) will, on the
date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had
occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio
Exception.
Upon any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of Issuer's assets, in one or more
related transactions, in compliance with the provisions of this Section 5.01,
Issuer will be released from its obligations under the Notes
-69-
and this Indenture, except with respect to any obligations that arise from, or
are related to, such transaction.
This Section 5.01 will not apply to a sale, assignment,
transfer, conveyance or other disposition of assets between or among Issuer and
any of its Wholly Owned Restricted Subsidiaries or any Guarantor.
Section 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of Issuer in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which Issuer is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Issuer" shall
refer instead to the successor corporation and not to Issuer), and may exercise
every right and power of Issuer under this Indenture with the same effect as if
such successor Person had been named as Issuer herein.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. EVENTS OF DEFAULT.
Each of the following is an "EVENT OF DEFAULT":
(a) default for a continued period of 30 days in the
payment when due of interest on the Notes, whether or not prohibited by
the subordination provisions of this Indenture;
(b) default in payment when due of the principal of or
premium, if any, on the Notes, whether or not prohibited by the
subordination provisions of this Indenture;
(c) Issuer fails to observe or perform any other covenant
or other agreement in this Indenture or the Notes and such failure
continues for a period of thirty (30) days in the case of a default
with respect to Section 4.07, 4.08, 4.10, 4.11, 4.13, 4.15 or 5.01 or
sixty (60) days in the case of a default with respect to any other
covenant or agreement;
(d) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by Issuer or any of its Restricted
Subsidiaries (or the payment of
-70-
which is Guaranteed by Issuer or any of its Restricted Subsidiaries)
whether such Indebtedness or Guarantee now exists, or is created after
the date of this Indenture, if that default
(i) is caused by a failure to pay principal of
or premium, if any, or interest on such
Indebtedness at final Stated Maturity prior to the
expiration of the grace period provided in such
Indebtedness on the date of such default (a
"PAYMENT DEFAULT"); or
(ii) results in the acceleration of such
Indebtedness prior to its express maturity;
and, in each case, the principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $17.0 million or more;
(e) failure by Issuer or any of its Restricted
Subsidiaries to pay final judgments aggregating at any one time in
excess of $17.0 million, which judgments are not paid, discharged or
stayed for a period of 60 days;
(f) except as permitted by this Indenture, any
Note Guarantee of any Guarantor that is a Significant Subsidiary shall
be held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect, or any
Guarantor, or any Person acting on behalf of any Guarantor, shall deny
or disaffirm its obligations under its Note Guarantee;
(g) Issuer or any of its Significant
Subsidiaries pursuant to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order
for relief against it in an involuntary case,
(iii) consents to the appointment of a
custodian of it or for all or substantially all
of its property,
(iv) makes a general assignment for the
benefit of its creditors, or
(v) generally is not paying its debts
as they become due; or
(h) a court of competent jurisdiction enters an
order or decree under any Bankruptcy Law that:
-71-
(i) is for relief against Issuer or any of its
Significant Subsidiaries;
(ii) appoints a custodian of Issuer or any of its
Significant Subsidiaries or for all or substantially all of the
property of Issuer or any of its Significant Subsidiaries; or
(iii) orders the liquidation of Issuer or any of
its Significant Subsidiaries;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02. ACCELERATION.
In the case of an Event of Default arising from either Section
6.01(g) or 6.01(h) hereof, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be due and payable immediately; PROVIDED that if there are any amounts
outstanding under the Senior Credit Facility, such amounts shall become
immediately due and payable upon the first to occur of (x) an acceleration under
the Senior Credit Facility and (y) five (5) business days after receipt by
Issuer and the representative under the Senior Credit Facility of such
acceleration notice but only if such Event of Default is then continuing.
At any time after a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee, the Holders of a majority in aggregate principal amount of the
Notes outstanding, by written notice to Issuer and the Trustee, may rescind and
annul such declaration and its consequences, on behalf of all Holders of Notes,
if:
(a) Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee
under Section 7.07 and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, and
(ii) to the extent that payment of such interest is
lawful, interest upon overdue interest and overdue principal,
which has become due otherwise than by such declaration of
acceleration at the rate borne by the Notes;
(b) all Events of Default, other than the non-payment of
principal of or interest on Notes which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 6.04;
-72-
(c) the rescission would not conflict with any judgment or
decree; and
(d) in the event of the cure or waiver of an Event of Default
described in Section 6.01(g) or 6.01(h), the Trustee has received an
Officers' Certificate that such Event of Default has been cured or
waived.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
may, subject to Article 10, pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. WAIVER OF PAST DEFAULTS.
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 past or existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes. Upon
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. Holders may not enforce this Indenture or the
Notes, however, except as provided in this Indenture. In addition, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
-73-
Section 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if: (a) the Holder of a Note gives to the Trustee
written notice of a continuing Event of Default; (b) the Holders of at least 25%
in principal amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes
offer and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense; (d) the Trustee does not comply
with the request within 60 days after receipt of the request and the offer and,
if requested, the provision of indemnity; and (e) during such 60-day period the
Holders of a majority in principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture and
subject to Article 10 and Section 11.02, the right of any Holder of a Note to
receive payment of principal, premium, if any, and interest on the Note, on or
after the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against Issuer for the whole amount
of principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to Issuer
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in
-74-
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it
shall, subject to Article 10, pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium, if any and interest,
respectively; and
THIRD: to Issuer or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in 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
-75-
does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant
to Section 6.07 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in its exercise,
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and
no others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which 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) The Trustee may not be relieved from liabilities for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
-76-
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
the paragraphs of this Section 7.01.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with Issuer.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from Issuer shall be
sufficient if signed by an Officer of Issuer.
(f) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any liability. The Trustee
shall be under no obligation to exercise any of its rights or powers under this
Indenture at the request or direction of any of the Holders unless such Holders
shall have offered to the Trustee security or indemnity satisfactory to the
Trustee against any loss, liability or expense that might be incurred by it in
compliance with such request or direction.
(g) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any document, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
-77-
books, records and Issuer's premises, personally or by agent or attorney at the
sole cost of Issuer, and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation.
(h) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(i) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
Section 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with Issuer or any
Affiliate of Issuer with the same rights it would have if it were not Trustee.
However, in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for Issuer's use of the proceeds from the Notes or any
money paid to Issuer or upon Issuer's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
-78-
Section 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and
if it is actually known to a Responsible Officer of the Trustee, the Trustee
shall mail to Holders of Notes at their respective addresses as they appear on
the register maintained by the Registrar a notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default relating to the payment of principal or interest on any Note, the
Trustee may withhold the notice if it determines, in good faith, that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each January 15 beginning with the
January 15 following the date of this Indenture, and for so long as Notes
remain outstanding, the Trustee shall mail to the Holders of the Notes a
brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within
the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The
Trustee shall also transmit by mail all reports as required by TIA Section
313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to Issuer and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). Issuer shall promptly notify the Trustee when the Notes are listed on
any stock exchange and of any delisting thereof.
Section 7.07. COMPENSATION AND INDEMNITY.
Issuer shall pay to the Trustee from time to time compensation
for its acceptance of this Indenture and services as Issuer and the Trustee
shall from time to time agree in writing. The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust. Issuer
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the compensation,
disbursements and expenses of the Trustee's agents and counsel.
Issuer shall indemnify the Trustee or any predecessor Trustee
against any and all losses, damages, claims, liabilities or expenses incurred by
it including taxes (other than taxes based upon, measured by or determined by
the income of the Trustee) arising out of or in connection with the acceptance
or administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against Issuer (including this Section
7.07) and defending itself against any claim (whether asserted by Issuer or any
Holder or any other person) or liability in connection with the acceptance,
exercise or performance of any of its powers or duties hereunder, except to the
extent any such loss, damage, claim, liability or
-79-
expense may be attributable to its negligence or bad faith. The Trustee shall
notify Issuer promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify Issuer shall not relieve Issuer of its obligations
hereunder, except to the extent that Issuer is actually prejudiced thereby.
