====================================
COMPASS AEROSPACE CORPORATION
ISSUER,
AND
IBJ XXXXXXXX BANK & TRUST COMPANY
TRUSTEE
-------------------
INDENTURE
Dated as of April 21, 1998
-------------------
$110,000,000
10 1/8% Senior Subordinated Notes due 2005
===================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions....................................................................................... 1
SECTION 1.2. Incorporation by Reference of TIA................................................................. 21
SECTION 1.3. Rules of Construction............................................................................. 22
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating................................................................................... 23
SECTION 2.2. Execution and Authentication...................................................................... 23
SECTION 2.3. Registrar and Paying Agent........................................................................ 24
SECTION 2.4. Paying Agent to Hold Assets in Trust...............................................................25
SECTION 2.5. Securityholder Lists.............................................................................. 25
SECTION 2.6. Transfer and Exchange............................................................................. 25
SECTION 2.7. Replacement Securities............................................................................ 32
SECTION 2.8. Outstanding Securities............................................................................ 33
SECTION 2.9. Treasury Securities............................................................................... 33
SECTION 2.10. Temporary Securities.............................................................................. 33
SECTION 2.11. Cancellation...................................................................................... 34
SECTION 2.12. Defaulted Interest................................................................................ 34
SECTION 2.13. CUSIP Numbers..................................................................................... 35
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption............................................................................... 36
SECTION 3.2. Notices to Trustee................................................................................ 37
SECTION 3.3. Selection of Securities to Be Redeemed............................................................ 37
SECTION 3.4. Notice of Redemption.............................................................................. 37
SECTION 3.5. Effect of Notice of Redemption.................................................................... 38
SECTION 3.6. Deposit of Redemption Price....................................................................... 38
SECTION 3.7. Securities Redeemed in Part....................................................................... 40
i
PAGE
----
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities............................................................................. 40
SECTION 4.2. Maintenance of Office or Agency................................................................... 41
SECTION 4.3. Limitation on Restricted Payments................................................................. 41
SECTION 4.4. Corporate and Partnership Existence............................................................... 43
SECTION 4.5. Payment of Taxes and Other Claims................................................................. 43
SECTION 4.6. Maintenance of Properties and Insurance........................................................... 43
SECTION 4.7. Compliance Certificate; Notice of Default......................................................... 44
SECTION 4.8. Reports........................................................................................... 45
SECTION 4.9. Limitation on Status as Investment Company........................................................ 45
SECTION 4.10. Limitation on Transactions with Affiliates........................................................ 45
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness
and Disqualified Capital Stock....................................................... 46
SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries............................................................... 47
SECTION 4.13. Limitations on Layering Indebtedness............................................................. 48
SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock............................................... 48
SECTION 4.15. Waiver of Stay, Extension or Usury Laws.......................................................... 53
SECTION 4.16. Limitation on Liens Securing Indebtedness........................................................ 53
SECTION 4.17. Rule 144A Information Requirement................................................................ 54
SECTION 4.18. Limitations on Lines of Business................................................................. 54
SECTION 4.19. Transactions Not Subject to Covenants............................................................ 54
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation...................................................... 55
SECTION 5.2. Successor Corporation Substituted................................................................ 55
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default................................................................................. 56
SECTION 6.2. Acceleration of Maturity Date; Rescission
and Annulment........................................................................ 58
ii
PAGE
----
SECTION 6.3. Collection of Indebtedness and Suits for
Enforcement by Trustee............................................................... 59
SECTION 6.4. Trustee May File Proofs of Claim.................................................................. 60
SECTION 6.5. Trustee May Enforce Claims Without
Possession of Securities............................................................. 61
SECTION 6.6. Priorities........................................................................................ 61
SECTION 6.7. Limitation on Suits............................................................................... 62
SECTION 6.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest...................................................... 63
SECTION 6.9. Rights and Remedies Cumulative.................................................................... 63
SECTION 6.10. Delay or Omission Not Waiver...................................................................... 63
SECTION 6.11. Control by Holders................................................................................ 64
SECTION 6.12. Waiver of Existing or Past Default................................................................ 64
SECTION 6.13. Undertaking for Costs............................................................................. 65
SECTION 6.14. Restoration of Rights and Remedies................................................................ 65
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee................................................................................. 65
SECTION 7.2. Rights of Trustee................................................................................. 67
SECTION 7.3. Individual Rights of Trustee...................................................................... 68
SECTION 7.4. Trustee's Disclaimer.............................................................................. 69
SECTION 7.5. Notice of Default................................................................................. 69
SECTION 7.6. Reports by Trustee to Holders..................................................................... 69
SECTION 7.7. Compensation and Indemnity........................................................................ 70
SECTION 7.8. Replacement of Trustee............................................................................ 71
SECTION 7.9. Successor Trustee by Merger, Etc.................................................................. 72
SECTION 7.10. Eligibility; Disqualification..................................................................... 72
SECTION 7.11. Preferential Collection of Claims Against Company................................................. 72
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal
Defeasance or Covenant Defeasance.................................................... 73
SECTION 8.2. Legal Defeasance and Discharge.................................................................... 73
SECTION 8.3. Covenant Defeasance............................................................................... 74
SECTION 8.4. Conditions to Legal or Covenant Defeasance........................................................ 74
iii
PAGE
----
SECTION 8.5. Deposited Cash and U.S. Government
Obligations to be Held in Trust; Other Miscellaneous Provisions...................... 76
SECTION 8.6. Repayment to the Company.......................................................................... 76
SECTION 8.7. Reinstatement..................................................................................... 77
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders................................................ 77
SECTION 9.2. Amendments, Supplemental Indentures
and Waivers with Consent of Holders.................................................. 79
SECTION 9.3. Compliance with TIA............................................................................... 80
SECTION 9.4. Revocation and Effect of Consents................................................................. 80
SECTION 9.5. Notation on or Exchange of Securities............................................................. 81
SECTION 9.6. Trustee to Sign Amendments, Etc................................................................... 81
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the
Holder Upon a Change of Control...................................................... 82
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee........................................................................................ 85
SECTION 11.2. Execution and Delivery of Guarantee.............................................................. 87
SECTION 11.3. Certain Bankruptcy Events........................................................................ 87
SECTION 11.4. Limitation on Merger of Subsidiaries and
Release of Guarantors................................................................ 88
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt........................................................... 89
SECTION 12.2. No Payment on Securities in Certain Circumstances................................................ 89
SECTION 12.3. Securities Subordinated to Prior Payment of
All Senior Debt on Dissolution, Liquidation or Reorganization........................ 91
iv
PAGE
----
SECTION 12.4. Securityholders to Be Subrogated to
Rights of Holders of Senior Debt..................................................... 91
SECTION 12.5. Obligations of the Company and the
Guarantors Unconditional............................................................. 92
SECTION 12.6. Trustee Entitled to Assume Payments Not
Prohibited in Absence of Notice...................................................... 92
SECTION 12.7. Application by Trustee of Assets Deposited with It............................................... 93
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of
the Company, the Guarantors or Holders of Senior Debt................................ 93
SECTION 12.9. Securityholders Authorize Trustee to Effectuate
Subordination of Securities.......................................................... 94
SECTION 12.10. Right of Trustee to Hold Senior Debt............................................................ 94
SECTION 12.11. Article XII Not to Prevent Events of Default.................................................... 94
SECTION 12.12. No Fiduciary Duty of Trustee to Holders
of Senior Debt....................................................................... 95
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls..................................................................................... 95
SECTION 13.2. Notices.......................................................................................... 95
SECTION 13.3. Communications by Holders with Other Holders..................................................... 97
SECTION 13.4. Certificate and Opinion as to Conditions Precedent............................................... 97
SECTION 13.5. Statements Required in Certificate or Opinion.................................................... 97
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar........................................................ 98
SECTION 13.7. Legal Holidays................................................................................... 98
SECTION 13.8. Governing Law.................................................................................... 98
SECTION 13.9. No Adverse Interpretation of Other Agreements.................................................... 99
SECTION 13.10. No Recourse Against Others...................................................................... 99
SECTION 13.11. Successors..................................................................................... 100
SECTION 13.12. Duplicate Originals............................................................................ 100
SECTION 13.13. Severability................................................................................... 100
SECTION 13.14. Table of Contents, Headings, Etc............................................................... 100
SECTION 13.15. Qualification of Indenture..................................................................... 100
SECTION 13.16. Registration Rights............................................................................ 101
EXHIBIT A
[FORM OF SECURITY]..............................................A-1
v
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- -------
310(a)(1)................................................................................. 7.10
(a)(2)................................................................................. 7.10
(a)(3)................................................................................. N.A.
(a)(4)................................................................................. N.A.
(a)(5)................................................................................. 7.10
(b).................................................................................... 7.10
(c).................................................................................... N.A.
311(a).................................................................................... 7.11
(b).................................................................................... 7.11
(c).................................................................................... N.A.
312(a).................................................................................... 2.5
(b).................................................................................... 13.3
(c).................................................................................... 13.3
313(a).................................................................................... 7.6
(b)(1)................................................................................. 7.6
(b)(2)................................................................................. 7.6
(c).................................................................................... 7.6
(d).................................................................................... N.A.
314(a).................................................................................... 4.7(a)
315(a).................................................................................... 7.2
(b).................................................................................... 7.5
(c).................................................................................... 7.1
(d).................................................................................... 7.1
(e).................................................................................... 6.13
316(a)(last sentence)..................................................................... 2.9
(a)(1)(A).............................................................................. 6.11
(a)(1)(B).............................................................................. 6.12
(a)(2)................................................................................. N.A.
(b).................................................................................... 6.8
317(a)(1)................................................................................. 6.3
(a)(2)................................................................................. 6.4
(b).................................................................................... 2.4
318(a).................................................................................... 13.1
(b).................................................................................... N.A.
(c).................................................................................... 13.1
----------
vi
TIA INDENTURE
SECTION SECTION
------- -------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of this Indenture.
vii
INDENTURE, dated as of April 21, 1998, by and between
Compass Aerospace Corporation, a Delaware corporation (the "Company"), and
IBJ Xxxxxxxx Bank & Trust Company, a New York banking corporation as trustee
(the "Trustee").
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Company's 10 1/8% Series A Senior Subordinated Notes due 2005 to be exchanged
for the 10 1/8% Series B Senior Subordinated Notes due 2005:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness or Disqualified
Capital Stock of any person existing at the time such person becomes a
Subsidiary of the Company, including by designation, or is merged or
consolidated into or with the Company or one of its Subsidiaries.
"ACQUISITION" means the purchase or other acquisition of
any person or all or substantially all the assets of any person by any other
person, whether by purchase, merger, consolidation, or other transfer, and
whether or not for consideration.
"AFFILIATE" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company. For purposes of this definition, the term "control" means the
power to direct the management and policies of a person, directly or through
one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise, PROVIDED, THAT, with respect to
ownership interest in the Company and its Subsidiaries, a Beneficial Owner of
10% or more of the total voting power normally entitled to vote in the
election of directors, managers or trustees, as applicable, shall for such
purposes be deemed to constitute control.
"AFFILIATE TRANSACTION" shall have the meaning specified in
Section 4.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"ASSET SALE" shall have the meaning specified in Section
4.14.
"ASSET SALE OFFER" shall have the meaning specified in
Section 4.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified
in Section 4.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified
in Section 4.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified
in Section 4.14.
"AVERAGE LIFE" means, as of the date of determination, with
respect to any security or instrument, the quotient obtained by dividing (i)
the sum of the products (a) of the number of years from the date of
determination to the date or dates of each successive scheduled principal (or
redemption) payment of such security or instrument and (b) the amount of each
such respective principal (or redemption) payment by (ii) the sum of all such
principal (or redemption) payments.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar
Federal, state or foreign law for the relief of debtors.
"BENEFICIAL OWNER" or "BENEFICIAL OWNER" for purposes of
the definition of Change of Control and Affiliate has the meaning attributed
to it in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the
Issue Date), whether or not applicable, except that a "person" shall be
deemed to have "beneficial ownership" of all shares that any such person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time.
"BOARD OF DIRECTORS" means, with respect to any Person, the
board of directors of such Person or any committee of the board of directors
of such Person authorized, with respect to any particular matter, to exercise
the power of the board of directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a
duly adopted resolution of the Board of Directors of such Person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New
York, New York are authorized or obligated by law or executive order to close.
"CAPITAL CONTRIBUTION" means any contribution to the equity
of the Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of common stock with no redemption
rights and no special preferences, privileges or voting rights is given.
"CAPITALIZED LEASE OBLIGATION" means, as to any person, the
obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes
of this definition, the amount of such obligations at any date shall be the
capitalized amount of such obligations at such date, determined in accordance
with GAAP.
2
"CAPITAL STOCK" means, with respect to any corporation, any
and all shares, interests, rights to purchase (other than convertible or
exchangeable Indebtedness that is not itself otherwise capital stock),
warrants, options, participations or other equivalents of or interests
(however designated) in stock issued by that corporation.
"CASH" or "CASH" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public or private debts.
"CASH EQUIVALENT" means (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) or (ii) time deposits
and certificates of deposit and commercial paper issued by the parent
corporation of any domestic commercial bank of recognized standing having
capital and surplus in excess of $500 million or (iii) commercial paper
issued by others rated at least A-2 or the equivalent thereof by Standard &
Poor's Corporation or at least P-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., and in the case of each of (i), (ii), and (iii)
maturing within one year after the date of acquisition.
"CHANGE OF CONTROL" means (i) prior to consummation of an
Initial Public Equity Offering the Excluded Persons shall cease to own
beneficially and of record at least 51% of the total voting power in the
aggregate of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors or (ii) on or following
the consummation of an Initial Public Equity Offering, (A) any merger or
consolidation of the Company with or into any person or any sale, transfer or
other conveyance, whether direct or indirect, of all or substantially all of
the assets of the Company, on a consolidated basis, in one transaction or a
series of related transactions, if, immediately after giving effect to such
transaction(s), any "person" or "group" (as such terms are used for purposes
of Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable)
(other than any of the Excluded Persons) (a) is or becomes the "beneficial
owner," directly or indirectly, of more than 35% of the total voting power in
the aggregate normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the transferee(s) or surviving
entity or entities, and (b) any such person or group becomes, directly or
indirectly, the beneficial owner of a greater percentage of such total voting
power, than beneficially owned by the Excluded Persons, (B) any "person" or
"group" (as such terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act, whether or not applicable) (other than any of the Excluded
Persons) (a) is or becomes the "beneficial owner," directly or indirectly, of
more than 35% of the total voting power in the aggregate of all classes of
Capital Stock of the Company then outstanding normally entitled to vote in
elections of directors, and (b) any such person or group becomes, directly or
indirectly, the beneficial owner of a greater percentage of such total voting
power, than beneficially owned by the Excluded Persons, or (C) during any
period of 12 consecutive months after the Issue Date, individuals who at the
beginning of any such 12-month period constituted the Board of Directors of
the Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company, as applicable, was approved by a vote of a majority of the
3
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company, as applicable, then in office.
"CHANGE OF CONTROL OFFER" shall have the meaning specified
in Section 10.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning
specified in Section 10.1.
"CHANGE OF CONTROL PURCHASE DATE" shall have the meaning
specified in Section 10.1.
"CHANGE OF CONTROL PURCHASE PRICE" shall have the meaning
specified in Section 10.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture, and thereafter
means such successor.
"CONSOLIDATION" means, with respect to the Company, the
consolidation of the accounts of the Subsidiaries with those of the Company,
all in accordance with GAAP; PROVIDED that "consolidation" will not include
consolidation of the accounts of any Unrestricted Subsidiary with the
accounts of the Company. The term "consolidated" has a correlative meaning to
the foregoing.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of
determination (the "Transaction Date") means the ratio, on a PRO FORMA basis,
of (a) the aggregate amount of Consolidated EBITDA of such person
attributable to continuing operations and businesses (exclusive of amounts
attributable to operations and businesses permanently discontinued or
disposed of) for the Reference Period to (b) the aggregate Consolidated Fixed
Charges of such person (exclusive of amounts attributable to operations and
businesses permanently discontinued or disposed of, but only to the extent
that the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed
Charges subsequent to the Transaction Date) during the Reference Period;
PROVIDED, that for purposes of such calculation, (i) Acquisitions which
occurred during the Reference Period or subsequent to the Reference Period
and on or prior to the Transaction Date shall be assumed to have occurred on
the first day of the Reference Period, (ii) transactions giving rise to the
need to calculate the Consolidated Coverage Ratio shall be assumed to have
occurred on the first day of the Reference Period, (iii) the incurrence of
any Indebtedness or issuance of any Disqualified Capital Stock during the
Reference Period or subsequent to the Reference Period and on or prior to the
Transaction Date (and the application of the proceeds therefrom to the extent
used to refinance or retire other Indebtedness) shall be assumed to have
occurred on the first day of the Reference Period, and (iv) the Consolidated
Fixed Charges of such person
4
attributable to interest on any Indebtedness or dividends on any Disqualified
Capital Stock bearing a floating interest (or dividend) rate shall be
computed on a PRO FORMA basis as if the average rate in effect from the
beginning of the Reference Period to the Transaction Date had been the
applicable rate for the entire period, unless such Person or any of its
Subsidiaries is a party to an Interest Swap or Hedging Obligation (which
shall remain in effect for the 12-month period immediately following the
Transaction Date) that has the effect of fixing the interest rate on the date
of computation, in which case such rate (whether higher or lower) shall be
used.
"CONSOLIDATED EBITDA" means, with respect to any person,
for any period, the Consolidated Net Income of such person for such period
adjusted to add thereto (to the extent deducted from net revenues in
determining Consolidated Net Income), without duplication, the sum of (i)
Consolidated income tax expense, (ii) Consolidated depreciation and
amortization expense, and (iii) Consolidated Fixed Charges, less the amount
of all cash payments made by such person or any of its Subsidiaries during
such period to the extent such payments relate to non-cash charges that were
added back in determining Consolidated EBITDA for such period or any prior
period, provided that consolidated income tax expense and depreciation and
amortization of a Subsidiary that is a less than wholly owned Subsidiary
shall only be added to the extent of the equity interest of the Company in
such Subsidiary.
"CONSOLIDATED FIXED CHARGES" of any person means, for any
period, the aggregate amount (without duplication and determined in each case
in accordance with GAAP) of (a) interest expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued (including, in accordance with
the following sentence, interest attributable to Capitalized Lease
Obligations) of such person and its Consolidated Subsidiaries during such
period, including (i) original issue discount and non-cash interest payments
or accruals on any Indebtedness, (ii) the interest portion of all deferred
payment obligations, and (iii) all commissions, discounts and other fees and
charges owed with respect to bankers' acceptances and letters of credit
financings and currency and Interest Swap and Hedging Obligations, in each
case to the extent attributable to such period, and (b) the amount of
dividends accrued or payable (or guaranteed) by such person or any of its
Consolidated Subsidiaries in respect of Preferred Stock (other than by
Subsidiaries of such person to such person or such person's wholly owned
Subsidiaries), except if such Preferred Stock is a payment-in-kind ("PIK")
security, issuance of such additional PIK securities would not count as
dividends for purposes of this definition. For purposes of this definition,
(x) interest on a Capitalized Lease Obligation shall be deemed to accrue at
an interest rate reasonably determined in good faith by the Company to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP and (y) interest expense attributable to any Indebtedness
represented by the guaranty by such person or a Subsidiary of such person of
an obligation of another person shall be deemed to be the interest expense
attributable to the Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means, with respect to any person
for any period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the
5
extent included in computing such net income (or loss) and without
duplication): (a) all gains (but not losses) which are either extraordinary
(as determined in accordance with GAAP) or are either unusual or nonrecurring
(including any gain from the sale or other disposition of assets outside the
ordinary course of business or from the issuance or sale of any capital
stock), (b) the net income, if positive, of any person, other than a
Consolidated Subsidiary, in which such person or any of its Consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to such person or a
Consolidated Subsidiary of such person during such period, but in any case
not in excess of such person's PRO RATA share of such person's net income for
such period, (c) the net income or loss of any person acquired in a pooling
of interests transaction for any period prior to the date of such
acquisition, (d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation
of the terms of its charter or bylaws or any other agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable
to such Consolidated Subsidiary.
"CONSOLIDATED NET WORTH" of any person at any date means
the aggregate consolidated stockholders' equity of such person (plus amounts
of equity attributable to preferred stock) and its Consolidated Subsidiaries,
as would be shown on the consolidated balance sheet of such person prepared
in accordance with GAAP, adjusted to exclude (to the extent included in
calculating such equity), (a) the amount of any such stockholders' equity
attributable to Disqualified Capital Stock or treasury stock of such person
and its Consolidated Subsidiaries, (b) all write-ups in the book value of any
asset of such person or a Consolidated Subsidiary of such person subsequent
to the Issue Date (other than writeups resulting from foreign currency
translations or of tangible assets of a going concern business made within 12
months after the acquisition of such business) and (c) all investments in
Subsidiaries that are not Consolidated Subsidiaries and in persons that are
not Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means, for any person, each
Subsidiary of such person (whether now existing or hereafter created or
acquired) the financial statements of which are consolidated for financial
statement reporting purposes with the financial statements of such person in
accordance with GAAP.
"CORPORATE TRUST OFFICE" means the office of the Trustee in
the Borough of Manhattan, The City of New York.
"COVENANT DEFEASANCE" shall have the meaning specified in
Section 8.3.
"CREDIT AGREEMENT" means the credit agreement entered into
by and among the Company, certain of its subsidiaries, certain financial
institutions and BancBoston Securities Inc. as arranger, BankBoston as a
lender and administrative agent, and DLJ Capital Funding as documentation
agent, providing a revolving credit facility, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, as such credit agreement and/or related documents may
be amended, restated, supple-
6
mented, renewed, replaced or otherwise modified from time to time whether or
not with the same agent, trustee, representative lenders or holders, and,
subject to the proviso to the next succeeding sentence, irrespective of any
changes in the terms and conditions thereof. Without limiting the generality
of the foregoing, the term "Credit Agreement" shall include agreements in
respect of Interest Swap and Hedging Obligations with lenders party to the
Credit Agreement and shall also include any amendment, amendment and
restatement, renewal, extension, restructuring, supplement or modification to
any Credit Agreement and all refundings, refinancings and replacements of any
Credit Agreement, including any agreement (i) extending the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of the Company and its Subsidiaries and their respective
successors and assigns, (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder, PROVIDED that on the date
such Indebtedness is incurred in accordance with the covenant "Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock" or (iv)
otherwise altering the terms and conditions thereof in a manner not
prohibited by the terms of the Indenture.
"CUSTODIAN" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event or condition the occurrence of
which is, or with the lapse of time or the giving of notice or both would be,
an Event of Default.
"DEFAULTED INTEREST" shall have the meaning specified in
Section 2.12.
"DEFINITIVE SECURITIES" means Securities that are in the
form of Security attached hereto as Exhibit A that do not include the
information called for by footnotes 3 and 8 thereof.
"DEPOSITORY" means, with respect to the Securities issuable
or issued in whole or in part in global form, the person specified in Section
2.3 as the Depository with respect to the Securities, until a successor shall
have been appointed and become such pursuant to the applicable provision of
this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"DESIGNATED SENIOR DEBT" means, (a) so long as it is in
effect and there is at least $1 million of outstanding indebtedness
thereunder, the Credit Agreement and (b) any other Senior Debt designated by
the Company to be "Designated Senior Debt" that has an outstanding principal
amount of at least $25.0 million at the time of such designation.
"DISQUALIFIED CAPITAL STOCK" means (a) except as set forth
in (b), with respect to any person, Equity Interests of such person that, by
its terms or by the terms of any security into which it is convertible,
exercisable or exchangeable, is, or upon the happening of an event or the
passage of time or both would be, required to be redeemed or repurchased
(including at the option of the holder thereof) by such person or any of its
Subsidiaries, in whole or in part,
7
on or prior to the Stated Maturity of the Securities and (b) with respect to
any Subsidiary of such person (including with respect to any Subsidiary of
the Company), any Equity Interests other than any common equity with no
preference, privileges, or redemption or repayment provisions.
"EQUITY INTEREST" of any Person means any shares,
interests, participation or other equivalents (however designated) in such
Person's equity, and shall in any event include any Capital Stock issued by,
or partnership or membership interests in, such Person.
"EVENT OF DEFAULT" shall have the meaning specified in
Section 6.1.
"EVENT OF LOSS" means, with respect to any property or
asset, any (i) loss, destruction or damage of such property or asset or (ii)
any condemnation, seizure or taking, by exercise of the power of eminent
domain or otherwise, of such property or asset, or confiscation or
requisition of the use of such property or asset.
"EXCESS PROCEEDS" shall have the meaning specified in
Section 4.14.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE SECURITIES" means the 10 1/8% Series B Senior
Subordinated Notes due 2005, as supplemented from time to time in accordance
with the terms hereof, to be issued pursuant to this Indenture in connection
with the offer to exchange Securities for the Initial Securities that may be
made by the Company pursuant to the Registration Rights Agreement that
contains the information referred to in footnotes 1, 2 and 8 to the form of
Security attached hereto as Exhibit A.
"EXCLUDED PERSON" means officers and directors of the
Company and those persons who beneficially own membership interests in
Compass Holdings LLC, in each case, as of the Issue Date.
"EXEMPTED AFFILIATE TRANSACTION" means (a) customary
employee compensation arrangements approved by a majority of independent (as
to such transactions) members of the Board of Directors of the Company, (b)
dividends permitted under the terms of the covenant discussed in Section 4.3
and payable, in form and amount, on a pro rata basis to all holders of common
stock of the Company, (c) Management Fee Payments up to $500,000 in any
fiscal year and the reimbursement by the Company of reasonable out-of-pocket
costs and expenses incurred in connection with the rendering of management
services to or on behalf of the Company, (d) Permitted Payments to Parent,
(e) transactions solely between the Company and any of its wholly owned
Consolidated Subsidiaries or solely among wholly owned Consolidated
Subsidiaries of the Company and (f) the payment of $750,000 to Parent for
reimbursement of the nonrefundable deposit against the purchase price for
the acquisition of Xxxxxx Machine.
8
"EXISTING INDEBTEDNESS" means Indebtedness of the Company
and its Subsidiaries in existence on the date of this Indenture.
"GAAP" means United States generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as approved by a significant
segment of the accounting profession in the United States as in effect on the
Issue Date.
"GLOBAL SECURITY" means a Security that contains the
information referred to in footnotes 3 and 6 to the form of Security attached
hereto as Exhibit A.
"GUARANTEE" shall have the meaning provided in Section 11.1.
"GUARANTOR" means, subject to the provisions in Section
11.4 of the Indenture, Western Methods Machinery Corporation, Aeromil
Engineering Company, Xxxxxxxx Machine, Inc. and Xxxxxx Machine Incorporated
and each other Subsidiary of the Company that executes a Guarantee
guaranteeing the Securities in accordance with the provisions of the
Indenture.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name
a Security is registered on the Registrar's books.
"INCUR" or "INCUR" shall have the meaning specified in
Section 4.11.
"INCURRENCE DATE" shall have the meaning specified in
Section 4.11.
"INDEBTEDNESS" of any person means, without duplication,
(a) all liabilities and obligations, contingent or otherwise, of such any
person, to the extent such liabilities and obligations would appear as a
liability upon the consolidated balance sheet of such person in accordance
with GAAP, (i) in respect of borrowed money (whether or not the recourse of
the lender is to the whole of the assets of such person or only to a portion
thereof), (ii) evidenced by bonds, notes, debentures or similar instruments,
(iii) representing the balance deferred and unpaid of the purchase price of
any property or services, except (other than accounts payable or other
obligations to trade creditors which have remained unpaid for greater than 60
days past their original due date) those incurred in the ordinary course of
its business that would constitute ordinarily a trade payable to trade
creditors; (b) all liabilities and obligations, contingent or otherwise, of
such person (iv) evidenced by bankers' acceptances or similar instruments
issued or accepted by banks, (v) relating to any Capitalized Lease
Obligation, or (vi) evidenced by a letter of credit or a reimbursement
obligation of such person with respect to any letter of credit; (c) all net
obligations of such person under Interest Swap and Hedging
9
Obligations; (d) all liabilities and obligations of others of the kind
described in the preceding clause (a), (b) or (c) that such person has
guaranteed or that is otherwise its legal liability or which are secured by
any assets or property of such person and all obligations to purchase, redeem
or acquire any Equity Interests; (e) any and all deferrals, renewals,
extensions, refinancing and refundings (whether direct or indirect) of, or
amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (a), (b), (c) or (d), or this
clause (e), whether or not between or among the same parties; and (f) all
Disqualified Capital Stock of such Person (measured at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued and
unpaid dividends). For purposes hereof, the "maximum fixed repurchase price"
of any Disqualified Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any
date on which Indebtedness shall be required to be determined pursuant to the
Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified Capital Stock, such Fair Market Value to be
determined in good faith by the board of directors of the issuer (or managing
general partner of the issuer) of such Disqualified Capital Stock.
"INDENTURE" means this Indenture, as amended or
supplemented from time to time in accordance with the terms hereof.
"INITIAL PUBLIC EQUITY OFFERING" means an initial
underwritten offering of common stock of the Company or Parent for cash
pursuant to an effective registration statement under the Securities Act as a
consequence of which the common stock of the Company or Parent is listed on a
national securities exchange or quoted on the national market system of
Nasdaq stock market.
"INITIAL PURCHASERS" means Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, BancBoston Securities Inc. and Libra Investments,
Inc., severally, and not jointly.
"INITIAL SECURITIES" means the 10 1/8% Series A Senior
Subordinated Notes due 2005, as supplemented from time to time in accordance
with the terms hereof, issued under this Indenture that contains the
information referred to in footnotes 4, 5 and 7 to the form of Security
attached hereto as Exhibit A.
"INTEREST PAYMENT DATE" means the stated due date of an
installment of interest on the Securities.
"INTEREST SWAP AND HEDGING OBLIGATION" means any obligation
of any person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such
person is entitled to receive from time to time periodic payments calculated
by applying either a fixed or floating rate of interest on a stated notional
amount in exchange for periodic
10
payments made by such person calculated by applying a fixed or floating rate
of interest on the same notional amount.
"INVESTMENT" by any person in any other person means
(without duplication) (a) the acquisition (whether by purchase, merger,
consolidation or otherwise) by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities,
including any options or warrants, of such other person or any agreement to
make any such acquisition; (b) the making by such person of any deposit with,
or advance, loan or other extension of credit to, such other person
(including the purchase of property from another person subject to an
understanding or agreement, contingent or otherwise, to resell such property
to such other person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable, endorsements for collection or
deposits arising in the ordinary course of business); (c) other than
guarantees of Indebtedness of the Company or any Guarantor to the extent
permitted by the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock," the entering into by such
person of any guarantee of, or other credit support or contingent obligation
with respect to, Indebtedness or other liability of such other person; (d)
the making of any capital contribution by such person to such other person;
and (e) the designation by the Board of Directors of the Company of any
person to be an Unrestricted Subsidiary. The Company shall be deemed to make
an Investment in an amount equal to the fair market value of the net assets
of any subsidiary (or, if neither the Company nor any of its Subsidiaries has
theretofore made an Investment in such subsidiary, in an amount equal to the
Investments being made), at the time that such subsidiary is designated an
Unrestricted Subsidiary, and any property transferred to an Unrestricted
Subsidiary from the Company or a Subsidiary of the Company shall be deemed an
Investment valued at its fair market value at the time of such transfer.
"ISSUE DATE" means the date of first issuance of the
Securities under the Indenture.
"JUNIOR SECURITY" means any Qualified Capital Stock and any
Indebtedness of the Company or a Guarantor, as applicable, that is
subordinated in right of payment to Senior Debt at least to the same extent
as the Securities or the Guarantee, as applicable, and has no scheduled
installment of principal due, by redemption, sinking fund payment or
otherwise, on or prior to the Stated Maturity of the Securities; PROVIDED,
that in the case of subordination in respect of Senior Debt under the Credit
Agreement, "Junior Security" shall mean any Qualified Capital Stock and any
Indebtedness of the Company or the Guarantor, as applicable, that (i) has a
final maturity date occurring after the final maturity date of, all Senior
Debt outstanding under the Credit Agreement on the date of issuance of such
Qualified Capital Stock or Indebtedness, (ii) is unsecured, (iii) has an
Average Life longer than the security for which such Qualified Capital Stock
or Indebtedness is being exchanged, and (iv) by their terms or by law are
subordinated to Senior Debt outstanding under the Credit Agreement on the
date of issuance of such Qualified Capital Stock or Indebtedness at least to
the same extent as the Securities.
11
"LEGAL DEFEASANCE" shall have the meaning specified in
Section 8.2.
"LEGAL HOLIDAY" shall have the meaning specified in Section
13.7.
"LIEN" means any mortgage, charge, pledge, lien (statutory
or otherwise), privilege, security interest, hypothecation or other
encumbrance upon or with respect to any property of any kind, real or
personal, movable or immovable, now owned or hereafter acquired.
"LIQUIDATED DAMAGES" shall have the meaning specified in
the Registration Rights Agreement.
"MANAGEMENT FEE PAYMENTS" means payments from the Company
to Dunhill and Xxxxx Capital under that certain Management Consulting
Agreement, dated March 9, 1998, as amended, by and between the Company,
Dunhill Bank Caribbean Ltd. and Xxxxx Capital, in accordance with the terms
and provisions of such Management Consulting Agreement on the Issue Date,
PROVIDED, HOWEVER, that the obligation of the Company to make such payments
will be subordinated to the payment of all Obligations with respect to the
Securities (and any Guarantee thereof).
"MATERIAL FACILITY" means a facility that has a customer
certification including without limitation D1-9000.
"MATURITY DATE" means, when used with respect to any
Security, the date specified on such Security as the fixed date on which the
final installment of principal of such Security is due and payable (in the
absence of any acceleration thereof pursuant to the provisions of this
Indenture regarding acceleration of Indebtedness or any Change of Control
Offer or Asset Sale Offer).
"XXXXX'X" means Xxxxx'x Investors Services, Inc. and its
successors.
"MORTGAGE INDEBTEDNESS" of any person means any
Indebtedness of such person secured by real property of such person which in
the reasonable good faith judgment of the Board of Directors is directly
related to a Related Business of the Company.
"NET CASH PROCEEDS" means the aggregate amount of cash or
Cash Equivalents received by the Company in the case of a sale of Qualified
Capital Stock and by the Company and its Subsidiaries in respect of an Asset
Sale plus, in the case of an issuance of Qualified Capital Stock upon any
exercise, exchange or conversion of securities (including options, warrants,
rights and convertible or exchangeable debt) of the Company that were issued
for cash on or after the Issue Date, the amount of cash originally received
by the Company upon the issuance of such securities (including options,
warrants, rights and convertible or exchangeable debt) less, in each case,
the sum of all payments, fees, commissions and (in the
12
case of Asset Sales, reasonable and customary), expenses (including, without
limitation, the fees and expenses of legal counsel and investment banking
fees and expenses) incurred in connection with such Asset Sale or sale of
Qualified Capital Stock, and, in the case of an Asset Sale only, less the
amount (estimated reasonably and in good faith by the Company) of income,
franchise, sales and other applicable taxes (the computation of which shall
take into account any available net operating losses and other tax attributes
of Parent, and the Company and their Subsidiaries) required to be paid by the
Company or any of its respective Subsidiaries in the taxable year of such
sale in connection with such Asset Sale.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of the
Company or its Subsidiaries to the extent that, (i) under the terms thereof
or pursuant to law, no personal recourse may be had against the Company or
its Subsidiaries for the payment of the principal of or interest or premium
on such Indebtedness, and enforcement of obligations on such Indebtedness
(except with respect to fraud, willful misconduct, misrepresentation,
misapplication of funds, reckless damage to assets and undertakings with
respect to environmental matters or construction defects) is limited only to
recourse against interests in specified assets and property (the "Special
Assets"), accounts and proceeds arising therefrom, and rights under purchase
agreements or other agreements with respect to such Subject Assets; (ii) such
Indebtedness (x) is incurred concurrently with the acquisition by the Company
or its Subsidiaries of such Subject Assets or a Person (or interests in a
Person) holding such Subject Assets, or (y) constitutes Refinancing
Indebtedness with respect to Indebtedness so incurred; and (iii) the Subject
Assets are not existing assets and no existing assets or proceeds from the
sale, transfer of other disposition of existing assets were used to acquire
such Subject Assets.
"OBLIGATION" means any principal, premium or interest
payment, or monetary penalty, or damages, due by the Company or any Guarantor
under the terms of the Securities or the Indenture, including any liquidated
damages due pursuant to the terms of the Registration Rights Agreement.
"OFFERING MEMORANDUM" means the final Offering Memorandum
of the Company dated April 15, 1998, relating to the offering of the Initial
Securities in a transaction exempt from the requirements of Section 5 of the
Securities Act.
"OFFICER" means, with respect to the Company or any
Guarantor, the Chief Executive Officer, the President, any Vice President,
the Chief Financial Officer, the Treasurer, the Controller, or the Secretary
of the Company or such Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company
or any Guarantor, a certificate signed by two Officers or by an Officer and
an Assistant Secretary of the Company or such Guarantor and otherwise
complying with the requirements of Sections 13.4 and 13.5.
"OPINION OF COUNSEL" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 13.4 and 13.5.
13
"PARENT" means Compass Holdings LLC or its successor, so
long as such entity owns at least 51% of the Capital Stock of the Company.
"PAYING AGENT" shall have the meaning specified in Section
2.3.
"PAYMENT DEFAULT" shall have the meaning specified in
Section 12.2.
"PAYMENT NOTICE" shall have the meaning specified in
Section 12.2.