Issuer shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and Issuer shall pay the reasonable fees
and expenses of such counsel. Issuer need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of Issuer under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
To secure Issuer's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying Issuer. The Holders of
Notes of a majority in principal amount of the then outstanding Notes may remove
the Trustee by so notifying the Trustee and Issuer in writing. Issuer may remove
the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b)
the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law; (c) a custodian or
public officer takes charge of the Trustee or its property; or (d) the Trustee
becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, Issuer shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by Issuer.
-80-
If a successor Xxxxxxx does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, Issuer,
or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee, at the expense of Issuer.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to Issuer. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, Issuer's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
Section 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies
the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is
subject to TIA Section 310(b).
Section 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
-81-
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE; DISCHARGE
Section 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
Issuer may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes and
Note Guarantees upon compliance with the conditions set forth below in this
Article 8.
Section 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon Issuer's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, Issuer and the Guarantors, respectively shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from its obligations with respect to all
outstanding Notes and all obligations of the Guarantors be deemed to have been
discharged with respect to their Note Guarantees on the date the conditions set
forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose,
Legal Defeasance means that Issuer shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Notes and this
Indenture and the Guarantors shall be deemed to have satisfied all of their
obligations under the Note Guarantees and this Indenture (and the Trustee, on
demand of and at the expense of Issuer, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Notes to receive,
solely from the trust fund described in Section 8.04 hereof, and as
more fully set forth in such Section 8.04, payments in respect of the
principal of, premium, if any, and interest on such Notes when such
payments are due;
(b) Issuer's obligations with respect to such Notes under
Article 2 and Section 4.02 hereof;
(c) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and Issuer's obligations in connection therewith;
and
(d) this Article 8.
-82-
Subject to compliance with this Article Eight, Issuer may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 hereof.
Section 8.03. COVENANT DEFEASANCE.
Upon Issuer's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, Issuer and the Guarantors shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from their respective obligations under the covenants contained in Sections
4.03, 4.04, 4.07, 4.08, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18,
4.19, 4.20 and clauses (3) and (4) of Section 5.01 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
Issuer and the Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01 hereof,
but, except as specified above, the remainder of this Indenture and such Notes
shall be unaffected thereby. In addition, upon Issuer's exercise under Section
8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(e) hereof shall not constitute Events of Default.
Section 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) Issuer must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Notes, cash in United
States dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the outstanding
Notes on the Stated Maturity or on the applicable redemption date, as
the case may be, and Issuer must specify whether the Notes are being
defeased to maturity or to a particular redemption date;
-83-
(b) in the case of an election under Section 8.02 hereof,
Issuer shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee opining that (i)
Issuer has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of
Counsel shall opine that, the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.03 hereof,
Issuer shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee opining that the
Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default shall have occurred and be continuing either:
(a) on the date of such deposit (other than a Default resulting from
the borrowing of funds to be applied to such deposit); or (b) in the
case of Legal Defeasance, insofar as Events of Default from bankruptcy
or insolvency events are concerned, at any time in the period ending on
the 91st day after the date of deposit;
(e) Issuer must have delivered to the Trustee an Opinion of
Counsel to the effect that such Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a default
under, any material agreement or instrument (other than this Indenture)
to which Issuer or any of its Restricted Subsidiaries is a party or by
which Issuer or any of its Restricted Subsidiaries is bound;
(f) Issuer must have delivered to the Trustee an Opinion of
Counsel to the effect that, assuming that no Holder is an "insider," as
that term is defined in the Bankruptcy Code, after the 91st day
following the deposit, the trust funds will not be subject to avoidance
as a preference under Section 547 of the Bankruptcy Code;
(g) Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by Issuer with the
intent of defeating, hindering, delaying or defrauding creditors of
Issuer or others; and
(h) Issuer must have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent relating to the Legal
Defeasance or the Covenant Defeasance contained in (b), (c), (d), (e)
and (f) have been complied with.
-84-
Section 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including Issuer acting as Paying
Agent) as the Trustee may determine, to the Holders of such Notes of all sums
due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
Issuer shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to Issuer from time to time upon the request of
Issuer any money or non-callable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(b) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. REPAYMENT TO ISSUER.
Any money deposited with the Trustee or any Paying Agent, or
then held by Issuer, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to Issuer on its request or (if then held by Issuer) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as a secured
creditor, look only to Issuer for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of Issuer as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of Issuer cause to be published once, in THE
NEW YORK TIMES
and THE WALL STREET JOURNAL (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to Issuer.
-85-
Section 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then Issuer's obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; PROVIDED, HOWEVER, that, if Issuer makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, Issuer shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
Section 8.08. DISCHARGE.
This Indenture will be discharged and will cease to be of
further effect (except as to surviving rights of registration of transfer or
exchange of the Notes, as expressly provided for in this Indenture) as to all
outstanding Notes when (a) either (i) all Notes theretofore authenticated and
delivered (except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has theretofore been deposited in trust
or segregated and held in trust by Issuer and thereafter repaid to Issuer or
discharged from such trust) have been delivered to the Trustee for cancellation
or (ii) all Notes not theretofore delivered to the Trustee for cancellation have
become due and payable and Issuer has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire Indebtedness on the Notes not theretofore delivered to the Trustee
for cancellation, for principal of, premium, if any, and interest on the Notes
to the date of deposit together with irrevocable instructions from Issuer
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be; (b) Issuer has paid all other sums payable under
this Indenture by Issuer; and (c) Issuer has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and discharge of
this Indenture have been complied with; PROVIDED, HOWEVER, that such counsel may
rely, as to matters of fact, on a certificate or certificates of officers of
Issuer.
-86-
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 hereof, Issuer and the Trustee
may (subject to Section 10.14 hereof) amend or supplement this Indenture or the
Notes without notice to or the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(c) to provide for the assumption of the obligations of Issuer
or any Guarantor to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all assets in accordance
with Article 5 or Section 11.05;
(d) to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely
affect the legal rights hereunder of any Holder;
(e) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(f) to make any change in Article 10 hereof that would limit
or terminate the benefits available to any holder of Senior Debt (or
any Representative) under this Indenture;
(g) to add additional Note Guarantees;
(h) to secure the Notes;
(i) to add to the covenants of Issuer for the benefit of the
Holders or to surrender any right or power herein conferred upon
Issuer;
(j) to comply with the procedures of the Trustee, The
Depository Trust Company or other applicable entity with respect to the
provisions of this Indenture and the Notes relating to transfers of the
Notes or to provide for the issuance of the Exchange Notes, which shall
have terms substantially identical in all material respects to the
Notes (except that the transfer restrictions contained in the Notes
shall be modified or eliminated, as appropriate), and which shall be
treated, together with any outstanding Notes, as a single issue of
securities; or
-87-
(k) to change the name or title of the Notes and make any
non-substantive conforming changes related thereto.
Upon the request of Issuer accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of any of the documents requested by
it pursuant to Section 7.02(b) hereof, the Trustee shall join with Issuer and
the Guarantors in the execution of such amended or supplemental Indenture and to
make any further appropriate agreements and stipulations that may be therein
contained, unless such amended or supplemental Indenture directly affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
Section 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02 and in Section
10.14, Issuer and the Trustee may amend or supplement this Indenture or the
Notes and/or any Note Guarantees may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the Notes then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, tender offer or exchange offer for,
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default in the payment of the principal of,
premium, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
of this Indenture, the Notes or the Note Guarantees may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a purchase of, tender
offer or exchange offer for, Notes). Section 2.08 hereof shall determine which
Notes are considered to be "outstanding" for purposes of this Section 9.02.