"PERMITTED INDEBTEDNESS" means that: (a) the Company and
the Guarantors may incur Indebtedness evidenced by the Securities and
represented by this Indenture up to the amounts specified therein as of the
date thereof; (b) the Company and the Guarantors, as applicable, may incur
Refinancing Indebtedness with respect to any Indebtedness or Disqualified
Capital Stock, as applicable, described in clause (a) of this definition or
incurred under the Debt Incurrence Ratio test of Section 4.11 or which is
outstanding on the Issue Date (after giving effect to the transactions
contemplated under the Offering, and $3.5 million of Mortgage Indebtedness to
be incurred in connection with the acquisition of Brittan Machine and within
six months after the Issue Date, which will be considered outstanding on the
Issue Date for purposes of this paragraph (b)), provided that in each case
such Refinancing Indebtedness is secured only by the assets that secured the
Indebtedness so refinanced; (c) the Company and its Subsidiaries may incur
Indebtedness solely in respect of bankers acceptances, and performance bonds
(to the extent that such incurrence does not result in the incurrence of any
obligation to repay any obligation relating to borrowed money of others), all
in the ordinary course of business in accordance with customary industry
practices, in amounts and for the purposes customary in the Company's
industry; PROVIDED, that the aggregate principal amount outstanding of such
Indebtedness (including any Refinancing Indebtedness and any other
Indebtedness issued to refinance, refund, defease or replace such
Indebtedness) shall at no time exceed $250,000; (d) the Company may incur
Indebtedness to any Subsidiary Guarantor, and any Subsidiary Guarantor may
incur Indebtedness to any other Subsidiary Guarantor or to the Company;
PROVIDED, that, in the case of Indebtedness of the Company, such obligations
shall be unsecured and subordinated in all respects to the Company's
obligations pursuant to the Securities and the date of any event that causes
such Subsidiary Guarantor no longer to be a Subsidiary Guarantor shall be an
Incurrence Date; and (e) any Guarantor may guaranty any Indebtedness of the
Company or another Guarantor that was permitted to be incurred pursuant to
the Indenture, substantially concurrently with such incurrence or at the time
such person becomes a Guarantor.
"PERMITTED INVESTMENT" means (a) Investments in any of the
Securities; (b) Investments in Cash Equivalents; (c) intercompany notes to
the extent permitted under clause (d) of the definition of "Permitted
Indebtedness" and (d) any Investment by the Company or any Subsidiary
Guarantor in a Person if as a result of such Investment such Person
immediately becomes a Wholly Owned Subsidiary Guarantor or such Person is
immediately merged with or into the Company or a Wholly Owned Subsidiary
Guarantor.
14
"PERMITTED LIEN" means (a) Liens existing on the Issue
Date; (b) Liens imposed by governmental authorities for taxes, assessments or
other charges not yet subject to penalty or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the Company in accordance with GAAP;
(c) statutory liens of carriers, warehousemen, mechanics, material men,
landlords, repairmen or other like Liens arising by operation of law in the
ordinary course of business provided that (i) the underlying obligations are
not overdue for a period of more than 30 days, or (ii) such Liens are being
contested in good faith and by appropriate proceedings and adequate reserves
with respect thereto are maintained on the books of the Company in accordance
with GAAP; (d) Liens securing the performance of bids, trade contracts (other
than borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (e) easements, rights-of-way, zoning, similar
restrictions and other similar encumbrances or title defects which, singly or
in the aggregate, do not in any case materially detract from the value of the
property, subject thereto (as such property is used by the Company or any of
its Subsidiaries) or interfere with the ordinary conduct of the business of
the Company or any of its Subsidiaries; (f) Liens arising by operation of law
in connection with judgments, only to the extent, for an amount and for a
period not resulting in an Event of Default with respect thereto; (g) pledges
or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security legislation; (h) Liens securing the Securities; (i) Liens securing
Indebtedness of a Person existing at the time such Person becomes a
Subsidiary or is merged with or into the Company or a Subsidiary or Liens
securing Indebtedness incurred in connection with an Acquisition, PROVIDED
that such Liens were in existence prior to the date of such acquisition,
merger or consolidation, were not incurred in anticipation thereof, and do
not extend to any other assets; (j) Liens arising from Purchase Money
Indebtedness or Mortgage Indebtedness permitted to be incurred pursuant to
Section 4.11 PROVIDED such Liens relate solely to the property which is
subject to such Purchase Money Indebtedness or Mortgage Indebtedness, as
applicable; (k) leases or subleases granted to other persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Company or any of its Subsidiaries or materially detracting
from the value of the relative assets of the Company or any Subsidiary; (l)
Liens arising from precautionary Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company or any of its
Subsidiaries in the ordinary course of business; (m) Liens securing
Refinancing Indebtedness incurred to refinance any Indebtedness that was
previously so secured in a manner no more adverse to the Holders of the
Securities than the terms of the Liens securing such refinanced Indebtedness,
and provided that the Indebtedness secured is not increased and the lien is
not extended to any additional assets or property that would not have been
security for the Indebtedness refinanced; and (n) Liens securing Indebtedness
incurred under the Credit Agreement in accordance with the terms of Section
4.11.
"PERMITTED PAYMENTS TO PARENT" means without duplication,
(a) payments to Parent in an amount sufficient to permit Parent to pay
reasonable and necessary operating expenses and other general corporate
expenses to the extent such expenses relate or are fairly
15
allocable to the Company and its Subsidiaries, provided such expenses do not
exceed $250,000 in any fiscal year; and (b) payments to Parent to enable
Parent to pay foreign, federal, state or local tax liabilities ("Tax
Payment"), not to exceed the amount of any tax liabilities that would be
otherwise payable by the Company and its Subsidiaries and Unrestricted
Subsidiaries to the appropriate taxing authorities if they filed separate tax
returns to the extent that Parent has an obligation to pay such tax
liabilities relating to the operations, assets or capital of the Company or
its Subsidiaries and Unrestricted Subsidiaries PROVIDED, HOWEVER, that (i),
notwithstanding the foregoing, in the case of determining the amount of a Tax
Payment that is permitted to be paid by Company and any of its United States
subsidiaries in respect of their Federal income tax liability, such payment
shall be determined on the basis of assuming that all payments made to Parent
pursuant to the immediately preceding clause (a) shall be treated as a
deductible expense of the Company in the taxable year during which the
obligation to make such payment accrues and (ii) any Tax Payments shall
either be used by Parent to pay such tax liabilities within 90 days of
Parent's receipt of such payment or refunded to the payee.
"PERSON" or "PERSON" means any corporation, individual,
limited liability company, joint stock company, joint venture, partnership,
limited liability company, unincorporated association, governmental
regulatory entity, country, state or political subdivision thereof, trust,
municipality or other entity.
"PREFERRED STOCK" means an Equity Interest of any class or
classes of a Person (however designated) which is preferred as to payments of
dividends, or as to distributions upon any liquidation or dissolution, over
Equity Interests of any other class of such Person.
"PRINCIPAL" of any Indebtedness means the principal of such
Indebtedness.
"PROPERTY" means any right or interest in or to property or
assets of any kind whatsoever, whether real, personal or mixed and whether
tangible, intangible, contingent, direct or indirect.
"PURCHASE AGREEMENT" means the Purchase Agreement dated
April 15, 1998 by and between the Company and the Initial Purchasers, as such
agreement may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"PURCHASE MONEY INDEBTEDNESS" of any person means any
Non-Recourse Indebtedness of such person to any seller or other person
incurred solely to finance the acquisition (including in the case of a
Capitalized Lease Obligation, the lease) of any after acquired tangible
property which, in the reasonable good faith judgment of the Board of
Directors of the Company, is directly related to a Related Business of the
Company and which is incurred substantially concurrently with such
acquisition and is secured only by the assets so financed.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the
Company that is not Disqualified Capital Stock.
16
"QUALIFIED EXCHANGE" means any legal defeasance,
redemption, retirement, repurchase or other acquisition of Capital Stock or
of Indebtedness of the Company issued on or after the Issue Date with the Net
Cash Proceeds received by the Company from the substantially concurrent sale
of Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or for Indebtedness of the Company issued on or after the Issue
Date.
"RECORD DATE" means a Record Date specified in the
Securities whether or not such Record Date is a Business Day, or, if
applicable, as specified in Section 2.12.
"REDEMPTION DATE," when used with respect to any Security
to be redeemed, means the date fixed for such redemption pursuant to Article
III of this Indenture and Para graph 5 in the form of Security attached
hereto as Exhibit A.
"REDEMPTION PRICE," when used with respect to any Security
to be redeemed, means the redemption price for such redemption pursuant to
Paragraph 5 in the form of Security attached hereto as Exhibit A, which shall
include, without duplication, in each case, accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date.
"REFERENCE PERIOD" with regard to any Person means the four
full fiscal quarters (or such lesser period during which such Person has been
in existence) ended immediately preceding any date upon which any
determination is to be made pursuant to the terms of the Securities or this
Indenture.
"REFINANCING INDEBTEDNESS" means Indebtedness or
Disqualified Capital Stock (a) issued in exchange for, or the proceeds from
the issuance and sale of which are used substantially concurrently to repay,
redeem, defease, refund, refinance, discharge or otherwise retire for value,
in whole or in part, or (b) constituting an amendment, modification or
supplement to, or a deferral or renewal of ((a) and (b) above are,
collectively, a "Refinancing"), any Indebtedness or Disqualified Capital
Stock in a principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, not to exceed (after deduction of reasonable and
customary fees and expenses incurred in connection with the Refinancing plus
the amount of any premium paid in connection with such Refinancing in
accordance with the terms of the documents governing the Indebtedness
refinanced without giving effect to any modification thereof made in
connection with or in contemplation of such refinancing) the lesser of (i)
the principal amount or, in the case of Disqualified Capital Stock,
liquidation preference, of the Indebtedness or Disqualified Capital Stock so
Refinanced and (ii) if such Indebtedness being Refinanced was issued with an
original issue discount, the accreted value thereof (as deter mined in
accordance with GAAP) at the time of such Refinancing; PROVIDED, that (A)
such Refinancing Indebtedness of any Subsidiary of the Company shall only be
used to Refinance outstanding Indebtedness or Disqualified Capital Stock of
such Subsidiary, (B) such Refinancing Indebtedness shall (x) not have an
Average Life shorter than the Indebtedness or Disqualified Capital Stock to
be so refinanced at the time of such Refinancing and (y) in all respects, be
no less subordinated or junior, if applicable, to the rights of Holders of
the Securities than
17
was the Indebtedness or Disqualified Capital Stock to be refinanced, (C) such
Refinancing Indebtedness shall have a final stated maturity or redemption
date, as applicable, no earlier than the final stated maturity or redemption
date, as applicable, of the Indebtedness or Disqualified Capital Stock to be
so refinanced, and (D) such Refinancing Indebtedness shall be secured (if
secured) in a manner no more adverse to the Holders of the Securities than
the terms of the Liens (if any) securing such refinanced Indebtedness,
including, without limitation, the amount of Indebtedness secured shall not
be increased.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement dated as of the date hereof by and between the Initial
Purchasers and the Company, as such agreement may be amended, modified or
supplemented from time to time in accordance with the terms thereof.
"RELATED BUSINESS" means the business conducted (or
proposed to be conducted) by the Company and its Subsidiaries as of the Issue
Date and any and all businesses that in the good faith judgment of the Board
of Directors of the Company are materially related businesses.
"RESTRICTED INVESTMENT" means, in one or a series of
related transactions, any Investment, other than other Permitted Investments.
"RESTRICTED PAYMENT" means, with respect to any person, (a)
the declaration or payment of any dividend or other distribution in respect
of Equity Interests of such person or any parent or Subsidiary of such
person, (b) any payment on account of the purchase, redemption or other
acquisition or retirement for value of Equity Interests of such person or any
Subsidiary or parent of such person, (c) other than with the proceeds from
the substantially concurrent sale of, or in exchange for, Refinancing
Indebtedness any purchase, redemption, or other acquisition or retirement
for value of, any payment in respect of any amendment of the terms of or any
defeasance of, any Subordinated Indebtedness, directly or indirectly, by such
person or a parent or Subsidiary of such person prior to the scheduled
maturity, any scheduled repayment of principal, or scheduled sinking fund
payment, as the case may be, of such Indebtedness, (d) any Restricted
Investment by such person and (e) any Management Fee Payments or similar
payments to any Affiliates (other than Subsidiaries) in excess of an
aggregate of $500,000 in any fiscal year, PROVIDED, HOWEVER, that the
obligation of the Company to pay such Management Fee Payments will be
subordinated to the payment of all Obligations with respect to the Securities
(and any Guarantee thereof); PROVIDED, HOWEVER, that the term "Restricted
Payment" does not include (i) any dividend, distribution or other payment on
or with respect to Equity Interests of an issuer to the extent payable solely
in shares of Qualified Capital Stock of such issuer; or (ii) any dividend,
distribution or other payment to the Company, or to any of its Guarantors, by
the Company or any of its Subsidiaries; or (iii) the payment of $750,000 to
Parent for reimbursement for the down payment on the purchase price of Xxxxxx
Machine.
18
"RESTRICTED SECURITY" means a Security, unless or until it
has been (i) effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering it or (ii) distributed
to the public pursuant to Rule 144 (or any similar provision then in force)
under the Securities Act; PROVIDED, that in no case shall an Exchange
Security issued in accordance with this Indenture and the terms and
provisions of the Registration Rights Agreement be a Restricted Security.
"S&P" means Standard & Poor's, a division of The McGraw
Hill Companies, and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the Initial Securities
and, when and if issued as provided in the Registration Rights Agreement, the
Exchange Securities.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"SECURITIES CUSTODIAN" means the Trustee, as custodian with
respect to the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means the Person in whose name
a Security is registered on the Registrar's books.
"SENIOR DEBT" of the Company or any Guarantor means
Indebtedness (including any monetary obligation in respect of the Credit
Agreement, and interest, whether or not allowable, accruing on Indebtedness
incurred pursuant to the Credit Agreement after the filing of a petition
initiating any proceeding under any bankruptcy, insolvency or similar law) of
the Company or such Guarantor arising under the Credit Agreement or that, by
the terms of the instrument creating or evidencing such Indebtedness, is
expressly designated Senior Debt and made senior in right of payment to the
Securities or the applicable Guarantee; PROVIDED, that in no event shall
Senior Debt include (a) Indebtedness to any Subsidiary of the Company or any
officer, director or employee of the Company or any Subsidiary of the
Company, (b) Indebtedness incurred in violation of the terms of this
Indenture, (c) Indebtedness to trade creditors, (d) Disqualified Capital
Stock, (e) Capitalized Lease Obligations, and (f) any liability for taxes
owed or owing by the Company or such Guarantor.
"SIGNIFICANT SUBSIDIARY" shall have the meaning provided
under Regulation S-X of the Securities Act, as in effect on the Issue Date.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 2.12.
19
"STATED MATURITY" when used with respect to any Security,
means April 15, 2005.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the
Company or a Guarantor that is subordinated in right of payment by its terms
or the terms of any document or instrument relating thereto to the Securities
or such Guarantee, as applicable, in any respect or has a stated maturity
after the Stated Maturity.
"SUBSIDIARY," with respect to any person, means (i) a
corporation a majority of whose Equity Interests with voting power, under
ordinary circumstances, to elect directors is at the time, directly or
indirectly, owned by such person, by such person and one or more Subsidiaries
of such person or by one or more Subsidiaries of such person, (ii) any other
person (other than a corporation) in which such person, one or more
Subsidiaries of such person, or such person and one or more Subsidiaries of
such person, directly or indirectly, at the date of determination thereof has
at least majority ownership interest, or (iii) a partnership in which such
person or a Subsidiary of such person is, at the time, a general partner.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or of any Subsidiary of the Company. Unless the
context requires otherwise, Subsidiary means each direct and indirect
Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939, as amended,
(15 U.S. Code Sections 77aaa-77bbbb) as in effect on the date of the
execution of this Indenture, except as provided in Section 9.3.
"TRANSACTIONS" shall have the meaning ascribed thereto in
the Offering Memorandum.
"TRANSFER RESTRICTED SECURITIES" means Securities that bear
or are required to bear the legend set forth in Section 2.6.
"TREASURY RATE" means the yield to maturity at the time of
computation of U.S. Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Release H.15 (519) which has
become publicly available at least two Business Days prior to the applicable
Redemption Date (or, if such statistical release is no longer published, any
publicly available source or similar market data)) closest to the period from
the applicable Redemption Date to April 15, 2002, PROVIDED, HOWEVER, that if
the period from such Redemption Date to April 15, 2002, is not equal to the
constant maturity of a U.S. Treasury security for which a weekly average
yield is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of one year) from the weekly average
yields of U.S. Treasury securities for which such yields are given, except
that if the period from the applicable Redemption Date to April 15, 2002, is
less than one year, the weekly average yield on actually traded U.S. Treasury
securities adjusted to a constant maturity of one year shall be used.
20
"TRUSTEE" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"TRUST OFFICER" means any officer within the corporate
trust division (or any successor group) of the Trustee or any other officer
of the Trustee customarily performing functions similar to those performed by
the persons who at that time shall be such officers, and also means, with
respect to a particular corporate trust matter, any other officer of the
Trustee to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"UNRESTRICTED SUBSIDIARY" means any subsidiary of the
Company that does not own any Capital Stock of, or own or hold any Lien on
any property of, the Company or any other Subsidiary of the Company and that,
at the time of determination, shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company); PROVIDED, that (i) such
subsidiary shall not engage, to any substantial extent, in any line or lines
of business activity other than a Related Business, (ii) neither immediately
prior thereto nor after giving PRO FORMA effect to such designation would
there exist a Default or Event of Default and (iii) immediately after giving
pro forma effect thereto, the Company could incur at least $1.00 of
Indebtedness pursuant to the Debt Incurrence Ratio in Section 4.11. The Board
of Directors of the Company may designate any Unrestricted Subsidiary to be a
Subsidiary, PROVIDED, that (i) no Default or Event of Default is existing or
will occur as a consequence thereof and (ii) immediately after giving effect
to such designation, on a PRO FORMA basis, the Company could incur at least
$1.00 of Indebtedness pursuant to the Debt Incurrence Ratio of Section 4.11.
Each such designation shall be evidenced by filing with the Trustee a
certified copy of the resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable
obligations of, or noncallable obligations guaranteed by, the United States
of America for the payment of which obligation or guarantee the full faith
and credit of the United States of America is pledged.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary all the Equity
Interests of which are owned by the Company or one or more Wholly-owned
Subsidiaries of the Company.
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA,
such provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"COMMISSION" means the SEC.
21
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a
Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee.
"OBLIGOR" on the indenture securities means the Company,
each Guarantor and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by SEC
rule and not otherwise defined herein have the meanings assigned to them
thereby.
SECTION 1.3. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and
words in the plural include the singular;
(5) provisions apply to successive events and
transactions;
(6) "herein," "hereof" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(7) references to Sections or Articles means
reference to such Section or Article in this Indenture, unless stated
otherwise.
22
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of
authentication, in respect thereof, shall be substantially in the form of
Exhibit A hereto, which Exhibit is part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule
or usage. The Company shall approve the form of the Securities and any
notation, legend or endorsement on them. Any such notations, legends or
endorsements not contained in the form of Security attached as Exhibit A
hereto shall be delivered in writing to the Trustee. Each Security shall be
dated the date of its authentication.
The terms and provisions contained in the forms of
Securities shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one
Officer shall attest to, the Security for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security was an
Officer at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Security, the Security shall be valid
nevertheless and the Company shall nevertheless be bound by the terms of the
Securities and this Indenture.
A Security shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Security but such signature shall be conclusive evidence that the Security
has been authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for
original issue in the aggregate principal amount of up to $110,000,000 and
shall authenticate Exchange Securities for original issue in the aggregate
principal amount of up to $110,000,000, in each case upon a written order of
the Company in the form of an Officers' Certificate; PROVIDED that such
Exchange Securities shall be issuable only upon the valid surrender for
cancellation of Initial Securities of a like aggregate principal amount in
accordance with the Registration Rights Agreement. The Officers' Certificate
shall specify the amount of Securities to be authenticated and the date on
which the Securities are to be authenticated. The aggregate principal amount
of Securities outstanding at any time may not exceed $110,000,000, except as
provided in Section 2.7. Upon the written order of the Company in the form of
an Officers' Certificate,
23
the Trustee shall authenticate Securities in substitution of Securities
originally issued to reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company, any Affiliate of the
Company, or any of their respective Subsidiaries.
Securities shall be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiples
thereof.
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the
Borough of Manhattan, The City of New York, where Securities may be presented
for registration of transfer or for exchange ("Registrar"), and an office or
agency where Securities may be presented for payment ("Paying Agent"), and
where notices and demands to or upon the Company in respect of the Securities
may be served. The Company may act as Registrar or Paying Agent, except that,
for the purposes of Articles III, VIII, X, and Section 4.14 hereof and as
otherwise specified in this Indenture, neither the Company nor any Affiliate
of the Company shall act as Paying Agent. The Registrar shall keep a register
of the Securities and of their transfer and exchange. The Company may have
one or more co-Registrars and one or more additional Paying Agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes
any additional Paying Agent. The Company hereby initially appoints the
Trustee as Registrar and Paying Agent, and by its acknowledgement and
acceptance on the signature page hereto, the Trustee hereby initially agrees
so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent (including the Paying Agent) not a party to this
Indenture, which agreement shall implement the provisions of this Indenture
that relate to such Agent, and shall furnish a copy of each such agreement to
the Trustee. The Company shall promptly notify the Trustee in writing of the
name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints The Depository Trust Company
("DTC"), to act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as
Securities Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in
Section 6.1(iv) or (v) hereof, the Trustee shall, or upon the occurrence of
any other Event of Default by notice to
24
the Company, the Registrar and the Paying Agent, the Trustee may assume the
duties and obligations of the Registrar and the Paying Agent hereunder.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, premium, if any, or interest (or Liquidated
Damages, if any) on, the Securities (whether such assets have been
distributed to it by the Company or any other obligor on the Securities), and
shall notify the Trustee in writing of any Default in making any such
payment. If either of the Company or a Subsidiary of the Company acts as
Paying Agent, it shall segregate such assets and hold them as a separate
trust fund for the benefit of the Holders or the Trustee. The Company at any
time may require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at any time
during the continuance of any payment Default or any Event of Default, upon
written request to a Paying Agent, require such Paying Agent to distribute
all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have
been delivered by the Company to the Paying Agent, the Paying Agent (if other
than the Company) shall have no further liability for such assets.
SECTION 2.5. SECURITYHOLDER 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 Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee or any Paying Agent is not the Registrar, the Company shall
furnish to the Trustee on or before the third Business Day preceding each
Interest Payment Date and at such other times as the Trustee or any such
Paying Agent may request in writing a list in such form and as of such date
as the Trustee or any such Paying Agent reasonably may require of the names
and addresses of Holders and the Company shall otherwise comply with TIA
Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE
SECURITIES. When Definitive Securities are presented to the Registrar with a
request:
(x) to register the transfer of such
Definitive Securities; or
(y) to exchange such Definitive
Securities for an equal principal amount of Definitive Securities of other
authorized denominations, the Registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such
transaction are met; PROVIDED, HOWEVER, that the Definitive Securities
surrendered for registration of transfer or exchange:
25
(i) shall be duly endorsed or accompanied
by a written instrument of transfer in form reasonably satisfactory to
the Company and the Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(ii) in the case of Transfer Restricted
Securities that are Definitive Securities, shall be accompanied by
the following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer, a certification
from such Holder to that effect (in substantially the form set
forth on the reverse of the Security); or
(B) if such Transfer Restricted Security is
being transferred to a "qualified institutional buyer" (within
the meaning of Rule 144A promulgated under the Securities Act)
that is aware that any sale of Securities to it will be made
in reliance on Rule 144A under the Securities Act and that is
acquiring such Transfer Restricted Security for its own
account or for the account of another such "qualified
institutional buyer," a certification from such Holder to that
effect (in substantially the form set forth on the reverse of
the Security); or
(C) if such Transfer Restricted Security is
being transferred pursuant to an exemption from registration
in accordance with Rule 144, or outside the United States in
an offshore transaction in compliance with Rule 904 under the
Securities Act, or pursuant to an effective registration
statement under the Securities Act, a certification from such
Holder to that effect (in substan tially the form set forth on
the reverse of the Security); or
(D) if such Transfer Restricted Security is
being transferred in reliance on another exemption from the
registration requirements of the Securities Act and with all
applicable securities laws of the States of the United States,
a certification from such Holder to that effect (in
substantially the form set forth on the reverse of the
Security) and an Opinion of Counsel reasonably acceptable to
the Company and to the Registrar, if the Company so requests,
to the effect that such transfer is in compliance with the
Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A
DEFINITIVE SECURITY FOR A BENEFICIAL INTEREST IN A GLOBAL SECURITY. A
Definitive Security may not be exchanged for a beneficial interest in a
Global Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) if such Definitive Security is a
Transfer Restricted Security, certification, substantially in the form
set forth on the reverse of the Security, that such
26
Definitive Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in accordance
with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive
Security is a Transfer Restricted Security, written instructions
directing the Trustee to make, or to direct the Securities Custodian to
make, an endorsement on the Global Security to reflect an increase in
the aggregate principal amount of the Securities represented by the
Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate a new Global Security in
the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance
with this Indenture (including applicable restrictions on transfer set forth
herein, if any) and the procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN
A GLOBAL SECURITY FOR A DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest
in a Global Security may upon request exchange such beneficial interest
for a Definitive Security. Upon receipt by the Trustee of written
instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Security, and upon receipt by
the Trustee of a written instruction or such other form of instructions
as is customary for the Depositary or the Person designated by the
Depositary as having such a beneficial interest in a Transfer
Restricted Security only, the following additional information and
documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Per son designated by the Depositary as
being the beneficial owner, a certification from the
transferor to that effect (in substantially the form set forth
on the reverse of the Security); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (within the
meaning of Rule 144A promulgated under the Securities Act),
that is aware that any sale of Securities to it will be made
in reliance on Rule 144A under the Securities Act and that is
acquiring such
27
beneficial interest in the Transfer Restricted Security for
its own account or the account of another such "qualified
institutional buyer", a certification to that effect from the
transferor (in substantially the form set forth on the reverse
of the Security); or
(C) if such beneficial interest is being
transferred pursuant to an exemption from registration in
accordance with Rule 144, or outside the United States in an
offshore transaction in compliance with Rule 904 under the
Securities Act, or pursuant to an effective registration
statement under the Securities Act, a certification from the
transferor to that effect (in substantially the form set forth
on the reverse of the Security); or
(D) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act and in
accordance with all applicable securities laws of the States
of the United States, a certification to that effect from the
transferor (in substantially the form set forth on the reverse
of the Security) and an Opinion of Counsel from the transferee
or transferor reasonably acceptable to the Company and to the
Registrar, if the Company so requests, to the effect that
such transfer is in compliance with the Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, the aggregate principal amount of the Global Security to be
reduced and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of an Officers'
Certificate, the Trustee's authenticating agent will authenticate and
deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in
exchange for a beneficial interest in a Global Security pursuant to
this Section 2.6(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall deliver such Definitive Securities to
the persons in whose names such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND
EXCHANGE OF GLOBAL SECURITIES. Notwithstanding any other provisions of this
Indenture (other than the provisions set forth in subsection (f) of this
Section 2.6), a Global Security may not be transferred as a whole except by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
28
(f) AUTHENTICATION OF DEFINITIVE
SECURITIES IN ABSENCE OF DEPOSITARY. If at any time:
(i) the Depositary for the Securities
notifies the Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed by the
Company within ninety days after delivery of such notice; or
(ii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance
of Definitive Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Securities,
will, or its authenticating agent will, authenticate and deliver Definitive
Securities, in an aggregate principal amount equal to the principal amount of
the Global Securities, in exchange for such Global Securities.
(g) Legends.
(i) Except as permitted by the following
paragraph (ii), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities issued in
exchange therefor or substitution thereof) shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, OR (C)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1)(2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT, AN "IAI").
29
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF THE SECURITIES ACT, (D) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR
TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE
COMPANY SO REQUESTS, THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE
COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTAN TIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO RE-
30
FUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF
THE FOREGOING.
(ii) Upon any sale or transfer of a
Transfer Restricted Security (including any Transfer Restricted
Security represented by a Global Security) pursuant to Rule 144
under the Act or an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Security that does not bear the
legend set forth above and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(B) any such Transfer Restricted Security
represented by a Global Security shall not be subject to the
provisions set forth in (i) above (such sales or transfers
being subject only to the provisions of Section 2.6(c)
hereof); PROVIDED, HOWEVER, that with respect to any request
for an exchange of a Transfer Restricted Security that is
represented by a Global Security for a Definitive Security
that does not bear a legend, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in writing to
the Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the form
set forth on the reverse of the Security).
(h) CANCELLATION AND/OR ADJUSTMENT OF
GLOBAL SECURITY. At such time as all beneficial interests in a Global
Security have either been exchanged for Definitive Securities, redeemed,
repurchased or cancelled, such Global Security shall be returned to or
retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged
for Definitive Securities, redeemed, repurchased or cancelled, the principal
amount of Securities represented by such Global Security shall be reduced and
an endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS
AND EXCHANGES OF DEFINITIVE SECURITIES.
(i) To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee or any
authenticating agent of the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's request.
31
(ii) No service charge shall be made to a
Holder for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments, or similar
governmental charge payable upon exchanges or transfers pursuant to
Section 2.2 (fourth paragraph), 2.10, 3.7, 4.14 (clause 8 of the sixth
paragraph), 9.5, or 10.1 hereof).
(iii) The Registrar shall not be required
to register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III,
except the unredeemed portion of any Definitive Security being redeemed
in part, or (b) any Security for a period beginning 15 Business Days
before the mailing of a notice of an offer to repurchase pursuant to
Article X or Section 4.14 hereof or redemption of Securities pursuant
to Article III hereof and ending at the close of business on the day
of such mailing.
(iv) 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
Security (including any transfers between or among Depositary
participants or beneficial owners of interests in any Global Security)
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 thereof.
SECTION 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims and submits an affidavit or other evidence,
satisfactory to the Trustee, to the Trustee to the effect that the Security has
been lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's requirements
are met. If required by the Trustee or the Company, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for its reasonable, out-of-pocket expenses in replacing a
Security.
Every replacement Security is an additional obligation of the
Company.
32
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities
that have been authenticated by the Trustee (including any Security
represented by a Global Security) except those cancelled by it, those
delivered to it for cancellation, those reductions in the interest in a
Global Security effected by the Trustee hereunder and those described in this
Section 2.8 as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security, except
as provided in Section 2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof
(other than a mutilated Security surrendered for replacement), it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a BONA FIDE purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement
thereof pursuant to Section 2.7 hereof.
If on a Redemption Date or the Maturity Date the Paying
Agent (other than the Company or an Affiliate of the Company) holds cash
sufficient to pay all of the principal and interest and premium, if any, due
on the Securities payable on that date and payment of the Securities called
for redemption is not otherwise prohibited, then on and after that date such
Securities cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required
principal amount of Securities have concurred in any direction, amendment,
supplement, waiver or consent, Securities owned by the Company or Affiliates
of the Company shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Securities that a
Trust Officer of the Trustee knows are so owned shall be disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until Definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of Definitive
Securities but may have variations that the Company reasonably and in good
faith consider appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall, upon receipt of a
written order of the Company in the form of an Officers' Certificate,
authenticate Definitive Securities in
33
exchange for temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as permanent Securities authenticated and delivered hereunder.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Securities surrendered to them for registration, transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent (other than the Company or an Affiliate of the
Company), and no one else, shall cancel and, without the written direction of
the Company to the contrary, shall dispose of all Securities surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.7 hereof,
the Company may not issue new Securities to replace Securities that have been
paid or delivered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section 2.11 hereof, except as expressly permitted in the
form of Securities and as permitted by this Indenture.
SECTION 2.12. DEFAULTED INTEREST.
Interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be
paid to the person in whose name that Security (or one or more predecessor
Securities) is registered at the close of business on the Record Date for
such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus any
interest payable on the defaulted interest at the rate and in the manner
provided in Section 4.1 hereof and the Security (herein called "Defaulted
Interest"), shall forthwith cease to be payable to the registered holder on
the relevant Record Date, or, as applicable, the Special Record Date (as
defined below), and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee and the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date
of the proposed
34
payment, and at the same time the Company shall deposit with the Paying
Agent an amount of cash equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Paying Agent for such deposit prior to the date of
the proposed payment, such cash when deposited to be held in trust for
the benefit of the persons entitled to such Defaulted Interest as
provided in this clause (1). Thereupon the Paying Agent shall fix a
special record date for the payment of such Defaulted Interest (a
"Special Record Date"), which shall be not more than 15 days, and not
less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Paying Agent of the notice
of the proposed payment. The Paying Agent shall promptly notify the
Company and the Trustee of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security register not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any
Defaulted Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee and the Paying Agent
of the proposed payment pursuant to this clause, such manner shall be
deemed practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon the registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Securities 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 Securities or as
contained in any notice of a redemption and that reliance may be placed only
on the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect
35
in or omission of such numbers. The Company will promptly notify the Trustee
of any change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by the provisions of
this Indenture, shall be made in accordance with such provisions and this
Article III. The Company shall not have the right to redeem any Securities
prior to April 15, 2002, other than as provided in the next paragraph and
Paragraph 5 of the Securities. On or after April 15, 2002, the Company shall
have the right to redeem all or any part of the Securities for cash at the
Redemption Prices specified in the form of Security attached as Exhibit A set
forth therein in Paragraph 5 thereof, in each case (subject to the right of
Holders of record on a Record Date to receive interest due on an Interest
Payment Date that is on or prior to such Redemption Date, and subject to the
provisions set forth in Section 3.5), including accrued and unpaid interest
and Liquidated Damages, if any, thereon to the Redemption Date.
Notwithstanding the foregoing, until April 15, 2001, upon
an Initial Public Equity Offering of common stock for cash of the Company, up
to 35% of the aggregate principal amount of the Securities originally
outstanding may be redeemed at the option of the Company within 90 days of
such Initial Public Equity Offering, on not less than 30 days, but not more
than 60 days, notice to each holder of the Securities to be redeemed, with
cash from the Net Cash Proceeds to the Company of such Initial Public Equity
Offering, at a redemption price equal to 110.125% of principal, (subject to
the right of Holders of record on a Record Date to receive interest due on an
Interest Payment Date that is on or prior to such Redemption Date) together
with accrued and unpaid interest and Liquidated Damages, if any, to the date
of redemption; PROVIDED, HOWEVER, that at least 65% of the aggregate
principal amount of the Securities originally outstanding remain outstanding
immediately following such redemption.
Except as provided in this paragraph and Paragraph 5 of the
Securities, the Securities may not otherwise be redeemed at the option of the
Company.
36
SECTION 3.2. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to
Paragraph 5 of the Securities, it shall notify the Trustee and the Paying
Agent in writing of the Redemption Date and the principal amount of
Securities to be redeemed and whether it wants the Paying Agent to give
notice of redemption to the Holders.
If the Company elects to reduce the principal amount of
Securities to be redeemed pursuant to Paragraph 5 of the Securities by
crediting against any such redemption Securities it has not previously
delivered to the Trustee and the Paying Agent for cancellation, it shall so
notify the Trustee, in the form of an Officers' Certificate, and the Paying
Agent of the amount of the reduction and deliver such Securities with such
notice.
The Company shall give each notice to the Trustee and the
Paying Agent provided for in this Section 3.2 at least 40 days before the
Redemption Date (unless a shorter notice shall be satisfactory to the Trustee
and the Paying Agent). Any such notice may be cancelled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be
void and of no effect.
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed
pursuant to Paragraph 5 thereof, the Trustee shall select the Securities to
be redeemed on a PRO RATA basis, by lot or by such other method as the
Trustee shall determine to be appropriate and fair and in such manner as
complies with any applicable Depositary, legal and stock exchange
requirements.
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall promptly
notify the Company and the Paying Agent in writing of the Securities selected
for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities in
denominations of $1,000 may be redeemed only in whole. The Trustee may select
for redemption portions (equal to $1,000 or any integral multiple thereof) of
the principal of Securities that have denominations larger than $1,000.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption.
SECTION 3.4. NOTICE OF REDEMPTION.
37
At least 30 days, but not more than 60 days prior to the
Redemption Date, the Company shall mail a notice of redemption by first class
mail, postage prepaid, to the Trustee, the Paying Agent and each Holder whose
Securities are to be redeemed. At the Company's request, the Paying Agent
shall give the notice of redemption in the Company's name and at the
Company's expense. Each notice for redemption shall identify the Securities
to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including accrued
and unpaid interest and Liquidated Damages, if any, to be paid upon
such redemption;
(3) the name and address of the Paying Agent
and the Registrar;
(4) that Securities called for redemption
must be surrendered to the Paying Agent at the address specified in
such notice to collect the Redemption Price;
(5) that, unless (a) the Company defaults in
its obligation to deposit with the Paying Agent cash which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms shall provide the amount to fund the
Redemption Price in accordance with Section 3.6 hereof or (b) such
redemption payment is prohibited, interest on Securities called for
redemption ceases to accrue on and after the Redemption Date and the
only remaining right of the Holders of such Securities is to receive
payment of the Redemption Price, including accrued and unpaid interest
(and Liquidated Damages, if any) to the Redemption Date, upon surrender
to the Paying Agent of the Securities called for redemption and to be
redeemed;
(6) if any Security is being redeemed in
part, the portion of the principal amount, equal to $1,000 or any
integral multiple thereof, of such Security to be redeemed and that,
after the Redemption Date, and upon surrender of such Security, a new
Security or Securities in aggregate principal amount equal to the
unredeemed portion thereof shall be issued;
(7) if less than all the Securities are to
be redeemed, the identification of the particular Securities (or
portion thereof) to be redeemed, as well as the
38
aggregate principal amount of such Securities to be redeemed and the
aggregate principal amount of Securities to be outstanding after such
partial redemption;
(8) the CUSIP number of the Securities to
be redeemed; and
(9) that the notice is being sent
pursuant to this Section 3.4 and pursuant to the optional redemption
provisions of Paragraph 5 of the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with
Section 3.4 hereof, Securities called for redemption become due and payable
on the Redemption Date and at the Redemption Price, including accrued and
unpaid interest (and Liquidated Damages, if any) to the Redemption Date. Upon
surrender to the Trustee or Paying Agent, such Securities called for
redemption shall be paid at the Redemption Price, including interest and
Liquidated Damages, if any, accrued and unpaid to the Redemption Date;
PROVIDED that if the Redemption Date is after a regular Record Date and on or
prior to the Interest Payment Date, to which such Record Date relates, the
accrued interest (and Liquidated Damages, if any) shall be payable to the
Holder of the redeemed Securities registered on the relevant Record Date; and
PROVIDED, FURTHER, that if a Redemption Date is a Legal Holiday, payment
shall be made on the next succeeding Business Day and no interest shall
accrue for the period from such Redemption Date to such succeeding Business
Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.
No later than 11:00 a.m. (New York time) on the Redemption
Date, the Company shall deposit in same day funds with the Paying Agent
(other than the Company or an Affiliate of the Company) cash sufficient to
pay the Redemption Price of all Securities to be redeemed on such Redemption
Date (other than Securities or portions thereof called for redemption on
that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any cash
so deposited which is not required for that purpose upon the written request
of the Company.