Upon the request of Issuer accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of any document requested by it pursuant to Section 7.02(b) hereof,
the Trustee shall join with Issuer and the Guarantors in the execution of such
amended or supplemental Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, unless such amended or
supplemental Indenture directly affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
-88-
After an amendment or waiver under this Section 9.02 becomes
effective, Issuer shall mail to the Holders of Notes affected thereby a notice
briefly describing the amendment or waiver. Any failure of Issuer to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental Indenture or waiver. Subject to
Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding voting as a single class may waive
compliance by Issuer and/or the Guarantors with any provision of this Indenture,
the Notes or the Note Guarantees. However, without the consent of each Holder
affected, an amendment or waiver under this Section 9.02 may not (with respect
to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders
must consent to an amendment or waiver;
(b) reduce the principal of or change or have the effect
of changing the fixed maturity of any Note;
(c) reduce the redemption price of Notes or alter the
provisions with respect to the redemption of the Notes in a manner
adverse to the Holders (other than, for the avoidance of doubt,
Sections 4.07 and 4.08 hereof);
(d) reduce the rate of or change the time for payment of
scheduled interest on any Note;
(e) waive a Default in the payment of scheduled principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of a majority in aggregate
principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration);
(f) make any Note payable in money other than that stated
in the Notes;
(g) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive scheduled payments of principal of or premium, if any, or
interest on the Notes;
(h) waive a redemption payment with respect to any Note
(other than, for the avoidance of doubt, a payment required by Sections
4.07 and 4.08 hereof);
(i) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture otherwise than in accordance
with the terms of this Indenture;
(j) make any change in Section 6.04, 6.07 or 9.01 hereof or in
this Section 9.02; or
-89-
(k) make any change in Article 10 (including the related
definitions) that materially adversely affects the rights of the
Holders of the Notes, taken as a whole.
Section 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in a amended or supplemental Indenture that complies with the
TIA as then in effect.
Section 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Xxxxxx's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. Issuer in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
Issuer may not sign an amendment or supplemental Indenture until the Board of
Directors approves it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall
be fully protected in relying upon, in addition to the documents required by
Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating
that the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
-90-
ARTICLE 10.
SUBORDINATION
Section 10.01. AGREEMENT TO SUBORDINATE.
Issuer agrees, and each Holder by accepting a Note agrees,
that the Indebtedness, interest and other Obligations of any kind evidenced by
the Notes and this Indenture is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment in full in
cash or Cash Equivalents of all Senior Debt of Issuer (whether outstanding on
the date hereof or hereafter created, incurred, assumed or guaranteed), and that
the subordination is for the benefit of the holders of Senior Debt.
Section 10.02. CERTAIN DEFINITIONS.
"DESIGNATED SENIOR DEBT" means (i) the Obligations of Issuer
under the Senior Credit Facility or a guarantee thereof and (ii) any other
Senior Debt permitted under this Indenture (a) the principal amount of which is
$25.0 million or more and (b) that has been designated by Issuer or a Guarantor
as "Designated Senior Debt."
"PERMITTED JUNIOR SECURITIES" means: (1) Equity Interests in
Issuer (other than any Equity Interests that are subject to redemption or
purchase obligations or put rights effective prior to six months following the
final maturity of Senior Debt and any debt securities issued in exchange for
Senior Debt); or (2) unsecured debt securities of Issuer or any Guarantor that
are subordinated to all Senior Debt and any debt securities issued in exchange
for Senior Debt to substantially the same extent as, or to a greater extent
than, the Notes and the Note Guarantees are subordinated to Senior Debt pursuant
to the terms of this Indenture and which have no required payments of principal
prior to six months following the final maturity of Senior Debt and any debt
securities issued in exchange for Senior Debt.
"REPRESENTATIVE" means the indenture trustee or other trustee,
agent or representative for any Senior Debt.
"SENIOR DEBT" means: (i) all Indebtedness outstanding under
the Senior Credit Facility, and all Hedging Obligations with respect thereto;
(ii) any other Indebtedness permitted to be incurred by Issuer or a Guarantor
under the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with the
Notes or subordinated in right of payment to the Notes or any other Indebtedness
of Issuer; and (iii) all Obligations with respect to the items listed in the
preceding clauses (i) and (ii). Notwithstanding anything to the contrary in the
preceding, Senior Debt will not include: (i) any liability for federal, state,
local or other taxes owed or owing by Issuer; (ii) any Indebtedness of Issuer to
any of its Subsidiaries or other Affiliates; (iii) any obligation of Issuer
aris-
-91-
ing from Disqualified Stock of Issuer; (iv) any trade payables; or (v) any
Indebtedness that is incurred in violation of this Indenture.
Section 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of Issuer or any Guarantor
whether in cash, properties, securities or otherwise, (i) in a liquidation or
dissolution of Issuer or any Guarantor, (ii) in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to Issuer or its assets,
(iii) in an assignment for the benefit of creditors or (iv) in any marshaling of
Issuer's assets and liabilities, the holders of Senior Debt shall be entitled to
receive payment in full in cash or Cash Equivalents of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt whether or
not such interest is an allowable claim) before the Holders of Notes will be
entitled to receive any payment with respect to the Notes or under the Note
Guarantees, and until all Obligations with respect to Senior Debt are paid in
full in cash, any distribution to which the Holders of Notes would be entitled
shall be made to the holders of Senior Debt (except that Holders of Notes may
receive and retain Permitted Junior Securities and payments made from the trust
created pursuant to Article 8 hereof).
To the extent any payment of Senior Debt (whether by or on
behalf of Issuer or any Subsidiary, as proceeds of security or enforcement of
any right of setoff or otherwise) is declared to be fraudulent or preferential,
set aside or required to be paid to any receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then if such
payment is recovered by, or paid over to, such receiver, trustee in bankruptcy,
liquidating trustee, agent or other similar Person, the Senior Debt or part
thereof originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation to
repay any Senior Debt is declared to be fraudulent, invalid, or otherwise set
aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or
similar law, then the obligations so declared fraudulent, invalid or otherwise
set aside (and all other amounts that would come due with respect thereto had
such obligation not been affected) shall be deemed to be reinstated and
outstanding as Senior Debt for all purposes hereof as if such declaration,
invalidity or setting aside had not occurred.
Section 10.04. DEFAULT ON DESIGNATED SENIOR DEBT.
Issuer also may not make any payment upon or in respect of the
Notes (except in Permitted Junior Securities or from the trust created pursuant
to Article 8 hereof) if:
(i) a payment default on Designated Senior Debt occurs
and is continuing beyond any applicable grace period; or
-92-
(ii) any other default occurs and is continuing on Designated
Senior Debt that permits holders of the Designated Senior Debt to
accelerate its maturity and the Trustee receives a notice of such
default (a "PAYMENT BLOCKAGE NOTICE") from the holders of any
Designated Senior Debt.
Payments on the Notes may and shall be resumed:
(i) in the case of a payment default, upon the date on
which such default is cured or waived; and
(ii) in case of a nonpayment default, the earlier of the
date on which such nonpayment default is cured or waived or 179 days
after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been
accelerated.
No new Payment Blockage Notice may be delivered under clause
(ii) above unless and until 360 days have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice.
No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days. In the
event that Issuer or any Guarantor makes any payment to the Trustee or any
Holder of any Note prohibited by the foregoing, such payment will be required to
be held in trust for and paid over to the holders of Senior Debt (or the
Representative thereof). The Trustee and the Holders of the Notes will not
challenge or contest the enforceability or validity of the Senior Credit
Facility or any obligation, Lien or encumbrance thereunder.
Section 10.05. ACCELERATION OF SECURITIES.
If payment of the Notes is accelerated because of an Event of
Default, Issuer shall promptly notify holders of Senior Debt of the
acceleration.