If the Company complies with the preceding paragraph and
payment of the Securities called for redemption is not prohibited for any
reason, interest on the Securities to be redeemed shall cease to accrue on
the applicable Redemption Date, whether or not such Securities are presented
for payment. Notwithstanding anything herein to the contrary, if any Security
surrendered for redemption in the manner provided in the Securities shall not
be so
39
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall continue to accrue and be
paid from the Redemption Date until such payment is made on the unpaid
principal, and, to the extent lawful, on any interest not paid on such unpaid
principal, in each case at the rate and in the manner provided in Section 4.1
hereof and the Security.
SECTION 3.7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in
part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder, without service charge to the Holder, a new Security
or Securities equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest (and
Liquidated Damages, if any) on the Securities on the dates and in the manner
provided herein and in the Securities. An installment of principal of or
interest (or Liquidated Damages, if any) on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent (other
than the Company or an Affiliate of the Company) holds for the benefit of the
Holders (on or before 10:00 a.m. New York City time to the extent necessary
to provide the funds to the Depository in accordance with the Depository's
procedures) on that date cash deposited and designated for and sufficient to
pay the installment.
The Company shall pay interest on overdue principal and on
overdue installments of interest (and Liquidated Damages, if any) at the
rate specified in the Securities compounded semi-annually, to the extent
lawful.
40
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this Indenture
may be served. The Company and the Guarantors shall give prompt written notice
to the Trustee and the Paying Agent of the location, and any change in the
location, of such office or agency. If at any time the Company and the
Guarantors shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee and the Paying Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.2 hereof.
The Company and the Guarantors may also from time to time designate
one or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee and the Paying Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby initially designates the Corporate Trust Office of the Trustee as
such office.
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, make any Restricted Payment if,
after giving effect to such Restricted Payment on a PRO FORMA basis, (1) a
Default or an Event of Default shall have occurred and be continuing, (2) the
Company is not permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio in Section 4.11 or (3) the aggregate
amount of all Restricted Payments made by the Company and its Subsidiaries,
including after giving effect to such proposed Restricted Payment, from and
after the Issue Date, would exceed, without duplication, the sum of (a) 50% of
the aggregate Consolidated Net Income of the Company for the period (taken as
one accounting period), commencing on the first day of the first full fiscal
quarter commencing after the Issue Date, to and including the last day of the
fiscal quarter ended immediately prior to the date of each such calculation (or,
in the event Consolidated Net Income for such period is a deficit, then minus
100% of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company from a Capital Contribution or the sale of its Qualified Capital Stock
(other than (i) to a Subsidiary of the Company, (ii) to the extent applied in
connection with a Qualified Exchange and (iii) to the
41
extent credited in (v) and (w) in the following paragraph), after the Issue
Date, plus (c) other than amounts credited pursuant to clause (v) of the next
following paragraph, the net amount of any Restricted Investments (not to
exceed the original amount of such Investment) made after the Issue Date that
are returned to the Company or the Guarantor that made such prior Investment,
without restriction in cash on or prior to the date of any such calculation.
The foregoing clauses (2) and (3) of the immediately preceding
paragraph, however, will not prohibit (v) Restricted Investments in a Related
Business, PROVIDED, that, after giving PRO FORMA effect to such Investment,
the aggregate amount of all such Investments made on or after the Issue Date
that are outstanding (after giving effect to any such Investments that are
returned to the Company or the Subsidiary Guarantor that made such prior
Investment, without restriction, in cash on or prior to the date of any such
calculation) at any time does not exceed $4.0 million, (w) repurchases of
Capital Stock from employees of the Company or its Subsidiaries upon the
death, disability or termination of employment in an aggregate amount to all
employees not to exceed $300,000 in any fiscal year or $1.5 million in the
aggregate on and after the Issue Date net of the Net Cash Proceeds received
by the Company from subsequent reissuances of such Qualified Capital Stock to
new employees that are not Excluded Persons, and the provisions of the
immediately preceding paragraph will not prohibit, (x) a Qualified Exchange,
(y) the payment of any dividend on Qualified Capital Stock within 60 days
after the date of its declaration if such dividend could have been made on
the date of such declaration in compliance with the foregoing provisions or
(z) Permitted Payments to Parent. The full amount of any Restricted Payment
made pursuant to the foregoing clauses (v), (w), (y) and (z) (but not
pursuant to clause (x)) of the immediately preceding sentence, however, will
be deducted in the calculation of the aggregate amount of Restricted Payments
available to be made referred to in clause (3) of the immediately preceding
paragraph.
In addition, the Company and the Guarantors will not, and will not
permit any of their Subsidiaries to, directly or indirectly, make any
Management Fee Payment or similar payment to Affiliates (other than
Subsidiaries) other than Permitted Payments to Parent if, after giving effect
to such Management Fee Payments or similar payments, on a PRO FORMA basis
after giving effect to such payment, a Default or an Event of Default shall
have occurred and be continuing.
For purposes of this covenant, the amount of any Restricted
Payment, if other than in cash, shall be the fair market value thereof, as
determined in the good faith reasonable judgment of the Board of Directors of
the Company. Additionally, on the date of each Restricted Payment, the
Company shall deliver an Officers' Certificate to the Trustee describing in
reasonable detail the nature of such Restricted Payment, stating the amount
of such Restricted Payment, stating in reasonable detail the provisions of
this Indenture pursuant to which such Restricted Payment was made and
certifying that such Restricted Payment was made in compliance with the terms
of this Indenture.
42
SECTION 4.4. CORPORATE AND PARTNERSHIP EXISTENCE.
Except as otherwise permitted by Article V, Section 4.14 or Section
11.4, the Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their respective
corporate, partnership or other organizational existence, as the case may be,
and the corporate, partnership or other organizational existence, as the case
may be, of each of their Subsidiaries in accordance with the respective
organizational documents of each of them and the material rights (charter and
statutory) and material corporate franchises of the Company, the Guarantors and
each of their respective Subsidiaries; PROVIDED, HOWEVER, that neither the
Company nor any Guarantor shall be required to preserve, with respect to
themselves, any right or franchise, and with respect to any of their respective
Subsidiaries, any such existence, right or franchise, if (a) the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and (b) the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or any of their respective properties and assets and (ii)
all lawful claims, whether for labor, materials, supplies or services, which
have become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Guarantor or any of their Subsidiaries;
PROVIDED, HOWEVER, that neither the Company nor any Guarantor shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been established in accordance with GAAP.
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company and the Guarantors shall cause all material properties
used or useful to the conduct of their business and the business of each of
their Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section 4.6 shall
43
prevent the Company or any Guarantor from discontinuing any operation or
maintenance of any of such properties, or disposing of any of them, if such
discontinuance or disposal is (a)(i) in the judgment of the Company,
desirable in the conduct of the business of the Company and (ii) not adverse
in any material respect to the Holders or (b) otherwise permitted under
Section 4.14.
The Company and the Guarantors shall provide, or cause to be provided,
for themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries in a prudent manner, with (except for self-insurance)
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of the
Company, the Guarantors and such Subsidiaries in a prudent manner for entities
similarly situated in the industry.
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120
days after the end of its fiscal year an Officers' Certificate, one of the
signers of which shall be the principal executive, principal financial or
principal accounting officer of the Company, complying with Section 314(a)(4) of
the TIA and stating that a review of its activities and the activities of its
Subsidiaries, if any, during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture (without regard to notice requirements or grace periods) and further
stating, as to each such Officer signing such certificate, whether or not the
signer knows of any failure by the Company, any Guarantor or any Subsidiary of
the Company to comply with any conditions or covenants in this Indenture and, if
such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity. The Officers' Certificate shall also
notify the Trustee should the relevant fiscal year end on any date other than
the current fiscal year end date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto. The Trustee shall not be deemed to have knowledge of any
Default, any Event of Default or any such fact unless one of its Trust Officers
receives written notice thereof from the Company or any of the Holders.
44
SECTION 4.8. REPORTS.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and, to each Holder and to prospective purchasers of Securities
identified to the Company by an Initial Purchaser, within 15 days after it is or
would have been (if it were subject to such reporting obligations) required to
file such with the Commission, (i) all annual and quarterly financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the Commission on Forms 10-K and 10-Q, if the Company were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the Commission and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports; and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, unless the Commission shall not accept such reports,
file with the Commission the annual, quarterly and other reports which it is or
would have been required to file with the Commission.
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company and the Guarantors shall not and shall not permit any of
their Subsidiaries to become required to register as an "investment company" (as
that term is defined in the Investment Company Act of 1940, as amended), or
otherwise become subject to regulation under the Investment Company Act.
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Neither the Company nor any of its Subsidiaries shall be permitted on
or after the Issue Date to enter into or suffer to exist any contract,
agreement, arrangement or transaction with any Affiliate (an "Affiliate
Transaction"), or any series of related Affiliate Transactions, (other than
Exempted Affiliate Transactions), (i) unless it is determined that the terms of
such Affiliate Transaction are fair and reasonable to the Company, and no less
favorable to the Company, than could have been obtained in an arm's length
transaction with a non-Affiliate, and (ii) if involving consideration to either
party in excess of $1.0 million, unless such Affiliate Transaction(s) is
evidenced by an Officers' Certificate addressed and delivered to the Trustee
certifying that such Affiliate Transaction (or Transactions) has been approved
by a majority of the members of the Board of Directors that are disinterested in
such transaction and (iii) if involving consideration to either party in excess
of $5.0 million, unless in addition the Company, prior to the consummation
thereof, obtains a written favorable
45
opinion as to the fairness of such transaction to the Company from a
financial point of view from an independent investment banking firm of
national reputation or, if pertaining to a matter for which such investment
banking firms do not customarily render such opinions, an appraisal or
valuation firm of national reputation.
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth in this covenant, the Company and the Guarantors
shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly, issue, assume, guaranty, incur, become directly or indirectly liable
with respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur" or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness), other than
Permitted Indebtedness. Notwithstanding the foregoing if (i) no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a PRO FORMA basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving effect
on a PRO FORMA basis to such incurrence of such Indebtedness or Disqualified
Capital Stock and, to the extent set forth in the definition of Consolidated
Coverage Ratio, the use of proceeds thereof, would be at least 2 to 1 (as
applicable, each the "Debt Incurrence Ratio"), then the Company may incur such
Indebtedness or Disqualified Capital Stock and the Guarantors may incur such
Indebtedness (other than Disqualified Capital Stock).
In addition, the foregoing limitations will not apply to:
(a) the incurrence by the Company or any Guarantor of Purchase Money
Indebtedness, PROVIDED, that (i) the aggregate principal amount of such
Indebtedness incurred on or after the Issue Date and outstanding at any time
pursuant to this paragraph (a) (including any Refinancing Indebtedness and other
Indebtedness issued to refinance, replace, defease or refund such Indebtedness)
shall not exceed $2.0 million, and (ii) in each case, such Indebtedness shall
not constitute more than 100% of the cost (determined in accordance with GAAP)
to the Company or such Guarantor, as applicable, of the property so purchased or
leased;
(b) if no Event of Default shall have occurred and be continuing, the
incurrence by the Company or any Guarantor of Indebtedness in an aggregate
principal amount outstanding at any time (including Refinancing Indebtedness and
other Indebtedness incurred to refinance, replace, defease or refund such
Indebtedness) of up to $5.0 million;
46
(c) the incurrence by the Company or any Guarantor of Mortgage
Indebtedness or Indebtedness pursuant to the Credit Agreement up to an aggregate
principal amount outstanding under the Credit Agreement or of Mortgage
Indebtedness collectively (in each case including any Refinancing Indebtedness
and other Indebtedness incurred to refinance, replace, defease or refund such
Indebtedness) not to exceed in the aggregate $12.0 million, PROVIDED, THAT
(A) in the case of Indebtedness pursuant to the Credit Agreement minus the
amount of any such Indebtedness (i) retired with the Net Cash Proceeds from any
Asset Sale applied to permanently reduce the outstanding amounts or the
commitments with respect to such Indebtedness pursuant to clause (1)(b)(ii) of
the first paragraph of Section 4.14 or (ii) assumed by a transferee in an Asset
Sale, and (B) in the case of Mortgage Indebtedness such Indebtedness shall not
constitute more than 100% of the cost (determined in accordance with GAAP) to
the Company or such Guarantor, as applicable, of such mortgaged real estate
asset.
Indebtedness or Disqualified Capital Stock of any Person which is
outstanding at the time such Person becomes a Subsidiary of the Company
(including upon designation of any subsidiary or other person as a Subsidiary)
or is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company, as applicable.
Upon each incurrence of Indebtedness, the Company may designate under
which provision of this covenant such Indebtedness is being incurred and such
Indebtedness should be deemed to have been so incurred under such provision and
no other provision of this covenant except as specifically provided otherwise.
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, create, assume or suffer to exist
any consensual restriction on the ability of any Subsidiary of the Company to
pay dividends or make other distributions to or on behalf of, or to pay any
obligation to or on behalf of, or otherwise to transfer assets or property to or
on behalf of, or make or pay loans or advances to or on behalf of, the Company
or any Subsidiary of the Company, except (a) restrictions imposed by the
Securities or this Indenture or by other indebtedness of the Company (which may
also be guaranteed by the Guarantors) ranking senior or PARI PASSU with the
Securities or the guarantees, as applicable, provided such restrictions are no
more restrictive than those imposed by this Indenture and the Securities,
(b) restrictions imposed by applicable law, (c) existing restrictions under
Indebtedness outstanding on the Issue Date, including pursuant to the Credit
Agreement, (d) restrictions under any Acquired Indebtedness not incurred in
violation of this
47
Indenture or any agreement relating to any property, asset, or business
acquired by the Company or any of its Subsidiaries, which restrictions in
each case existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable
to any person, other than the person acquired, or to any property, asset or
business, other than the property, assets and business so acquired, (e) any
such restriction or requirement imposed by Indebtedness incurred under the
Credit Agreement pursuant to Section 4.11 provided such restriction or
requirement is no more restrictive than that imposed by the Credit Agreement
as of the Issue Date, (f) restrictions with respect solely to a Subsidiary of
the Company imposed pursuant to a binding agreement which has been entered
into for the sale or disposition of all or substantially all of the Equity
Interests or assets of such Subsidiary, provided such restrictions apply
solely to the Equity Interests or assets of such Subsidiary which are being
sold (g) restrictions on transfer contained in Purchase Money Indebtedness or
Mortgage Indebtedness incurred pursuant to Section 4.11 provided such
restrictions relate only to the transfer of the property acquired with the
proceeds of such Purchase Money Indebtedness or Mortgage Indebtedness, as
applicable and (h) in connection with and pursuant to permitted Refinancings,
replacements of restrictions imposed pursuant to clauses (a), (c) or (d) of
this paragraph that are not more restrictive than those being replaced and do
not apply to any other person or assets than those that would have been
covered by the restrictions in the Indebtedness so refinanced.
Notwithstanding the foregoing, neither (a) customary provisions restricting
subletting or assignment of any lease entered into in the ordinary course of
business, consistent with industry practice, nor (b) Liens permitted under
the terms of this Indenture on assets securing Senior Debt, Purchase Money
Indebtedness, or Mortgage Indebtedness incurred in accordance with Section
4.11 shall in and of themselves be considered a restriction on the ability of
the applicable Subsidiary to transfer such agreement or assets, as the case
may be.
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS.
The Company and the Guarantors shall not, and shall not permit any
of their Subsidiaries to, directly or indirectly, incur, or suffer to exist
any Indebtedness (other than the Securities) that is subordinate in right of
payment to any other Indebtedness of the Company or a Guarantor unless, by
its terms, such Indebtedness is subordinate in right of payment to, or ranks
PARI PASSU with, the Securities or the Guarantees, as applicable.
SECTION 4.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, in one or a series of related transactions, convey, sell,
transfer, assign or otherwise dispose of, directly or indirectly, any of its
property, business or assets, including by merger or consolidation (in the case
of a Subsidiary of the Company), and including any sale or other transfer or
issuance of any Equity Interests of any Subsidiary of the Company,
48
whether by the Company or a Subsidiary of either or through the issuance,
sale or transfer of Equity Interests by a Subsidiary of the Company, and
including any sale and leaseback transaction (any of the foregoing, an "Asset
Sale"), unless (l)(a) the Net Cash Proceeds therefrom (the "Asset Sale Offer
Amount") are applied (i) within 270 days after the date of such Asset Sale to
the optional redemption of the Securities in accordance with the terms of
this Indenture and other Indebtedness of the Company ranking on a parity with
the Securities and with similar provisions requiring the Company to redeem
such Indebtedness with the proceeds for asset sales, pro rata in proportion
to the respective principal amounts (or accreted values in the case of
Indebtedness issued with an original issue discount) of the Securities and
such other Indebtedness then outstanding or (ii) within 300 days after the
date of such Asset Sale to the repurchase of the Securities and such other
Indebtedness on a parity with the Securities and with similar provisions
requiring the Company to make an offer to purchase such Indebtedness with the
proceeds for asset sales pursuant to a cash offer (subject only to conditions
required by applicable law, if any) (pro rata in proportion to the respective
principal amounts (or accreted values in the case of Indebtedness issued with
an original issue discount) of the Securities and such other Indebtedness
then outstanding) (the "Asset Sale Offer") at a purchase price of 100% of
principal amount (or accreted value in the case of Indebtedness issued with
an original issue discount) (the "Asset Sale Offer Price") together with
accrued and unpaid interest and Liquidated Damages, if any, to the date of
payment, made within 270 days of such Asset Sale or (b) within 270 days
following such Asset Sale, the Asset Sale Offer Amount is (i) invested (or
committed, pursuant to a binding commitment subject only to reasonable,
customary closing conditions, to be invested, and in fact is so invested,
within an additional 90 days) in tangible assets and property other than
notes, bonds, obligations and securities) which in the good faith reasonable
judgment of the Board will immediately constitute or be a part of a Related
Business of the Company or such Subsidiary (if it continues to be a
Subsidiary) immediately following such transaction or (ii) used to retire
Purchase Money Indebtedness, Mortgage Indebtedness or Senior Debt and, to
permanently reduce (in the case of Senior Debt that is not Purchase Money
Indebtedness or Mortgage Indebtedness) the amount of such Indebtedness,
incurred under Section 4.11 hereof (including that in the case of a revolver
or similar arrangement that makes credit available, such commitment is so
permanently reduced by such amount), (2) at least 90% of the consideration
for such Asset Sale or series of related Asset Sales consists of cash or Cash
Equivalents, (3) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect, on a PRO FORMA
basis, to, such Asset Sale, and (4) the Board of Directors of the Company
determines in good faith that the Company or such Subsidiary, as applicable,
receives fair market value for such Asset Sale.
Notwithstanding, and without complying with, the provisions of this
covenant:
(i) the Company and its Subsidiaries may, in the ordinary course
of business, (1) convey, sell, transfer, assign or otherwise dispose of
inventory and other
49
assets acquired and held for resale in the ordinary course of business and
(2) liquidate Cash Equivalents;
(ii) the Company and its Subsidiaries may convey, sell, transfer,
assign or otherwise dispose of assets pursuant to and in accordance with
Section 5.1;
(iii) the Company and its Subsidiaries may sell or dispose of
damaged, worn out, scrap or other obsolete property in the ordinary course
of business so long as such property is no longer necessary for the proper
conduct of the business of the Company or such Subsidiary, as applicable;
and
(iv) the Company and the Guarantors may convey, sell, transfer,
assign or otherwise dispose of assets to the Company or any of its wholly
owned Guarantors;
(v) the Company and its Subsidiaries, in the ordinary course of
business, may convey, sell, transfer, assign, or otherwise dispose of
assets (or related assets in related transactions) with a fair market value
of less than $250,000; and
(vi) the Company and each of its Subsidiaries may surrender or
waive contract rights or settle, release or surrender contract, tort or
other claims of any kind or grant Liens not prohibited by this Indenture;
An acquisition of Securities pursuant to an Asset Sale Offer may be
deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to
the uses set forth in 1(a)(i) or 1(b) above (the "Excess Proceeds") exceeds
$5.0 million and that each Asset Sale Offer shall remain open for 20 Business
Days following its commencement (the "Asset Sale Offer Period"). Upon expiration
of the Asset Sale Offer Period, the Company shall apply the Asset Sale Offer
Amount plus an amount equal to accrued and unpaid interest and Liquidated
Damages, if any, to the purchase of all Indebtedness properly tendered (on a PRO
RATA basis if the Asset Sale Offer Amount is insufficient to purchase all
Indebtedness so tendered) at the Asset Sale Offer Price (together with accrued
interest and Liquidated Damages, if any). To the extent that the aggregate
amount of Securities and such other PARI PASSU Indebtedness tendered pursuant to
an Asset Sale Offer is less than the Asset Sale Offer Amount, the Company may
use any remaining Net Cash Proceeds for general corporate purposes as otherwise
permitted by this Indenture and following each Asset Sale Offer the Excess
Proceeds amount shall be reset to zero. For purposes of (2) above, total
consideration received means the total consideration received for such Asset
Sales minus the amount of, (a) Purchase Money Indebtedness or Mortgage
Indebtedness secured solely by the assets sold and assumed by a transferee and
50
(b) property that within 30 days of such Asset Sale is converted into cash or
Cash Equivalents, PROVIDED that such cash and Cash Equivalents shall be treated
as Net Cash Proceeds attributable to the original Asset Sale for which such
property was received.
All Net Cash Proceeds from an Event of Loss relating to a Material
Facility shall be invested, used for prepayment of Senior Indebtedness or used
to repurchase Securities, all within the period and as otherwise provided above
in clauses 1(a) or 1(b)(i) of the first paragraph of this Section 4.14 plus 90
days.
In addition to the foregoing and notwithstanding anything herein to
the contrary, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly make any Asset Sale of any of the Equity
Interests of any Subsidiary of the Company (other than the Company or a Wholly
Owned Subsidiary Guarantor) except pursuant to an Asset Sale of all the Equity
Interests of such Subsidiary.
Notice of an Asset Sale Offer shall be sent, on or prior to the
commencement of the Asset Sale Offer, by first-class mail, by the Company to
each Holder at its registered address, with a copy to the Trustee. The notice
to the Holders shall contain all information, instructions and materials
required by applicable law or otherwise material to such Holders' decision to
tender Securities pursuant to the Asset Sale Offer. The notice, which (to the
extent consistent with this Indenture) shall govern the terms of an Asset Sale
Offer, shall state:
(1) that the Asset Sale Offer is being made pursuant
to such notice and this Section 4.14;
(2) the Asset Sale Offer Amount, the Asset Sale Offer
Price (including the amount of accrued but unpaid interest (and
Liquidated Damages, if any)), and the date of purchase;
(3) that any Security or portion thereof not tendered
or accepted for payment will continue to accrue interest if interest
is then accruing;
(4) that, unless the Company defaults in depositing
cash with the Paying Agent (which may not for purposes of this Section
4.14, notwithstanding anything in this Indenture to the contrary, be
the Company or any Affiliate of the Company), in accordance with the
last paragraph of this Section 4.14 any Security, or portion thereof,
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Asset Sale Purchase Date;
51
(5) that Holders electing to have a Security, or
portion thereof, purchased pursuant to an Asset Sale Offer will be
required to surrender their Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security completed,
to the Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding any other provision of this Indenture, be the Company
or any Affiliate of the Company) at the address specified in the
notice;
(6) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent receives, prior to
the expiration of the Asset Sale Offer, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his
election to have such principal amount of the Securities purchased;
(7) that if Indebtedness in a principal amount in
excess of the principal amount of Securities to be acquired pursuant
to the Asset Sale Offer are tendered and not withdrawn, the Company
shall purchase Indebtedness on a PRO RATA basis in proportion to the
respective principal amounts (or accreted values in the case of
Indebtedness issued with an original issue discount) thereof (with
such adjustments as may be deemed appropriate by the Company so that
only Securities in denominations of $1,000 or integral multiples of
$1,000 shall be acquired);
(8) that Holders whose Securities were purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding
such Asset Sales.
Any Asset Sale Offer shall be made in compliance with all applicable
laws, rules, and regulations, including, if applicable, Regulation 14E of the
Exchange Act and the rules and regulations thereunder and all other applicable
Federal and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this paragraph,
compliance by the Company or any of its subsidiaries with such laws and
regulations shall not in and of itself cause a breach of its obligations under
such covenant.
52
On or before the date of purchase, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the Asset
Sale Offer (on a PRO RATA basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent cash sufficient to pay the Asset Sale Offer
Price for all Securities or portions thereof so accepted and (iii) deliver to
the Trustee Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Asset Sale Offer Price for such
Securities, and the Company shall promptly issue a new Security and the Trustee,
upon written request of the Company, shall promptly authenticate and mail or
deliver to such Holders such new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.
If the payment date in connection with an Asset Sale Offer hereunder
is on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages,
if any, due on such Interest Payment Date) will be paid to the person in whose
name a Security is registered at the close of business on such Record Date, and
such interest (or Liquidated Damages, if applicable) will not be payable to
Holders who tender Securities pursuant to such Asset Sale Offer.
SECTION 4.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and 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 or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest (or Liquidated Damages, if any) on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not 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 had been enacted.
SECTION 4.16. LIMITATION ON LIENS SECURING INDEBTEDNESS.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, create, incur, assume or suffer to exist any Lien of any
kind, other than Permitted Liens, upon any of their respective assets now owned
or acquired on or after the
53
date of this Indenture or upon any income or profits therefrom securing any
Indebtedness of the Company or any Guarantor other than Senior Indebtedness,
unless the Company provides, and causes its Subsidiaries to provide,
concurrently therewith, that the Securities are equally and ratably so
secured, PROVIDED that, if such Indebtedness is Subordinated Indebtedness,
the Lien securing such Subordinated Indebtedness shall be subordinate and
junior to the Lien securing the Securities with the same relative priority as
such Subordinated Indebtedness shall have with respect to the Securities, and
PROVIDED, FURTHER, that this clause shall not be applicable to any Liens
securing any such Indebtedness which became Indebtedness of the Company
pursuant to a transaction subject to the provisions of this Indenture
described below under Section 5.1 or which constitutes Acquired Indebtedness
and which in either case were in existence at the time of such transaction
(unless such Indebtedness was incurred or such Lien created in connection
with or in contemplation of, such transaction), so long as such Liens do not
extend to or cover any property or assets of the Company or any Subsidiary of
the Company other than property or assets acquired in such transaction.
SECTION 4.17. RULE 144A INFORMATION REQUIREMENT.
The Company shall furnish to the Holders of the Securities, securities
analysts, and prospective purchasers of Securities designated by the Holders of
Transfer Restricted Securities, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as either the Company has concluded an offer to exchange the Exchange
Securities for the Initial Securities or a registration statement relating to
resales of the Securities has become effective under the Securities Act. The
Company shall also furnish such information during the pendency of any
suspension of effectiveness of such resale registration statement.
SECTION 4.18. LIMITATIONS ON LINES OF BUSINESS.
Neither the Company nor any of its Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which, in the reasonable good faith judgment of the
Board of Directors of the Company, is a Related Business.
SECTION 4.19. TRANSACTIONS NOT SUBJECT TO COVENANTS.
Notwithstanding anything to the contrary in this Indenture, the
consummation of the Transactions shall not be prohibited by this Indenture.
54
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into another
person or, directly or indirectly, sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons unless (i) either (a) the Company is the continuing
entity or (b) the resulting, surviving or transferee entity is a corporation
organized under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes by supplemental indenture all of the
obligations of the Company in connection with the Securities and this Indenture;
(ii) no Default or Event of Default shall exist or shall occur immediately after
giving effect on a PRO FORMA basis to such transaction; and (iii) unless such
transaction is solely the merger of the Company and one of its previously
existing Wholly-owned Subsidiaries which is also a Guarantor and which
transaction is not in connection with any other transaction immediately after
giving effect to such transaction on a PRO FORMA basis, the consolidated
resulting, surviving or transferee entity would immediately thereafter be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio set forth in Section 4.11 .
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named therein as the Company, and (except in the case of a
lease) the Company shall be released from the obligations under the Securities
and this Indenture except with respect to any obligations that arise from, or
are related to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties and assets of
one or more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
55
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made, or, in the case of a plan
of liquidation, the entity which receives the greatest value from such plan of
liquidation shall succeed to, and (except in the case of a lease) be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named herein as
the Company, and (except in the case of a lease) when a successor corporation
duly assumes all of the obligations of the Company pursuant hereto and pursuant
to the Securities, the Company shall be released from such obligations (except
with respect to any obligations that arise from, or are related to, such
transaction).
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure by the Company to pay any installment of
interest (or Liquidated Damages, if any) upon the Securities as and when
the same becomes due and payable, and the continuance of any such failure
for a period of 30 days;
(ii) failure by the Company to pay all or any part of the
principal or premium, if any, on the Securities when and as the same
becomes due and payable at maturity, upon redemption, by acceleration, or
otherwise, including, without limitation, payment of the Change of Control
Purchase Price or the Asset Sale Offer Price, or otherwise;
56
(iii) failure by the Company or any Subsidiary to observe
or perform any other covenant or agreement contained in the Securities or
this Indenture and, subject to certain exceptions and the continuance of
such failure for a period of 30 days after written notice is given to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in aggregate principal amount of the Securities outstanding;
(iv) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudicating the Company or any of its
Significant Subsidiaries as bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period
of 60 days; or a decree, judgment or order of a court of competent
jurisdiction appointing a receiver, liquidator, trustee, or assignee in
bankruptcy or insolvency for the Company, any of its Significant
Subsidiaries, or any substantial part of the property of any such Person,
or for the winding up or liquidation of the affairs of any such Person,
shall have been entered, and such decree, judgment, or order shall have
remained in force undischarged and unstayed for a period of 60 days;
(v) the Company or any of its Significant Subsidiaries
shall institute proceedings to be adjudicated a voluntary bankrupt, or
shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization under any
bankruptcy or similar law or similar statute, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
Custodian, receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of it or any substantial part of its assets or property, or
shall make a general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become
due, fail generally to pay its debts as they become due, or take any
corporate action in furtherance of any of the foregoing;
(vi) the failure to pay at final stated maturity (giving
effect to any applicable grace periods) the principal amount of any
Indebtedness of the Company or any Subsidiary of the Company or the
acceleration of the final stated maturity of any Indebtedness if the
aggregate principal amount of such Indebtedness, together with the
principal amount of any such Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $5.0
million or more at any time; and
(vii) final unsatisfied judgments not covered by insurance
for the payment of money, or the issuance of any warrant of attachment
against any portion of
57
the property or assets of the Company or any of its Subsidiaries,
aggregating in excess of $5.0 million, at any one time shall
be rendered against the Company or any of its Subsidiaries and not be
stayed, bonded or discharged for a period (during which execution shall not
be effectively stayed) of 60 days.
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing (other than an Event
of Default specified in Section 6.1(iv) or Section 6.1(v) above relating to the
Company or any Significant Subsidiary), then, and in every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the Holders of 25% in aggregate principal amount of then
outstanding Securities, by notice in writing to the Company (and to the Trustee
if given by Holders) (an "Acceleration Notice"), may declare all principal,
determined as set forth below, and accrued interest (and Liquidated Damages, if
any) thereon to be due and payable immediately; PROVIDED, however, that if any
Senior Debt is outstanding pursuant to the Credit Agreement, upon a declaration
of such acceleration, such principal and interest shall be due and payable upon
the earlier of (x) the third Business Day after the sending to the Company and
the representative of such written notice, unless such Event of Default is cured
or waived prior to such date and (y) the date of acceleration of any Senior Debt
under the Credit Agreement. If an Event of Default specified in clause (iv) or
(v), above, relating to the Company or any of its Significant Subsidiaries
occurs, all principal and accrued interest (and Liquidated Damages, if any)
thereon will be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee cash
sufficient to pay:
(A) all overdue interest and Liquidated Damages, if any, on
all Securities,
58
(B) the principal of (and premium, if any, applicable to)
any Securities which would become due other than by reason of such
declaration of acceleration, and interest thereon at the rate borne by
the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee hereunder and
the compensation, expenses, disbursements and advances of the Trustee
and its agents and counsel, and all other amounts due the Trustee
under Section 7.7 and
(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have become
due solely by such declaration of acceleration, have been cured or waived
as provided in Section 6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to (i) any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend, unless
such default has been waived by such a supermajority. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of
principal, premium or interest (or Liquidated Damages, if any) specified in
clause (i) or (ii) of Section 6.1 hereof occurs and is continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for
principal, premium (if any), and interest (and Liquidated Damages, if any), and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any), and on any overdue
interest (and Liquidated Damages, if any), at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee and its agents and counsel and all
other amounts due the Trustee under Section 7.7.
59
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any (and
Liquidated Damages, if any), or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including
(1) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (and Liquidated Damages, if any) owing and
unpaid in respect of the Securities and to file such 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 and its agent and counsel and all
other amounts due the Trustee under Section 7.7) and of the Holders allowed
in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to
60
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of
the Trustee and its agents and counsel, and any other amounts due the Trustee
under Section 7.7 hereof.
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
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; PROVIDED,
however, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and may be a member
of a creditors' committee.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal, premium
(if any), or interest (or Liquidated Damages, if any), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest (and Liquidated Damages, if
any) on, the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such
61
Securities for principal, premium (if any), and interest (and Liquidated
Damages, if any), respectively; and
THIRD: To the Company, the Guarantors or such other Person as may be
lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate principal
amount of then outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(E) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect,
62
disturb or prejudice the rights of any other Holders, or to obtain or to seek
to obtain priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all the Holders.
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), and interest (and
Liquidated Damages, if any) on, such Security on the Maturity Dates of such
payments as expressed in such Security (in the case of redemption, the
Redemption Price on the applicable Redemption Date, in the case of a Change of
Control, the Change of Control Purchase Price on the Change of Control Purchase
Date, and in the case of an Asset Sale, the Asset Sale Offer Price on the
relevant purchase date) and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.7
hereof, no right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security
to exercise any right or remedy arising upon any Event of Default shall impair
the exercise of any such right or remedy or constitute a waiver of any such
Event of Default. Every right and remedy given by this Article VI or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
63
SECTION 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, PROVIDED, that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee shall not determine and shall have no duty to
ascertain that the action so directed would involve it in personal
liability or would be unjustly prejudicial to the Holders not taking part
in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. WAIVER OF EXISTING OR PAST DEFAULT.
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any existing or past Default or Event of Default
hereunder and its consequences under this Indenture, except a default
(A) in the payment of the principal of, premium, if any, or
interest (or Liquidated Damages, if any) on, any Security as specified in
clauses (i) and (ii) of Section 6.1 hereof and not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder
of each outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
64
SECTION 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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, suffered or omitted to be taken by it
as Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 6.13 shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in aggregate principal amount
of the outstanding Securities, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any), or interest (or
Liquidated Damages, if any) on, any Security on or after the respective Maturity
Date expressed in such Security (including, in the case of redemption, on or
after the Redemption Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 7.1. DUTIES OF TRUSTEE.
65
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent Person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of a Default or an Event
of Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no covenants or
obligations shall be implied in or read into this Indenture which are
adverse to the Trustee, and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
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 liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section 7.1,
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts, and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.11 hereof.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of
66
any of its duties hereunder or to take or omit to take any action under this
Indenture or at the request, order or direction of the Holders or in the
exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of
this Section 7.1.
(f) The Trustee shall not be liable for interest on any
assets received by it except as the Trustee may agree in writing with the
Company (including without limitation to the extent the Trustee receives funds
prior to the interest payment date in order to comply with the provisions of
Section 4.1). Assets held in trust by the Trustee need not be segregated from
other assets except to the extent required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1 hereof:
(a) The Trustee may rely and shall be protected in acting
or refraining from acting on 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 such document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 13.4 and 13.5 hereof. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or advice of counsel.
(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 or
its agent takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by this Indenture.
67
(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company personally or by its agent or attorney.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or any
Guarantor shall be sufficient if signed by an Officer of the Company or such
Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV hereof
or as to the performance by any Agent of its duties hereunder. In addition, the
Trustee shall not be deemed to have knowledge of any Default or Event of Default
except (i) any Event of Default occurring pursuant to Sections 6.1(i), 6.1(ii)
and 4.1 hereof, or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11
hereof.
68
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities or any money paid to the
Company or upon the Company's discretion under any provision of this Indenture,
and it shall not be responsible for any statement or recital herein or any
statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any), of, or interest (or Liquidated
Damages, if any) on, any Security (including the payment of the Change of
Control Purchase Price on the Change of Control Payment Date, the payment of the
Redemption Price on the Redemption Date and the payment of the Asset Sale Offer
Price on the relevant purchase date), the Trustee may withhold the notice if and
so long as a Trust Officer in good faith determines that withholding the notice
is in the interest of the Securityholders.
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each April 15 beginning with the April 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
69
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company and the Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to
indemnify the Trustee (in its capacity as Trustee) and each of its officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or bad faith on the part of the
Trustee, arising out of or in connection with the administration of this trust
and its rights or duties hereunder, including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company and the Guarantors shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's and
the Guarantors' expense in the defense. The Trustee may have separate counsel
and the Company and the Guarantors shall pay the reasonable fees and expenses of
such counsel; PROVIDED, that the Company and the Guarantors will not be required
to pay such fees and expenses if they assume the Trustee's defense and there is
no conflict of interest between the Company and the Guarantors and the Trustee
in connection with such defense. The Company and the Guarantors need not pay
for any settlement made without their written consent; PROVIDED, that such
consent shall not be unreasonably withheld. The Company and the Guarantors need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through its negligence, bad faith or willful
misconduct.
To secure the Company's and the Guarantors' payment obligations in
this Section 7.7, the Trustee shall have a lien prior to the Securities on all
assets held or collected by the Trustee, in its capacity as Trustee, except
assets held in trust to pay principal and premium, if any, of or interest on
particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(iv) or (v) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
70
The Company's and the Guarantors' obligations under this Section
7.7 and any lien arising hereunder shall survive the resignation or removal
of the Trustee, the discharge of the Company's and the Guarantors'
obligations pursuant to Article VIII of this Indenture and any rejection or
termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the
outstanding Securities may remove the Trustee by so notifying the Company and
the Trustee in writing and may appoint a successor trustee with the Company's
consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other public officer takes charge
of the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holder
or Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 hereof have been paid, the retiring Trustee shall transfer all property held
by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7 hereof, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. A successor Trustee shall mail
notice of its succession to each Holder.