Section 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes (other than payments in the
form of Permitted Junior Securities or payments made from the trust created
pursuant to Article 8 hereof) at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section
10.04 hereof, such payment shall be held by the Trustee or such Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Debt as their interests may appear or their
Representative under the inden-
-93-
ture or other agreement (if any) pursuant to which Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of all Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in cash in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt, and shall not be liable to any
such holders if the Trustee shall pay over or distribute to or on behalf of
Holders or Issuer or any other Person money or assets to which any holders of
Senior Debt shall be entitled by virtue of this Article 10, except if such
payment is made as a result of the willful misconduct or gross negligence of the
Trustee.
Section 10.07. NOTICE BY ISSUER.
Issuer shall promptly notify the Trustee and the Paying Agent
of any facts known to Issuer that would cause a payment of any Obligations with
respect to the Notes to violate this Article 10, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Debt as provided
in this Article 10.
Section 10.08. SUBROGATION.
After all Senior Debt is paid in full in cash and until the
Notes are paid in full, Holders of Notes shall be subrogated (equally and
ratably with all other Indebtedness PARI PASSU with the Notes) to the rights of
holders of Senior Debt to receive distributions applicable to Senior Debt to the
extent that distributions otherwise payable to the Holders of Notes have been
applied to the payment of Senior Debt. A distribution made under this Article 10
to holders of Senior Debt that otherwise would have been made to Holders of
Notes is not, as between Issuer and Holders, a payment by Issuer on the Notes.
Section 10.09. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of
Notes and holders of Senior Debt. Nothing in this Indenture shall: (i) impair,
as between Issuer and Holders of Notes, the obligation of Issuer, which is
absolute and unconditional, to pay, when due, principal of, premium, if any, and
interest on the Notes in accordance with their terms; (ii) affect the relative
rights of Holders of Notes and creditors of Issuer other than their rights in
relation to holders of Senior Debt; or (iii) prevent the Trustee or any Holder
of Notes from exercising its available remedies upon a Default or Event of
Default, subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of
-94-
Notes. If Issuer fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUER.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by Issuer or any Holder or by the failure of Issuer or
any Holder to comply with this Indenture.
The Trustee and Holders agree that they will not challenge the
validity, enforceability or perfection of any Senior Debt or the liens,
guarantees and security interests securing the same and that as between the
holders of the Senior Debt on the one hand and the Trustee and Holders on the
other, the terms hereof shall govern even if all or part of the Senior Debt or
such liens and security interests are avoided, disallowed, subordinated, set
aside or otherwise invalidated in any judicial proceeding or otherwise,
regardless of the theory upon which such action is premised.
Without in any way limiting the generality of this Section
10.10, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Trustee or the Holders and without impairing or
releasing the subordination provided in this Article 10 or the obligations
hereunder of the Holders to the holders of Senior Debt, do any one or more of
the following: (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Debt, the Senior Credit Facility
or any instrument evidencing the same or any agreement under which Senior Debt
is outstanding or secured; (b) sell, exchange, release, foreclose against or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Debt; (c) release any Person liable in any manner for the collection of Senior
Debt; and (d) exercise or refrain from exercising any rights against Issuer, any
Subsidiary thereof or any other Person.
Section 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of any Senior Debt, the distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets of Issuer referred
to in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative(s) or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, all holders of the Senior Debt and other Indebtedness of
Issuer, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
-95-
Section 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least two Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only Issuer or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold
Senior Debt with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights.
Section 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof,
authorizes and directs the Trustee on such Xxxxxx's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10 and the subordination of the Note Guarantees as provided in
Section 11.02, and appoints the Trustee to act as such Xxxxxx's attorney-in-fact
for any and all such purposes, including, in the event of any dissolution,
winding up, liquidation or reorganization of Issuer or any Subsidiary (whether
in bankruptcy, insolvency, receivership, reorganization or similar proceedings
or upon an assignment for the benefit of creditors or otherwise), the filing of
a claim for the unpaid balance of its Notes in the form required in those
proceedings. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in Section 6.09 hereof
at least 30 days before the expiration of the time to file such claim, the
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Notes.
Section 10.14. AMENDMENTS.
The provisions of this Article 10 or Section 11.02 or 11.06
(including, without limitation, any definitions or other sections included by
reference or incorporation or the terms and conditions of the Note Guarantees)
shall not be amended or modified in any way adverse to any holder of Senior Debt
then outstanding without the written consent of the Representative under the
Senior Credit Facility or, in the absence thereof, of the holders of a majority
in aggregate principal amount of such Senior Debt.
-96-
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01. GUARANTEE.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of Issuer hereunder or thereunder, that: (a) the
principal of and interest on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or otherwise, and interest on
the overdue principal of and interest on the Notes, if any, if lawful, and all
other obligations of Issuer to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors shall be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
The Guarantors hereby agree that their 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
Issuer, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of Issuer, any
right to require a proceeding first against Issuer, protest, notice and all
demands whatsoever and covenant that this Note Guarantee shall not be discharged
except by complete performance of the obligations contained in the Notes and
this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to Issuer, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either Issuer or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guaran-
-97-
tors, on the one hand, and the Holders and the Trustee, on the other hand, (x)
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article 6 hereof 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 declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors
shall have the right to seek contribution from any non-paying Guarantor so long
as the exercise of such right does not impair the rights of the Holders under
the Guarantee.
Section 11.02. SUBORDINATION OF NOTE GUARANTEE.
The Obligations of each Guarantor under its Note Guarantee
pursuant to this Article 11 shall be junior and subordinated to the prior
payment in full in cash of the Senior Debt of such Guarantor on the same basis
as the Notes are junior and subordinated to Senior Debt of Issuer. For the
purposes of the foregoing sentence, the Trustee and the Holders shall have the
right to receive and/or retain payments by any of the Guarantors only at such
times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof.
Section 11.03. LIMITATION ON GUARANTOR LIABILITY.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Note
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Note Guarantee. To effectuate the foregoing intention,
the Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor under its Note Guarantee and this Article 11 shall
be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that are
relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under this
Article 11, result in the obligations of such Guarantor under its Note Guarantee
not constituting a fraudulent transfer or conveyance.
Section 11.04. EXECUTION AND DELIVERY OF NOTE GUARANTEE.
To evidence its Note Guarantee set forth in Section 11.01,
each Guarantor hereby agrees that a notation of such Note Guarantee
substantially in the form included in Exhibit E shall be endorsed by an Officer
of such Guarantor on each Note authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of such Guarantor by its
President, Executive or Senior Vice President, Treasurer or one of its Vice
Presidents.
-98-
Further, Issuer shall cause all future Guarantors to execute a Supplemental
Indenture substantially in the form of EXHIBIT F.
Each Guarantor hereby agrees that its Note Guarantee set forth
in Section 11.01 shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the
Note Guarantee no longer holds that office at the time the Trustee authenticates
the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be
valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the Note
Guarantee set forth in this Indenture on behalf of the Guarantors.
Section 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
A Guarantor may not sell, assign, lease, transfer, convey or
otherwise dispose of all or substantially all of its assets, or consolidate with
or merge with or into (whether or not such Guarantor is the surviving Person),
another Person unless: (i) immediately after giving effect to such transaction,
no Default exists; and (ii) either (a) the Person acquiring the assets in any
such sale or disposition or the Person formed by or surviving any such
consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor under the Notes, this Indenture and the
Registration Rights Agreement pursuant to a supplemental indenture satisfactory
to the Trustee; or (b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture,
including, without limitation, Section 4.08 or Article 10 hereof.
Section 11.06. RELEASES OF SUBSIDIARY GUARANTORS.