71
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1), (2) and (5). The Trustee shall have a combined capital and surplus
of at least $25,000,000 as set forth in its most recent published annual report
of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
72
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may
elect to have Section 8.2, at the Company's option and at any time within one
year of the Maturity Date of the Securities, or Section 8.3, at the Company's
option at any time, of this Indenture applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented and this Indenture shall cease to be of further effect
as to all outstanding Securities and Guarantees, except as to be deemed to be
"outstanding" only for the purposes of Section 8.5 hereof and the other Sections
of this Indenture referred to in (a) and (b) below, and the Company and the
Guarantors shall be deemed to have satisfied all other of their respective
obligations under such Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Securities to receive payments in respect of the principal of,
premium, if any, and interest (and Liquidated Damages, if any) on such
Securities when such payments are due from the trust described in Section 8.5,
(b) the Company's obligations with respect to such Securities under Sections
2.4, 2.6, 2.7, 2.10, 4.2, 8.5, 8.6 and 8.7 hereof and (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's and the
Guarantors' obligations in connection therewith. Subject to compliance with
this Article VIII, the Company may exercise its option under this
73
Section 8.2 notwithstanding the prior exercise of its option under Section
8.3 hereof with respect to the Securities.
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17 and 4.18, Article V and
Article X hereof with respect to the outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities 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.
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities, neither the Company nor any Guarantor need comply with
and shall have any 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, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, Sections
6.1(iii) through 6.1(vii) hereof shall not constitute Events of Default with
respect to the Securities.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.2 or 8.3 hereof to the outstanding Securities:
(i) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 hereof who shall agree to comply with the provisions of this
Article VIII applicable to it), in trust, for the benefit of the Holders of the
Securities, cash, U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest (and Liquidated Damages, if any) on such outstanding Securities on the
stated date for payment thereof or on the redemption date of such principal or
installment of principal of, premium, if any, or interest on such Securities,
and the holders of Securities must have a
74
valid, perfected, exclusive security interest in such trust, (ii) in the case
of Legal Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the trustee
confirming that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
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 confirm that, the Holders of such outstanding Securities will
not recognize income, gain or loss for Federal income tax purposes as a
result of such Legal Defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Legal Defeasance had not occurred; (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to such Trustee
confirming that the Holders of such outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
Covenant Defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit or
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]; (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a
default under any material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit was not made by the Company
with the intent of preferring the Holders of such Securities over the other
creditors of the Company with the intent of defeating, hindering, delaying or
defrauding other creditors of the Company; and (vii) the Company shall have
delivered to the Trustee an Officers' Certificate and an opinion of counsel,
each stating that the conditions precedent provided for in, in the case of
the Officers' Certificate, (i) through (vi) and, in the case of the opinion
of counsel, clauses (i), (with respect to the validity and perfection of the
security interest) (ii), (iii) and (v) of this paragraph, have been complied
with and in the case of a Covenant Defeasance the Company shall have
delivered to the Trustee an Officers' Certificate, subject to such
qualifications and exceptions as the Trustee deems appropriate, to the effect
that, assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of the
Securities is an insider of the Company, after the 91st day of deposit the
trust funds will not be subject to the effect of any applicable Federal
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally.
If the funds deposited with the Trustee to effect Covenant Defeasance
are insufficient to pay the principal of, premium, if any, and interest (and
Liquidated Damages, if any) on the Securities when due, then the obligations of
the Company and the Guarantors under this Indenture, the Securities and the
Guarantees will be revived and no such defeasance will be deemed to have
occurred.
75
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all cash and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.5, the
"Paying Agent") pursuant to Section 8.4 hereof in respect of the outstanding
Securities shall be held in trust and applied by the Paying Agent, in accordance
with the provisions of such Securities and this Indenture, to the payment,
either directly or through any other Paying Agent as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest (and Liquidated Damages, if
any), but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of outstanding Securities.
SECTION 8.6. REPAYMENT TO THE COMPANY.
(a) Anything in this Article VIII to the contrary
notwithstanding, the Trustee or the Paying Agent shall deliver or pay to the
Company from time to time upon the request of the Company any cash or U.S.
Government Obligations held by it as provided in Section 8.4 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 8.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest (and Liquidated Damages, if any) on any Security and remaining
unclaimed for two years after such principal, and premium, if any, or interest
has become due and payable shall be paid to the Company on its request; and the
Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the NEW YORK TIMES and THE
WALL STREET JOURNAL (national edition),
76
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 the Company.
SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply such money in accordance with
Sections 8.2 and 8.3 hereof, as the case may be; PROVIDED, HOWEVER, that, if the
Company makes any payment of principal of, premium, if any, or interest (and
Liquidated Damages, if any) on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the cash or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to cure any ambiguity, defect, or inconsistency, or make any
other provisions with respect to matters or questions arising under this
Indenture which shall not be inconsistent with the provisions of this Indenture,
PROVIDED such action pursuant to this clause (1) shall not adversely affect the
interests of any Holder in any respect;
(2) to add to the covenants of the Company or the Guarantors for
the benefit of the Holders, or to surrender any right or power herein conferred
upon the Company
77
or the Guarantors or make any other change that does not adversely affect the
rights of any Holder;
(3) to provide for collateral for or additional Guarantors of
the Securities;
(4) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the obligations of the Company,
herein and in the Securities in accordance with Article V;
(5) to comply with the TIA;
(6) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guarantee of such
Guarantor (as set forth in Section 11.4) in accordance with Article XI;
(7) to evidence the release of any Guarantor in accordance with
Article XI;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
(9) in any other case where a supplemental indenture is required
or permitted to be entered into pursuant to the provisions of this Indenture
without the consent of any Holder; or
(10) to provide for the issuance and authorization of the
Exchange Securities.
(11) to effect any changes to Section 2.6 in a manner necessary
to comply with procedures of the Securities Custodian or the Depository,
PROVIDED such action pursuant to this clause (11) shall not adversely affect the
interests of any Holder in any respect.
78
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 6.8 hereof, with the consent of the Holders of a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange offer for such
Securities), by written act of said Holders delivered to the Company and the
Trustee, the Company, and as applicable, any Guarantor, when authorized by Board
Resolutions, and the Trustee may amend or supplement this Indenture or the
Securities or enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or the Securities or of modifying in any
manner the rights of the Holders under this Indenture or the Securities;
PROVIDED that no such modification may, without the consent of holders of at
least 66 2/3% in aggregate principal amount of Securities at the time
outstanding, modify the provisions (including the defined terms therein) of
Article X in a manner adverse to the holders. Subject to Section 6.8, the
Holder or Holders of not less than a majority in aggregate principal amount of
then outstanding Securities may waive compliance by the Company or any Guarantor
with any provision of this Indenture or the Securities. Notwithstanding any of
the above, however, no such amendment, supplemental indenture or waiver shall,
without the consent of the Holder of each outstanding Security affected thereby:
(1) change the Maturity Date on any Security, or reduce the principal
amount thereof or the rate (or extend the time for payment) of interest thereon
or any premium payable upon the redemption thereof, or change the place of
payment where, or the coin or currency in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity Date thereof (or in the
case of redemption, on or after the Redemption Date), or reduce the Change of
Control Purchase Price or the Asset Sale Offer Price (although the provisions
relating to the Change of Control or Asset Sale may otherwise be amended or
deleted in accordance with the provisions of this Indenture) or alter the
provisions (including the defined terms used herein) of Article III of this
Indenture or Paragraph 5 of the Securities, regarding the right of the Company
to redeem the Securities, in a manner adverse to the Holders; or
(2) reduce the percentage in principal amount of the outstanding
Securities, the consent of whose Holders is required for any such amendment,
supplemental indenture or wavier provided for in this Indenture; or
(3) modify any of the waiver provisions, except to increase any
required percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected thereby.
79
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the Company as the Person to whom consents
should be sent if such revocation is received by the Company or such Person
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of Securities have
consented (and not theretofore revoked such consent) to the amendment,
supplement or waiver.
80
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (3) of Section 9.2 hereof, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; PROVIDED, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest (and Liquidated Damages, if any) on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; PROVIDED, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
81
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
CHANGE OF CONTROL.
(a) In the event that a Change of Control has occurred,
each holder of Securities will have the right, at such holder's option, pursuant
to an offer (subject only to conditions required by applicable law, if any) by
the Company (the "Change of Control Offer"), to require the Company to
repurchase all or any part of such holder's Securities (PROVIDED, that the
principal amount of such Securities must be $1,000 or an integral multiple
thereof) on a date (the "Change of Control Purchase Date") that is no later than
35 Business Days after the occurrence of such Change of Control, at a cash price
equal to 101% of the principal amount thereof (the "Change of Control Purchase
Price"), together with accrued and unpaid interest and Liquidated Damages, if
any, to the Change of Control Purchase Date.
Notwithstanding anything in this Article X to the contrary, prior to
the commencement of a Change of Control Offer, but in any event within 30 days
following any Change of Control, the Company shall (i)(a) repay in full and
terminate all commitments under Indebtedness under the Credit Agreement and all
other Senior Debt the terms of which require repayment upon a Change of Control
or (b) offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Agreement and all such other Senior Debt and repay
the Indebtedness owed to each lender which has accepted such offer in full or
(ii) obtain the requisite consents under the Credit Agreement and all such other
Senior Debt to permit the repurchase of the Securities as provided herein. The
Company's failure to comply with the preceding sentence shall constitute an
Event of Default described in Section 6.1(iv) and not in Section 6.1(ii).
(b) In the event that, pursuant to this Section 10.1, the
Company shall be required to commence a Change of Control Offer, the Company
shall follow the procedures set forth in this Section 10.1 as follows:
(i) the Change of Control Offer shall commence within 10
Business Days following the occurrence of a Change of Control;
82
(ii) the Change of Control Offer shall remain open for 20
Business Days following its commencement (the "Change of Control Offer
Period");
(iii) upon the expiration of the Change of Control Offer
Period, the Company promptly shall purchase all of the tendered Securities
at the Change of Control Purchase Price;
(iv) if the Change of Control is on or after an interest
payment record date and on or before the associated Interest Payment Date,
any accrued and unpaid interest (and Liquidated Damages, if any) due on
such Interest Payment Date will be paid to the Person in whose name a
Security is registered at the close of business on such Record Date, and
such interest (and Liquidated Damages, if applicable) will not be payable
to Securityholders who tender Securities pursuant to the Change of Control
Offer;
(v) the Company shall provide the Trustee and the Paying
Agent with written notice of the Change of Control Offer at least three
Business Days before the commencement of any Change of Control Offer; and
(vi) on or before the commencement of any Change of Control
Offer, the Company or the Trustee (upon the request and at the expense of
the Company) shall send, by first-class mail, a notice to each of the
Securityholders, which (to the extent consistent with this Indenture) shall
govern the terms of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is
being made pursuant to this Section 10.1 and that all
Securities, or portions thereof, tendered will be accepted
for payment;
(B) the Change of Control Purchase
Price (including the amount of accrued but unpaid interest
(and Liquidated Damages, if any)) and the Change of Control
Purchase Date;
(C) that any Security, or portion
thereof, not tendered or accepted for payment will continue
to accrue interest;
83
(D) that, unless the Company defaults
in depositing cash with the Paying Agent in accordance with
the last paragraph of this Section 10.1, or such payment is
prevented for any reason, any Security, or portion thereof,
accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control
Purchase Date;
(E) that Holders electing to have a
Security, or portion thereof, purchased pursuant to a Change
of Control Offer will be required to surrender the Security,
with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Paying
Agent (which may not for purposes of this Section 10.1,
notwithstanding anything in this Indenture to the contrary,
be the Company or any Affiliate of the Company) at the
address specified in the notice prior to the expiration of
the Change of Control Offer;
(F) that Holders will be entitled to
withdraw their election, in whole or in part, if the Paying
Agent receives, prior to the expiration of the Change of
Control Offer, a facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Securities the Holder is withdrawing and a statement
containing a facsimile signature and stating that such
Holder is withdrawing his election to have such principal
amount of Securities purchased;
(G) that Holders whose Securities are
purchased only in part will be issued new Securities equal
in principal amount to the unpurchased portion of the
Securities surrendered; and
(H) a brief description of the events
resulting in such Change of Control.
Any Change of Control Offer shall be made in compliance with all
applicable laws, rules and regulations, including, if applicable, Regulation 14E
under the Exchange Act and the rules thereunder and all other applicable Federal
and state securities laws. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of
84
this Indenture relating to a Change of Control, compliance by the Company or
any of the Guarantors with such laws and regulations shall not in and of
itself cause a breach of its obligations under this Indenture.
On or before the Change of Control Purchase Date, the Company shall
(i) accept for payment Securities or portions thereof properly tendered pursuant
to the Change of Control Offer, (ii) deposit with the Paying Agent cash
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest and Liquidated Damages, if any) of all Securities so
tendered and (iii) deliver to the Trustee Securities so accepted together with
an Officers' Certificate listing the Securities or portions thereof being
purchased by the Company. The Paying Agent promptly will pay the Holders of
Securities so accepted an amount equal to the Change of Control Purchase Price
(together with accrued and unpaid interest and Liquidated Damages, if any), and
the Trustee promptly will authenticate and deliver to such Holders a new
Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted will be delivered promptly by the
Company to the Holder thereof. The Company publicly will announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Purchase Date.
ARTICLE XI
GUARANTEE
SECTION 11.1. GUARANTEE.
(a) If any Person becomes a Subsidiary of the Company,
whether pursuant to the acquisition by the Company or any Guarantor of Equity
Interests of such Person, or otherwise, such Subsidiary (in each case, a
"Guarantor") shall, to the fullest extent permitted by applicable law,
irrevocably and unconditionally guarantee (the "Guarantee") to each Holder of a
Security authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability against
the Company and any other Guarantors of this Indenture, the Securities or the
obligations of the Company under this Indenture or the Securities, that: (x)
the principal of and premium (if any), and interest (and Liquidated Damages, if
any) on the Securities will be paid in full when due, whether at the Maturity
Date or Interest Payment Date, by acceleration, call for redemption, upon a
Change of Control, an Asset Sale Offer or otherwise; (y) all other obligations
of the Company to the Holders or the Trustee under this Indenture or the
Securities will be promptly paid in full or performed, all in accordance with
the terms of this Indenture and the Securities; and (z) in case of any extension
of time of payment or renewal of any Securities or
85
any of such other obligations, they will be paid in full when due or
performed in accordance with the terms of the extension or renewal, whether
at maturity, by acceleration, call for redemption, upon a Change of Control,
an Asset Sale Offer or otherwise. Failing payment when due of any amount so
guaranteed for whatever reason, each Guarantor shall be obligated to pay the
same before failure so to pay becomes an Event of Default.
If the Company or a Guarantor defaults in the payment of the principal
of, premium, if any, or interest (or Liquidated Damages, if any) on, the
Securities when and as the same shall become due, whether upon maturity,
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise, without the necessity of action by the Trustee or any
Holder, each Guarantor shall be required, jointly and severally, to promptly
make such payment in full.
Each Guarantor shall, within five Business Days after becoming a
Subsidiary of the Company, execute and deliver to the Trustee a supplemental
indenture, which shall be in a form satisfactory to the Trustee, making such
Guarantor a party to this Indenture.
(b) Each Guarantor hereby agrees to the fullest extent
permitted by applicable law, that its obligations with regard to this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action to
enforce the same, any delays in obtaining or realizing upon or failures to
obtain or realize upon collateral, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstances that might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives to the fullest extent permitted by applicable law
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company or right to require the prior disposition
of the assets of the Company to meet its obligations, protest, notice and all
demands whatsoever and covenants that this Guarantee will not be discharged
except by complete performance of the obligations contained in the Securities
and this Indenture.
(c) If any Holder or the Trustee is required by any court
or otherwise to return to either the Company or any Guarantor, or any Custodian
or similar official acting in relation to either the Company or such Guarantor,
any amount paid by either the Company or such Guarantor to the Trustee or such
Holder, this Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor further agrees that, as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.2 hereof for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration as to the
86
Company of the obligations guaranteed hereby, and (ii) in the event of any
declaration of acceleration of those obligations as provided in Section 6.2
hereof, those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of this
Guarantee.
(d) It is the intention of each Guarantor and the Company
that the obligations of each Guarantor hereunder shall be in, but not in excess
of, the maximum amount permitted by applicable law. Accordingly, if the
obligations in respect of the Guarantee would be annulled, avoided or
subordinated to the creditors of any Guarantor by a court of competent
jurisdiction in a proceeding actually pending before such court as a result of a
determination both that such Guarantee was made by such Guarantor without fair
consideration and, immediately after giving effect thereto, such Guarantor was
insolvent or unable to pay its debts as they mature or left with an unreasonably
small capital, then the obligations of such Guarantor under such Guarantee shall
be reduced by such court if and to the extent such reduction would result in the
avoidance of such annulment, avoidance or subordination; PROVIDED, HOWEVER, that
any reduction pursuant to this paragraph shall be made in the smallest amount as
is strictly necessary to reach such result. For purposes of this paragraph,
"fair consideration", "insolvency", "unable to pay its debts as they mature",
"unreasonably small capital" and the effective times of reductions, if any,
required by this paragraph shall be determined in accordance with applicable
law.
SECTION 11.2. EXECUTION AND DELIVERY OF GUARANTEE.
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of an indenture supplement pursuant to Section 11.1 hereof, be deemed
to have signed on each Security issued hereunder the notation of guarantee set
forth on the form of the Securities attached hereto as Exhibit A to the same
extent as if the signature of such Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 11.1 on behalf of each Guarantor. The notation of a guarantee set forth
on any Security shall be null and void and of no further effect with respect to
the guarantee of any Guarantor which, pursuant to Section 11.4, is released from
such Guarantee.
SECTION 11.3. CERTAIN BANKRUPTCY EVENTS.
87
Each Guarantor hereby covenants and agrees, to the fullest extent that
it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Guarantee and hereby waives and
agrees not to take the benefit of any such stay of execution, whether under
Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 11.4. LIMITATION ON MERGER OF SUBSIDIARIES AND RELEASE OF
GUARANTORS.
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving person) another person unless (i) subject to the
provisions of the following paragraph and certain other provisions of this
Indenture, the person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee, pursuant to which such person shall unconditionally guarantee, on a
senior subordinated basis, all of such Guarantor's obligations under such
Guarantor's guarantee and this Indenture on the terms set forth in this
Indenture; and (ii) immediately before and immediately after giving effect to
such transaction on a PRO FORMA basis, no Default or Event of Default shall have
occurred or be continuing.
Upon the sale or disposition (whether by merger, stock purchase, asset
sale or otherwise) of a Subsidiary Guarantor (or all of its assets) to an entity
which is not a Subsidiary Guarantor (including the designation of a Subsidiary
to become an Unrestricted Subsidiary), which transaction is otherwise in
compliance with this Indenture (including, without limitation, the provisions of
Section 4.14), such Subsidiary Guarantor will be deemed released from its
obligations under its Guarantee of the Securities; PROVIDED, HOWEVER, that any
such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its guarantees of, and under all of its
pledges of assets or other security interests which secure, any Indebtedness of
the Company or any other Subsidiary shall also terminate upon such release, sale
or transfer.