The Note Guarantee of a Guarantor will be released:
(1) upon any sale or other disposition of all or
substantially all of the assets of such Guarantor (including by way of
merger or consolidation or any sale of all of the Capital Stock of that
Guarantor); PROVIDED that Issuer applies the Net Proceeds of that sale
or other disposition in accordance with the applicable provisions of
this Indenture, including, without limitation, Section 4.08 or Article
10 hereof; or
(2) if Issuer designates such Guarantor as an
Unrestricted Subsidiary in accordance with this Indenture;
PROVIDED, HOWEVER, in either case that any such termination shall occur only to
the extent that all obligations of such Guarantor under all of its Guarantees of
any Indebtedness of Issuer or
-99-
any Indebtedness of any other Guarantor shall also terminate upon such release
and none of its Equity Interests are pledged for the benefit of any holder of
any Indebtedness of Issuer or any Indebtedness of any Restricted Subsidiary of
Issuer.
Upon delivery by Issuer to the Trustee of an Officers'
Certificate, to the effect that such sale or other disposition or that such
designation was made by the Company in accordance with the provisions of this
Indenture, the Trustee shall execute any documents reasonably required in order
to evidence the release of any such Guarantor from its obligations under its
Note Guarantee. The Trustee will provide any written confirmation or evidence of
the termination of such Note Guarantee as reasonably required by the
Representative.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article 11.
ARTICLE 12.
MISCELLANEOUS
Section 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.
Section 12.02. NOTICES.
Any notice or communication by Issuer, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt requested),
or sent by telecopier or overnight courier guaranteeing next day delivery, to
the other's address.
If to Issuer and/or any Guarantor:
PETCO Animal Supplies, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
-100-
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
If to the Trustee:
U.S. Bank N.A.
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
Issuer, any Guarantor or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, or by overnight air courier guaranteeing next day delivery
to its address shown on the register kept by the Registrar. Any notice or
communication shall also be so mailed to any Person described in TIA Section
313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If Issuer mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
-101-
Section 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS
OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
Issuer, the Trustee, the Registrar and anyone else shall have the protection
of TIA Section 312(c).
Section 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by Issuer to the Trustee to
take any action under this Indenture, Issuer shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the
provisions of TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he
or she has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
-102-
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of
Issuer or any Guarantor, as such, shall have any liability for any obligations
of Issuer or any Guarantor under the Notes, this Indenture, the Note Guarantees,
the Registration Rights Agreement or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF
NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of Issuer or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 12.10. SUCCESSORS.
All agreements of Issuer in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
Section 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
-103-
Section 12.12. COUNTERPART ORIGINALS; ACCEPTANCE BY TRUSTEE.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement. U.S. Bank N.A. xxxxxx accepts the trusts in this Indenture
declared or provided, upon the terms and conditions hereinabove set forth.
Section 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signature pages follow]
-103-
SIGNATURES
Dated as of October 26, 2001
PETCO ANIMAL SUPPLIES, INC.
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
GUARANTORS:
PETCO Southwest, L.P.,
as Guarantor
By: PETCO ANIMAL SUPPLIES, INC.,
its General Partner
By: /s/ XXXXX X. XXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
PM Management Incorporated
Pet Concepts International
INTERNATIONAL PET SUPPLIES &
DISTRIBUTION, INC.
PETCO SOUTHWEST, INC.,
each as Guarantor
By: /s/ XXXXX X. XXXXX
---------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President, Secretary,
Chief Financial Officer, and
Treasurer
U.S. BANK N.A.,
as Trustee
By: /s/ XXXXX X. XXXXXX XXX
---------------------------------
Name: Xxxxx X. Xxxxxx XXX
Title: Vice President
A-1-3
EXHIBIT A-1
(Face of Note)
================================================================================
CUSIP:
-------------------------
10.75% Senior Subordinated Notes due 2011
No.: $
-------------------------
PETCO Animal Supplies, Inc.
promises to pay to
--------------------------------------------------------------
or registered assigns,
the principal sum of
------------------------------------------------------------
Dollars on November 1, 2011.
Interest Payment Dates: May 1 and November 1, commencing May 1, 2002.
Record Dates: April 15 and October 15.
Dated:
--------------------
PETCO Animal Supplies, Inc.
By:
-----------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
U.S. Bank N.A.,
as Trustee
By:
-------------------------------------------------
Authorized Signatory
================================================================================
A-1-1
(Back of Note)
10.75% Senior Subordinated Notes due 2011
[INSERT THE GLOBAL NOTE LEGEND, IF APPLICABLE PURSUANT TO THE PROVISIONS
OF THE INDENTURE]
[INSERT THE PRIVATE PLACEMENT LEGEND, IF APPLICABLE PURSUANT TO THE
PROVISIONS OF THE INDENTURE]
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. PETCO Animal Supplies, Inc., a Delaware
corporation ("Issuer"), promises to pay interest on the principal amount of this
Note at 10.75% per annum from October 26, 2001 until maturity. Issuer will pay
interest semi-annually on May 1 and November 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
original issuance; PROVIDED that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that
the first Interest Payment Date shall be May 1, 2002. Issuer shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand to the extent
lawful at the interest rate applicable to the Notes; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. METHOD OF PAYMENT. Issuer will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the April 15 or October 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. Principal, premium, if any,
and interest on the Notes will be payable at the office or agency of Issuer
maintained for such purpose or, at the option of Issuer, payment of interest may
be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; PROVIDED that all
payments of principal, premium and interest with respect to Notes the Holders of
which have given wire transfer instructions to Issuer prior to the Record Date
will be required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof. Until otherwise designated by
Issuer, Issuer's office or agency in
New York will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of $1,000
and integral multiples thereof. Such payment shall be in
A-1-2
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank
N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar.
Issuer may change any Paying Agent or Registrar without notice to any Holder.
Issuer or any of its Subsidiaries may act in any such capacity.
4. INDENTURE AND SUBORDINATION. Issuer issued the Notes
under an Indenture dated as of October 26, 2001 ("Indenture") by and among
Issuer, the Guarantors and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (15 U.S. Code xx.xx. 77aaa-77bbbb) (the
"TIA"). The Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of such terms. To the extent any provision
of this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling. The payment of the
Notes will, to the extent set forth in the Indenture, be subordinated in right
of payment to the prior payment in full in cash or Cash Equivalents of all
Senior Debt.
5. OPTIONAL REDEMPTION. Except as set forth in the
following paragraph, the Notes will not be redeemable at Issuer's option prior
to November 1, 2006. On or after November 1, 2006, the Notes will be subject to
redemption at any time at the option of Issuer, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on November 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2006.......................................... 105.375%
2007.......................................... 103.583%
2008.......................................... 101.792%
2009 and thereafter........................... 100.000%
Notwithstanding the foregoing, at any time on or prior to
November 1, 2004, Issuer may on any one or more occasions redeem up to 35% of
the aggregate principal amount of Notes at a redemption price equal to 110.75%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the redemption date, with the net cash proceeds of Public Equity
Offerings by Issuer; PROVIDED that (i) at least 65% of the aggregate principal
amount of Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by Issuer and its
Subsidiaries) and (ii) such redemption shall occur within 90 days of the date of
the closing of such Public Equity Offering.
A-1-3
6. MANDATORY REDEMPTION. For the avoidance of doubt, an
offer to purchase pursuant to paragraph 7 shall not be deemed a redemption.
Issuer shall not be required to make mandatory redemption payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER. If a Change of
Control occurs, each Holder of Notes will have the right to require Issuer to
make an offer to all Holders to repurchase Notes on the terms, in accordance
with the procedures and subject to the limitations set forth in the Indenture.
If Issuer or a Restricted Subsidiary consummates any Asset Sales, when the
aggregate amount of Excess Proceeds exceeds $10.0 million, Issuer will be
required to make an offer to all Holders of Notes and all holders of other PARI
PASSU Indebtedness, containing provisions similar to those set forth in the
Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets, to purchase the maximum principal amount of Notes and such
other PARI PASSU Indebtedness that may be purchased out of the Excess Proceeds
on the terms, in accordance with the procedures and subject to the limitations
set forth in the Indenture and such other PARI PASSU Indebtedness.
8. NOTICE OF REDEMPTION. Notice of redemption will be
mailed by first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part. If
any Note is to be redeemed in part only, the notice of redemption that relates
to such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and Issuer may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. Issuer or the Registrar is not
required to transfer or exchange any Note selected for redemption. Also, Issuer
or the Registrar is not required to transfer or exchange any Notes for a period
of 15 days before a selection of Notes to be redeemed.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or the Note Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes) and any existing Default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in
A-1-4
principal amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, Notes). Without the consent of any Holder of Notes, Issuer and the
Trustee may amend or supplement the Indenture or the Notes to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the obligations of Issuer or any Guarantor to Holders of the Notes in case of a
merger or consolidation or sale of all or substantially all assets in accordance
with Article 5 of the Indenture or Section 11.05 thereof, to make any change
that would provide any additional rights or benefits to the Holders of the Notes
or that does not adversely affect the legal rights under the Indenture of any
such Holder, to comply with the requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the TIA, to make any change in
Article 10 of the Indenture that would limit or terminate the benefits available
to any holder of Senior Debt (or any Representative) under the Indenture, to add
additional Note Guarantees, to secure the Notes, to add to the covenants of
Issuer for the benefit of the Holders or to surrender any right or power herein
conferred upon Issuer, to comply with the procedures of the Trustee, The
Depository Trust Company or other applicable entity with respect to the
provisions of the Indenture and the Notes relating to transfers of the Notes or
to provide for the issuance of the Exchange Notes, which shall have terms
substantially identical in all material respects to the Notes (except that the
transfer restrictions contained in the Notes shall be modified or eliminated, as
appropriate), and which shall be treated, together with any outstanding Notes,
as a single issue of securities, or to change the name or title of the Notes and
make any non-substantive conforming changes related thereto.
12. DEFAULTS AND REMEDIES. If any Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes generally may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency as set
forth in the Indenture, with respect to Issuer or any Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, or the premium on, the Notes.
13. TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for Issuer or its Affiliates, and may otherwise deal with
Issuer or its Affiliates, as if it were not the Trustee; however, if it acquires
any conflicting interest it must eliminate such conflict within 90 days, apply
to the SEC for permission to continue or resign.
A-1-5
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of Issuer or any Guarantor, as such, shall
have any liability for any obligations of Issuer or any Guarantor under the
Notes, the Indenture, the Note Guarantees, the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.
15. GUARANTEES. This Note will be entitled to the
benefits of certain Guarantees made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entirety), 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).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE Notes. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between
Issuer and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures,
Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
20. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF
NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Issuer will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to: PETCO Animal Supplies, Inc., 0000 Xxxxx Xxxx, Xxx
Xxxxx, XX 00000, Attention: Chief Financial Officer.
A-1-6
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
-------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of Issuer. The agent may substitute another
to act for him.
--------------------------------------------------------------------------------
Date:
-----------------------------
Your Signature:
-------------------------------
(Sign exactly as your name
appears on the Note)
SIGNATURE GUARANTEE
-------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
A-1-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by Issuer
pursuant to Section 4.07 or 4.08 of the Indenture, check the box below:
[ ] Section 4.07 [ ] Section 4.08
If you want to elect to have only part of this Note purchased
by Issuer pursuant to Section 4.07 or Section 4.08 of the Indenture, state the
amount you elect to have purchased:
$
-------------------------------
Date: Your Signature:
---------------------- -------------------------
(Sign exactly as your
name appears on the
Note)
Tax Identification No:
------------------
SIGNATURE GUARANTEE
--------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
A-1-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Amount of decrease Amount of Principal Amount
in increase in of this Signature of
Principal Principal Global Note authorized signatory
Amount of Amount of following such of Trustee or
Date of Exchange this Global Note this Global Note decrease (or increase) Custodian
---------------- ---------------- ---------------- ---------------------- ---------
1. THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
A-1-9
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
===============================================================================
CUSIP: X0000XXX0
10.75% Senior Subordinated Notes due 2011
No.:___ $
-------------------------
PETCO Animal Supplies, Inc.
promises to pay to
--------------------------------------------------------------
or registered assigns,
the principal sum of
------------------------------------------------------------
Dollars on November 1, 2011.
Interest Payment Dates: May 1 and November 1, commencing May 1, 2002.
Record Dates: April 15 and October 15.
Dated: ___________
PETCO Animal Supplies, Inc.
By:
----------------------------
Name:
Title:
This is one of the
Notes referred to in the
within-mentioned Indenture:
U.S. Bank N.A.,
as Trustee
By:
-------------------------------------------------
Authorized Signatory
================================================================================
A-2-1
(Back of Regulation S Temporary Global Note)
10.75% Senior Subordinated Notes due 2011
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL
NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF ITS ISSUER.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(3) TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (5) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AVAILABLE UNDER
THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES.
A-2-2
Capitalized terms used herein shall have the meanings assigned
to them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. PETCO Animal Supplies, Inc., a Delaware
corporation ("Issuer"), promises to pay interest on the principal amount of this
Note at 10.75% per annum from October 26, 2001 until maturity. Issuer will pay
interest semi-annually on May 1 and November 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
original issuance; PROVIDED that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that
the first Interest Payment Date shall be May 1, 2002. Issuer shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand to the extent
lawful at the interest rate applicable to the Notes; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the same rate to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Until this Regulation S Temporary Global Note is exchanged for
one or more Regulation S Permanent Global Notes, the Holder hereof shall not be
entitled to receive payments of interest hereon; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
2. METHOD OF PAYMENT. Issuer will pay interest on the
Notes (except defaulted interest) to the Persons who are registered Holders of
Notes at the close of business on the April 15 and October 15 next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. Principal, premium, if any,
and interest on the Notes will be payable at the office or agency of Issuer
maintained for such purpose or, at the option of Issuer, payment of interest may
be made by check mailed to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; PROVIDED that all
payments of principal, premium and interest with respect to Notes the Holders of
which have given wire transfer instructions to Issuer prior to the Record Date
will be required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof. Until otherwise designated by
Issuer, Issuer's office or agency in
New York will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of $1,000
and integral multiples thereof. Such payment shall be in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank
N.A., the Trustee under the Indenture, will act as Paying Agent and Registrar.
Issuer may change any Paying
A-2-3
Agent or Registrar without notice to any Holder. Issuer or any of its
Subsidiaries may act in any such capacity.
4. INDENTURE AND SUBORDINATION. Issuer issued the
Notes under an Indenture dated as of October 26, 2001 ("Indenture") by and
among Issuer, the Guarantors and the Trustee. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code
Sections 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and
be controlling. The payment of the Notes will, to the extent set forth in the
Indenture, be subordinated in right of payment to the prior payment in full
in cash or Cash Equivalents of all Senior Debt.
5. OPTIONAL REDEMPTION. Except as set forth in the
following paragraph, the Notes will not be redeemable at Issuer's option prior
to November 1, 2006. On or November 1, 2006, the Notes will be subject to
redemption at any time at the option of Issuer, in whole or in part, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed during
the twelve-month period beginning on November 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2006.......................................... 105.375%
2007.......................................... 103.583%
2008.......................................... 101.792%
2009 and thereafter........................... 100.000%
Notwithstanding the foregoing, at any time on or prior to
November 1, 2004, Issuer may on any one or more occasions redeem up to 35% of
the aggregate principal amount of Notes at a redemption price equal to 110.75%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the redemption date, with the net cash proceeds of Public Equity
Offerings by Issuer; PROVIDED that (i) at least 65% of the aggregate principal
amount of Notes issued under the Indenture remains outstanding immediately after
the occurrence of such redemption (excluding Notes held by Issuer and its
Subsidiaries) and (ii) such redemption shall occur within 90 days of the date of
the closing of such Public Equity Offering.
6. MANDATORY REDEMPTION. For the avoidance of doubt, an
offer to purchase pursuant to paragraph 7 shall not be deemed a redemption.
Issuer shall not be required to make mandatory redemption payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER. If a Change of
Control occurs, each Holder of Notes will have the right to require Issuer to
make an offer to all Holders to repur-
A-2-4
chase Notes on the terms, in accordance with the procedures and subject to the
limitations set forth in the Indenture. If Issuer or a Restricted Subsidiary
consummates any Asset Sales, when the aggregate amount of Excess Proceeds
exceeds $10.0 million, Issuer will be required to make an offer to all Holders
of Notes and all holders of other PARI PASSU Indebtedness, containing provisions
similar to those set forth in the Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets, to purchase the maximum
principal amount of Notes and such other PARI PASSU Indebtedness that may be
purchased out of the Excess Proceeds on the terms, in accordance with the
procedures and subject to the limitations set forth in the Indenture and such
other PARI PASSU Indebtedness.
8. NOTICE OF REDEMPTION. Notice of redemption will be
mailed by first class mail at least 30 days but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its registered
address. Notes in denominations larger than $1,000 may be redeemed in part. If
any Note is to be redeemed in part only, the notice of redemption that relates
to such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note. On and after the redemption date interest ceases to accrue on
Notes or portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and Issuer may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. Issuer or the Registrar is not
required to transfer or exchange any Note selected for redemption. Also, Issuer
or the Registrar is not required to transfer or exchange any Notes for a period
of 15 days before a selection of Notes to be redeemed.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in Regulation S) and
(ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of this
Regulation S Temporary Global Note for one or more Global Notes, the Trustee
shall cancel this Regulation S Temporary Global Note.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Notes or the Note Guarantees may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes) and any existing Default or compliance with any provision
A-2-5
of the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Notes). Without the consent of any Holder of Notes,
Issuer and the Trustee may amend or supplement the Indenture or the Notes to
cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to provide for the assumption
of the obligations of Issuer or any Guarantor to Holders of the Notes in case of
a merger or consolidation or sale of all or substantially all assets in
accordance with Article 5 of the Indenture or Section 11.05 thereof, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not adversely affect the legal rights under the Indenture
of any such Holder, to comply with the requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA, to make any
change in Article 10 of the Indenture that would limit or terminate the benefits
available to any holder of Senior Debt (or any Representative) under the
Indenture, to add additional Note Guarantees, to secure the Notes, to add to the
covenants of Issuer for the benefit of the Holders or to surrender any right or
power herein conferred upon Issuer, to comply with the procedures of the
Trustee, The Depository Trust Company or other applicable entity with respect to
the provisions of the Indenture and the Notes relating to transfers of the Notes
or to provide for the issuance of the Exchange Notes, which shall have terms
substantially identical in all material respects to the Notes (except that the
transfer restrictions contained in the Notes shall be modified or eliminated, as
appropriate), and which shall be treated, together with any outstanding Notes,
as a single issue of securities, or to change the name or title of the Notes and
make any non-substantive conforming changes related thereto.
12. DEFAULTS AND REMEDIES. If any Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Notes generally may declare all the Notes to be
due and payable immediately. Notwithstanding the foregoing, in the case of an
Event of Default arising from certain events of bankruptcy or insolvency as set
forth in the Indenture, with respect to Issuer or any Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest. The
Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture except a continuing Default or Event of Default in the payment of
interest on, or the principal of, or the premium, if any, on, the Notes.
13. TRUSTEE DEALINGS WITH ISSUER. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for Issuer or its Affiliates, and may otherwise deal with
Issuer or its Affiliates, as if it were not the Trustee;
A-2-6
however, if it acquires any conflicting interest it must eliminate such conflict
within 90 days, apply to the SEC for permission to continue or resign.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of Issuer or any Guarantor, as such, shall
have any liability for any obligations of Issuer or any Guarantor under the
Notes, the Indenture, the Note Guarantees, the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Notes by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Notes.
15. GUARANTEES. This Note will be entitled to the
benefits of certain Guarantees made for the benefit of the Holders. Reference
is hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors,
the Trustee and the Holders.
16. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. ABBREVIATIONS. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the entirety), 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).
18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Restricted Global Notes and
Restricted Definitive Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between
Issuer and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
19. CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification Procedures,
Issuer has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
20. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF
NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Issuer will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
A-2-7
PETCO Animal Supplies, Inc., 0000 Xxxxx Xxxx, Xxx Xxxxx, XX 00000, Attention:
Chief Financial Officer.
A-2-8
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of Issuer. The agent may substitute another
to act for him.
--------------------------------------------------------------------------------
Date:
-----------------------------
Your Signature:
---------------------------------
(Sign exactly as your
name appears on the Note)
SIGNATURE GUARANTEE
-------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
A-2-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by Issuer
pursuant to Section 4.07 or 4.08 of the Indenture, check the box below:
[ ] Section 4.07 [ ] Section 4.08
If you want to elect to have only part of this Note purchased
by Issuer pursuant to Section 4.07 or Section 4.08 of the Indenture, state the
amount you elect to have purchased:
$
-----------------------------
-------------------------------------------------------------------------------
Date: Your Signature:
---------------------- --------------------------
(Sign exactly as your
name appears on the Note)
Tax Identification No:
-----------------
SIGNATURE GUARANTEE
--------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
A-2-10
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
Amount of decrease Amount of Principal Amount
in increase in of this Signature of
Principal Principal Global Note authorized signatory
Amount of Amount of following such of Trustee or
Date of Exchange this Global Note this Global Note decrease (or increase) Custodian
---------------- ------------------ ---------------- ---------------------- ---------
------------------------
1. THIS SHOULD BE INCLUDED ONLY IF THE NOTE IS ISSUED IN GLOBAL FORM.
A-2-11
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PETCO Animal Supplies, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
[Registrar address block]
Re: 10.75% SENIOR SUBORDINATED NOTES DUE 2011
(CUSIP _____________)
Reference is hereby made to the Indenture, dated as of October
26, 2001 (the "INDENTURE"), by and among PETCO Animal Supplies, Inc., as issuer
("ISSUER"), the Guarantors and U.S. Bank N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
______________ (the "TRANSFEROR") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A
hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
A 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable securities laws of any state of the United
States. Upon consummation of the proposed Transfer in accordance with the terms
of the Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN
A REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a
B-1
person in the United States and (x) at the time the buy order was originated,
the Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an initial
purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF
THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being
effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act and any applicable
securities laws of any state of the United States, and accordingly the
Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and
in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to Issuer or a
Subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the
Securities Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from
the registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the
Transfer complies with the transfer restrictions applicable to
beneficial interests in a Restricted Global Note or Restricted
Definitive Notes and the requirements of the exemption claimed,
which certification is
B-2
supported by (1) a certificate executed by the Transferee in the
form of Exhibit D to the Indenture and (2) if such Transfer is in
respect of a principal amount of Notes at the time of transfer of
less than $250,000, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is
in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject
to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Global Note and/or the Definitive Notes and in
the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR AN UNRESTRICTED DEFINITIVE
NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i)
The Transfer is being effected pursuant to and in accordance with Rule 144 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S.
(i) The Transfer is being effected pursuant to and in accordance with Rule 903
or Rule 904 under the Securities Act and in compliance with the transfer
restrictions contained in the Indenture and any applicable securities laws of
any state of the United States and (ii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other than
Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions
contained in the Indenture and any applicable securities laws of any State of
the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
B-3
This certificate and the statements contained herein are made
for your benefit and the benefit of Issuer.
---------------------------------------------------------
[Insert Name of Transferor]
By:
---------------------------------------------------
Name:
Title:
Dated:
------------------------------
B-4
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
---------
(ii) [ ] Regulation S Global Note (CUSIP ), or
---------
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ), or
--------
(ii) [ ] Regulation S Global Note (CUSIP ), or
--------
(iii) [ ] Unrestricted Global Note (CUSIP ); or
---------
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PETCO Animal Supplies, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
[Registrar address block]
Re: 10.75% SENIOR SUBORDINATED NOTES DUE 2011
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of October
26, 2001 (the "INDENTURE"), by and among PETCO Animal Supplies, Inc., as issuer
("ISSUER"), the Guarantors and U.S. Bank N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
____________ (the "OWNER") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "EXCHANGE"). In connection with
the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN
A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE.
In connection with the Exchange of the Owner's beneficial interest in a
Restricted Global Note for a beneficial interest in an Unrestricted Global Note
in an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable securities laws of any state of the
United States.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with
the Owner's Exchange of a Restricted Definitive Note for a beneficial interest
in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
C-1
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable securities laws of any state of the
United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive
Note is being acquired for the Owner's own account without transfer, (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance
with the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Unrestricted
Definitive Note is being acquired in compliance with any applicable
securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES FOR
RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE
NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the
Exchange of the Owner's Restricted Definitive Note for a beneficial interest in
the [CHECK ONE] __144A Global Note, __Regulation S Global Note with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest is
being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable securities laws of any
state of the United States. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the beneficial interest issued will
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.
C-2
This certificate and the statements contained herein are made
for your benefit and the benefit of Issuer.
----------------------------------------------
[Insert Name of Owner]
By:
------------------------------------------
Name:
Title:
Dated: ________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PETCO Animal Supplies, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
[Registrar address block]
Re: 10.75% SENIOR SUBORDINATED NOTES DUE 2011
(CUSIP _____________)
Reference is hereby made to the Indenture, dated as of October
26, 2001 (the "INDENTURE"), by and among PETCO Animal Supplies, Inc., as issuer
("ISSUER"), the Guarantors and U.S. Bank N.A., as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________
aggregate principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the
Notes or any interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "SECURITIES ACT").
2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the Notes and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to Issuer or any subsidiary thereof,
(B) in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (c) to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you and to Issuer a signed
letter substantially in the form of this letter and, if such transfer is in
respect of a principal amount of Notes, at the time of transfer, of less than
$250,000, an Opinion of Counsel in form reasonably acceptable to Issuer to the
effect that such transfer is in compliance with the Securities Act, (D) outside
the United States in accordance with Rule 904 of
D-1
Regulation S under the Securities Act, (E) pursuant to the provisions of Rule
144(k) under the Securities Act, (F) pursuant to another applicable exemption
from the Securities Act or (G) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing the Definitive Note or beneficial interest in a Global Note from us
in a transaction meeting the requirements of clauses (A) through (F) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the
Notes or beneficial interest therein, we will be required to furnish to you and
Issuer such certifications, legal opinions and other information as you and
Issuer may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) and have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in the Notes,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You and Issuer are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
--------------------------------------------------------
[Insert Name of Accredited Owner]
By:
----------------------------------------------
Name:
Title:
Dated: ________________
D-2
EXHIBIT E
FORM OF SENIOR SUBORDINATED NOTE GUARANTEE
For value received, the undersigned (including any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of October 26, 2001 (the "Indenture") by
and among PETCO Animal Supplies, Inc. ("Issuer"), the Guarantors listed on the
signature page thereto and U.S. Bank N.A., as trustee (the "Trustee"), (a) the
due and punctual payment of the principal of, premium, if any, and interest on
the Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal and premium, and, to the extent permitted by law, interest, and the
due and punctual performance of all other obligations of Issuer to the Holders
or the Trustee all in accordance with the terms of the Indenture and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same 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. The obligations of the undersigned to
the Holders of Notes and to the Trustee pursuant to this Note Guarantee and the
Indenture are expressly set forth in Article 11 of the Indenture and reference
is hereby made to the Indenture for the precise terms of this Note Guarantee.
Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose.
The terms of the Indenture, including, without limitation,
Articles 10 and 11 of the Indenture, are incorporated herein by reference.
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture unless otherwise indicated.
[Name of Guarantor]
By:
------------------------------------------
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "SUPPLEMENTAL INDENTURE"), dated
as of ________________, among __________________ (the "GUARANTEEING
SUBSIDIARY"), a subsidiary of PETCO Animal Supplies, Inc. (or its permitted
successor), a Delaware corporation ("ISSUER"), the other Guarantors (as defined
in the Indenture referred to below) and U.S. Bank N.A., as trustee under the
indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, Issuer has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of October 26, 2001, providing
for the issuance of 10.75% Senior Subordinated Notes due 2011 (the "NOTES");
WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiary shall execute and deliver to the
Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary
shall unconditionally guarantee all of Issuer's Obligations under the Notes and
the Indenture on the terms and conditions set forth herein (the "NOTE
GUARANTEE"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein
without definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary
hereby agrees as follows:
(a) Along with all Guarantors named in the Indenture, to
jointly and severally Guarantee to each Holder of a
Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of
the Indenture, the Notes or the obligations of Issuer
hereunder or thereunder, that:
(i) the principal of and interest on the Notes
will be promptly paid in full when due,
whether at maturity, by acceleration,
redemption or otherwise, and interest on the
overdue principal of and
F-1
interest on the Notes, if any, if lawful,
and all other obligations of Issuer to the
Holders 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 any of such other
obligations, that same will be promptly paid
in full when due or performed in accordance
with the terms of the extension or renewal,
whether at stated maturity, by acceleration
or otherwise. Failing payment when due of
any amount so guaranteed or any performance
so guaranteed for whatever reason, the
Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be unconditional,
irrespective of the validity, regularity or
enforceability of the Notes or the 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 Issuer, any action to enforce the
same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense
of a guarantor.
(c) The following is hereby waived: diligence,
presentment, demand of payment, filing of claims with
a court in the event of insolvency or bankruptcy of
Issuer, any right to require a proceeding first
against Issuer, protest, notice and all demands
whatsoever.
(d) This Note Guarantee shall not be discharged except by
complete performance of the obligations contained in
the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court
or otherwise to return to Issuer, the Guarantors, or
any Custodian, Trustee, liquidator or other similar
official acting in relation to either Issuer or the
Guarantors, any amount paid by either to the Trustee
or such Holder, this Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full
force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to
any right of subrogation in relation to the Holders
in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture
for the purposes of this Note Guarantee,
notwithstanding any stay,
F-2
injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed
hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether
or not due and payable) shall forthwith become due
and payable by the Guarantors for the purpose of this
Note Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as
the exercise of such right does not impair the rights
of the Holders under the Guarantee.
(i) The obligations hereunder shall be subject to the
subordination provisions set forth in Article 10 of
the Indenture.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary
agrees that the Note Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such Note
Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON
CERTAIN TERMS. The Guaranteeing Subsidiary may not sell or otherwise dispose of
all or substantially all of its assets, or consolidate with or merge with or
into (whether or not such Guarantor is the surviving Person) another
corporation, Person or entity whether or not affiliated with such Guarantor
except in accordance with the provisions set forth in the Indenture, including,
without limitation, Section 11.05 of the Indenture.
5. RELEASES. The Note Guarantee of the Guaranteeing
Subsidiary will be released in accordance with the provisions set forth in the
Indenture, including, without limitation, Section 11.06 of the Indenture. The
Trustee will provide any written confirmation or evidence of the termination of
such Note Guarantee as reasonably required by the Representative. Any Guarantor
not released from its obligations under its Note Guarantee shall remain liable
for the full amount of principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided in Article 11 of
the Indenture.
6. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder of the Guaranteeing Subsidiary, as such,
shall have any liability for any obligations of Issuer or any Guaranteeing
Subsidiary under the Notes, the Indenture, any Note Guarantee, the Registration
Rights Agreement or this Supplemental Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder of
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes and execution of
this Supplemental Indenture.
7.
NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE
OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCI-
F-3
PLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are
for convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in
any manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and Issuer.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated: ________________
[Guaranteeing Subsidiary]
By:
---------------------------------------------------
Name:
Title:
F-4