ARTICLE XII
88
SUBORDINATION
SECTION 12.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and interest on the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of the Securities by the Company and
the Guarantors (including, without limitation, pursuant to Section 4.14, Article
X or Article XI) is subordinated, to the extent and in the manner provided in
this Article XII, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt of the Company and the Guarantors and that these subordination
provisions are for the benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 12.2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment (by set-off or otherwise) shall be made by
or on behalf of the Company or a Guarantor, as applicable, on account of any
Obligation in respect of the Securities, including the principal of, premium, if
any, or interest or Liquidated Damages on the Securities (including any
repurchases of Securities), or on account of the redemption provisions of the
Securities, for cash or property (other than Junior Securities), (i) upon the
maturity of any Senior Debt of the Company or such Guarantor by lapse of time,
acceleration (unless waived) or otherwise, unless and until all principal of,
premium, if any, and the interest on such Senior Debt are first paid in full in
cash or Cash Equivalents (or such payment is duly provided for) or otherwise to
the extent holders accept satisfaction of amounts due by settlement in other
than cash or Cash Equivalents, or (ii) in the event of default in the payment of
any principal of, premium, if any, or interest on Senior Debt of the Company or
such Guarantor when it becomes due and payable, whether at maturity, or at a
date fixed for prepayment or by declaration or otherwise (a "Payment Default"),
unless and until such Payment Default has been cured or waived or otherwise has
ceased to exist.
(b) Upon (i) the happening of an event of default other
than a Payment Default that permits the holders of Senior Debt to declare such
Senior Debt to be due
89
and payable and (ii) written notice of such event of default given to the
Company and the Trustee by the Representative under the Credit Agreement or
the holders of an aggregate of at least $10.0 million principal amount
outstanding of any other Senior Debt or their representative (a "Payment
Notice"), then, unless and until such event of default has been cured or
waived or otherwise has ceased to exist, no payment (by set-off or otherwise)
may be made by or on behalf of the Company or any Guarantor which is an
obligor under such Senior Debt on account of any Obligation in respect of the
Securities, including the principal of, premium, if any, or interest on the
Securities, (including any repurchases of any of the Securities), or on
account of the redemption provisions of the Securities, in any such case,
other than payments made with Junior Securities. Notwithstanding the
foregoing, unless the Senior Debt in respect of which such event of default
exists has been declared due and payable in its entirety within 179 days
after the Payment Notice is delivered as set forth above (the "Payment
Blockage Period") (and such declaration has not been rescinded or waived), at
the end of the Payment Blockage Period, the Company and the Guarantors shall
be required to pay all sums not paid to the Holders of the Securities during
the Payment Blockage Period due to the foregoing prohibitions and to resume
all other payments as and when due on the Securities. Any number of Payment
Notices may be given; PROVIDED, HOWEVER, that (i) not more than one Payment
Notice shall be given within a period of any 360 consecutive days, and (ii)
no default that existed upon the date of such Payment Notice or the
commencement of such Payment Blockage Period (whether or not such event of
default is on the same issue of Senior Debt) shall be made the basis for the
commencement of any other Payment Blockage Period (it being acknowledged that
any subsequent action, or any subsequent breach of any financial covenant for
a period commencing after the expiration of such Payment Blockage Period
that, in either case, would give rise to a new event of default, even though
it is an event that would also have been a separate breach pursuant to any
provision under which a prior event of default previously existed, shall
constitute a new event of default for this purpose).
(c) In furtherance of the provisions of Section 12.1, in
the event that, notwithstanding the foregoing provisions of this Section 12.2,
any payment or distribution of assets of the Company or any Guarantor (other
than Junior Securities) shall be received by the Trustee or the Holders at a
time when such payment or distribution is prohibited by the foregoing provisions
of this Section 12.2, such payment or distribution shall be held in trust for
the benefit of the holders of such Senior Debt, and shall be paid or delivered
by the Trustee or such Holders, as the case may be, to the holders of such
Senior Debt remaining unpaid or unprovided for or to their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
ratably according to the aggregate principal amounts remaining unpaid on account
of such Senior Debt held or represented by each, for application to the payment
of all such Senior Debt remaining unpaid, to the extent necessary to pay or to
provide for the payment of all such Senior Debt in full in cash or Cash
Equivalents or otherwise to the extent holders accept satisfaction of amounts
due after giving effect to any concurrent payment or distribution to the holders
of such Senior Debt.
90
SECTION 12.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or any Guarantor upon
any dissolution, winding up, total or partial liquidation or reorganization of
the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, will first be entitled to receive payment in full in
cash or Cash Equivalents (or have such payment duly provided for) or otherwise
to the extent holders expressly accept satisfaction of amounts due by settlement
in other than cash or Cash Equivalents before the Holders are entitled to
receive any payment on account of any Obligation in respect of the Securities,
including the principal of, premium, if any, and interest on the Securities
(other than Junior Securities); and
(b) any payment or distribution of assets of the Company or
such Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities) to which the Holders or
the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise), except for the subordination provisions contained in this Indenture,
will be paid by the liquidating trustee or agent or other person making such a
payment or distribution directly to the holders of such Senior Debt or their
representative to the extent necessary to make payment in full (or have such
payment duly provided for) on all such Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Debt.
SECTION 12.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS
OF SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company or any Guarantor as provided herein, the Holders of
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments or distributions of assets of the Company applicable to the
Senior Debt until all amounts owing on the Securities shall be paid in full, and
for the purpose of such subrogation no such payments or distributions to the
holders of such Senior Debt by or on behalf of the Company or any Guarantor, or
by or on behalf of the Holders by virtue of this Article XII, which otherwise
would have been made to the Holders shall, as between the Company or any
Guarantor and the Holders, be deemed to be payment by the Company or any
Guarantor or on account of such
91
Senior Debt, it being understood that the provisions of this Article XII are
and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of such Senior Debt, on the
other hand.
SECTION 12.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS
UNCONDITIONAL.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company and
any Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest and Liquidated Damages on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
and the Guarantors other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XII, of the holders of Senior Debt in
respect of cash, property or securities of the Company and the Guarantors
received upon the exercise of any such remedy. Notwithstanding anything to the
contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Company and the Guarantors
referred to in this Article XII, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating Trustee or agent or other Person making any
distribution to the Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company or any Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII so long as such
court has been apprised of the provisions of, or the order, decree or
certificate makes reference to, the provisions of this Article XII. Nothing in
this Section 12.5 shall apply to the claims of, or payments to, the Trustee
under or pursuant to Section 7.7.
SECTION 12.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment
written notice thereof from the Company or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of
92
any such written notice, the Trustee, subject to the provisions of Sections
7.1 and 7.2, shall be entitled in all respects conclusively to assume that no
such fact exists.
SECTION 12.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreement or other
Designated Senior Debt and (ii) allocated for the payment of Securities, shall
not be subject to the subordination provisions of this Article XII. Otherwise,
any deposit of assets with the Trustee or the Agent (whether or not in trust)
for the payment of principal of or interest on any Securities shall be subject
to the provisions of Sections 12.1, 12.2, 12.3 and 12.4; PROVIDED that, if prior
to one Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such assets
the written notice provided for in Section 12.6, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such date.
SECTION 12.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF THE COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to
enforce subordination provisions contained in this Article XII shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or any Guarantor or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company or any Guarantor with
the terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may
extend, renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders. The subordination
provisions contained in this Indenture are for the benefit of the holders from
time to time of Senior Debt and may not be rescinded, cancelled, amended or
modified in any way other than any amendment or modification that would not
adversely affect the rights of any holder of Senior Debt or any amendment or
modification that is consented to by each holder of Senior Debt that would be
adversely affected thereby. The subordination provisions hereof shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Senior Debt is
93
rescinded or must otherwise be returned by any holder of the Senior Debt upon
the insolvency, bankruptcy, or reorganization of the Company, any Guarantor,
or otherwise, all as though such payment has not been made.
SECTION 12.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of assets and liabilities of the
Company or any Guarantor), the immediate filing of a claim for the unpaid
balance of his Securities in the form required in said proceedings and cause
said claim to be approved. In the event of any liquidation or reorganization
of the Company or any Guarantor in bankruptcy, insolvency, receivership or
similar proceeding, if the Holders of the Securities (or the Trustee on their
behalf) have not filed any claim, proof of claim, or other instrument of
similar character necessary to enforce the obligations of the Company or any
Guarantor in respect of the Securities at least thirty (30) days before the
expiration of the time to file the same, then in such event, but only in such
event, the holders of the Designated Senior Debt or a representative on their
behalf may, as an attorney-in-fact for such Holders, file any claim, proof of
claim, or other instrument of similar character on behalf of such Holders.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their representative to authorize or consent to or
accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior
Debt or their representative to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 12.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT.
94
The failure to make a payment on account of principal of, premium, if
any, or interest (or Liquidated Damages, if any) on the Securities by reason of
any provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Securities.
SECTION 12.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR
DEBT.
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 (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company, any
Guarantor or any other Person, cash, property or securities to which any holders
of Senior Debt shall be entitled by virtue of this Article XII or otherwise.
Nothing in this Section 12.12 shall affect the obligation of any other such
Person to hold such payment for the benefit of, and to pay such payment over to,
the holders of Senior Debt or their representative. In the event of any
conflict between the fiduciary duty of the Trustee to the Holders of Securities
and to the holders of Senior Debt, the Trustee is expressly authorized to
resolve such conflict in favor of the Holders.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 13.2. NOTICES.
Any notices or other communications to the Company or any Guarantor or
the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
95
if to the Company or any Guarantor:
Compass Aerospace Corporation
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Trustee:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee).
96
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other Person shall
have the protection of TIA Section 312(c).
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, such Person shall furnish to
the Trustee:
(1) an Officers' Certificate (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been met; and
(2) an Opinion of Counsel (in form and substance
reasonably satisfactory to the Trustee) stating that, in the opinion
of such counsel, all such conditions precedent have been met.
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
97
(1) a statement that the Person making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been met; and
(4) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been met;
PROVIDED, HOWEVER, that with respect to matters of fact an Opinion of
Counsel may rely on an Officers' Certificate or certificates of public
officials.
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for
its functions.
SECTION 13.7. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.8. GOVERNING LAW.
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE
COMPANY AND THE GUAR-
98
ANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY
FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. EACH OF THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE TRUSTEE OR ANY SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE COMPANY AND THE GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, director,
officer or employee, as such, past, present or future, of the Company or any
Guarantor, or any successor entity, shall have any personal liability in respect
of the obligations of the Company and the Guarantors under the Securities, this
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation by reason of his, her or its status as such
partner, incorporator, stockholder, director, officer or employee. Each
Securityholder by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Securities.
99
SECTION 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and
the Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of
them together shall represent the same agreement.
SECTION 13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in the
Securities or in the Guarantees shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers' Certificates, Opinions of Counsel or other
100
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.16. REGISTRATION RIGHTS.
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject to
the terms of, the Registration Rights Agreement.
101
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
COMPASS AEROSPACE CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Attest: /s/ XXXXXXXXX XXXX
----------------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
and President
WESTERN METHODS MACHINERY CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Attest: /s/ XXXXXXXXX XXXX
----------------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
and President
102
AEROMIL ENGINEERING COMPANY
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Attest: /s/ XXXXXXXXX XXXX
----------------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
and President
XXXXXXXX MACHINE, INC.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Attest: /s/ XXXXXXXXX XXXX
----------------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
and President
XXXXXX MACHINE INCORPORATED
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Secretary
Attest: /s/ XXXXXXXXX XXXX
----------------------------
Name: Xxxxxxxxx Xxxx
Title: Chief Executive Officer
and President
103
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Trustee
By: /s/ XXXXXXX XXXXXXX
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
Attest: /s/ XXXXXXX XXXXXXXXX
----------------------------
Name: Xxxxxxx XxXxxxxxx
Title: Assistant Secretary
104
EXHIBIT A
[FORM OF SECURITY]
COMPASS AEROSPACE CORPORATION
10 1/8% SERIES A(1) SENIOR SUBORDINATED NOTE DUE 2005
CUSIP No. ______________
No. $
Compass Aerospace Corporation, a Delaware corporation (hereinafter
called the "Company", which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of _____________
Dollars, on April 15, 2005.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
--------------------
(1) Series A should be replaced with Series B in the Exchange Securities.
A-1
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed.
COMPASS AEROSPACE CORPORATION ,
a Delaware corporation
By:
--------------------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
IBJ XXXXXXXX BANK & TRUST COMPANY
as Trustee
By
------------------------------------
Authorized Signatory
A-3
COMPASS AEROSPACE CORPORATION
10 1/8% SERIES A(2) SENIOR SUBORDINATED NOTE DUE 2005
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized
representative of The Depositary Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("XXX"), to the Company or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.(3)
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULA-
----------
(2) Series A should be replaced with Series B in the Exchange Securities.
(3) This paragraph should only be added if the Security is issued in global
form.
A-4
TION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1)(2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT, AN "IAI").
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE
REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES ACT, (D)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000,
AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, IF THE
COMPANY SO REQUESTS, THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY, IF THE COMPANY SO REQUESTS), OR
(G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND
A-5
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES
ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
1. INTEREST.
Compass Aerospace Corporation, a Delaware corporation (hereinafter
called the "Company," which term includes any successors under the Indenture
hereinafter referred to), promises to pay interest on the principal amount of
this Security at the rate of 10 1/8 % per annum. To the extent it is lawful,
the Company promises to pay interest on any interest payment due but unpaid on
such principal amount at a rate of 10 1/8 % per annum compounded semi-annually.
The Company will pay interest semi-annually on April 15 and October 15
of each year (each, an "Interest Payment Date"), commencing October 15, 1998.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid on the Securities, from
the date of the original issuance. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company shall pay interest (and Liquidated Damages, if any) on the
Securities (except defaulted interest) to the Persons who are the registered
Holders at the close of business on the Record Date immediately preceding the
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect principal payments. Except as provided below, the Company shall pay
principal, premium, and interest (and Liquidated Damages, if any) in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for payment of public and private debts ("Cash"). The Securities
will be payable as to principal, premium and interest (and Liquidated Damages,
if any) at the office or agency of the Company maintained for
A-6
such purpose within the Borough of Manhattan, the City and State of New York
or, at the option of the Company, payment of principal, premium and interest
(and Liquidated Damages, if any) may be made by check mailed to the Holders
at their addresses set forth in the register of Holders, and PROVIDED that
payment by wire transfer of immediately available funds will be required with
respect to principal of and interest (and Liquidated Damages, if any) and
premium on all Global Securities and all other Securities the Holders of
which shall have provided wire transfer instructions to the Company or the
Paying Agent at least 5 Business Days prior to the relevant record date.
3. PAYING AGENT AND REGISTRAR.
Initially, IBJ Xxxxxxxx Bank & Trust Company (the "Trustee"), will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. The Company or any of
its Subsidiaries may, subject to certain exceptions, act as Paying Agent,
Registrar or co-Registrar.
4. INDENTURE.
The Company issued the Securities under an Indenture, dated as of
April 21, 1998 (the "Indenture"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act, as in effect on the date of the Indenture. The Securities are
subject to all such terms, and Holders of Securities are referred to the
Indenture and said Act for a statement of them. The Securities are senior
subordinated obligations of the Company limited in aggregate principal amount to
$110,000,000. The Securities are, to the extent and in the manner provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Senior Debt of the Company, whether outstanding on the date of
the Indenture or thereafter created, incurred, assumed or guaranteed. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
5. REDEMPTION.
Except as provided in this Paragraph 5 or in Article III of the
Indenture, the Company shall not have the right to redeem any Securities. The
Securities may be redeemed in whole or from time to time in part at any time on
and after April 15, 2002,
A-7
at the option of the Company, at the Redemption Price (expressed as a
percentage of principal amount) set forth below with respect to the indicated
Redemption Date, in each case (subject to the right of Holders of record on a
Record Date that is on or prior to such Redemption Date to receive interest
due on the Interest Payment Date to which such Record Date relates), plus any
accrued but unpaid interest (and Liquidated Damages, if any) to the
Redemption Date.
If redeemed during
the 12-month period
commencing April 15, Redemption Price
-------------------- ----------------
2002 . . . . . . . . . 105.063%
2003 . . . . . . . . . 102.531%
2004 . . . . . . . . . 100.000%
Notwithstanding the foregoing, until April 15, 2001, upon an Initial
Public Equity Offering of common stock for cash of the Company, up to 35% of the
aggregate principal amount of the Securities originally outstanding may be
redeemed at the option of the Company within 90 days of such Initial Public
Equity Offering, on not less than 30 days, but not more than 60 days, notice to
each holder of the Securities to be redeemed, with cash from the Net Cash
Proceeds of such Initial Public Equity Offering, at a redemption price equal to
110.125% of principal, (subject to the right of Holders of record on a Record
Date to receive interest due on an Interest Payment Date that is on or prior to
such Redemption Date) together with accrued and unpaid interest and Liquidated
Damages, if any, to the date of redemption; PROVIDED, HOWEVER, that at least 65%
of the aggregate principal amount of the original aggregate principal amount of
the Securities remain outstanding.
Any such redemption will comply with Article III of the Indenture.
6. NOTICE OF REDEMPTION.
Notice of redemption will be sent by first class mail, at least 30
days and not more than 60 days prior to the Redemption Date to the Holder of
each Security to be redeemed at such Holder's last address as then shown upon
the registry books of the Registrar. Securities may be redeemed in part in
multiples of $1,000 only.
A-8
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption shall
have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only right
of the Holders of such Securities will be to receive payment of the Redemption
Price, plus any accrued and unpaid interest (and Liquidated Damages, if any) to
the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder may register
the transfer of, or exchange Securities in accordance with, the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities (a) selected for redemption except the unredeemed
portion of any Security being redeemed in part or (b) for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or
redemption and ending at the close of business on the day of such mailing.
8. PERSONS DEEMED OWNERS.
The registered Holder of a Security may be treated as the owner of it
for all purposes.
9. UNCLAIMED MONEY.
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee and the Paying Agent(s) will pay the money back to
the Company at its written request. After that, all liability of the Trustee
and such Paying Agent(s) with respect to such money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY.
Except as set forth in the Indenture, if the Company irrevocably
deposits with the Trustee, in trust, for the benefit of the Holders, cash, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient in the opinion of a nationally recognized firm of independent public
accountants selected by the Trustee,
A-9
to pay the principal of, premium, if any, and interest (and Liquidated
Damages, if any) on the Securities to redemption or maturity and complies
with the other provisions of the Indenture relating thereto, the Company will
be discharged from certain provisions of the Indenture and the Securities
(including the financial covenants, but excluding its obligation to pay the
principal of, premium, if any, and interest (and Liquidated Damages, if any)
on the Securities). Upon satisfaction of certain additional conditions set
forth in the Indenture, the Company may elect to have its obligations
discharged with respect to outstanding Securities.
11. AMENDMENT; SUPPLEMENT; WAIVER.
Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then outstanding, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may under certain circumstances amend or supplement
the Indenture or the Securities to, among other things, cure any ambiguity,
defect or inconsistency, or make any other change that does not adversely affect
the rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS.
The Indenture imposes certain limitations on the ability of the
Company and any Guarantors to, among other things, incur additional Indebtedness
and issue Preferred Stock, pay dividends or make certain other Restricted
Payments, enter into certain transactions with Affiliates, incur Liens, sell
assets and subsidiary stock, merge or consolidate with any other Person or
transfer (by lease, assignment or otherwise) substantially all of the properties
and assets of the Company. The limitations are subject to a number of important
qualifications and exceptions. The Company must periodically report to the
Trustee on compliance with such limitations.
13. RANKING.
Payment of principal, premium, if any, and interest (and Liquidated
Damages, if any) on the Securities is subordinated, in the manner and to the
extent set forth in the Indenture, to the prior payment in full of all Senior
Debt.
X-00
00. XXXXXXXXXX AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
offer to purchase on the Change of Control Purchase Date all outstanding
Securities at a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest (and Liquidated Damages, if any), if any, to
the Change of Control Purchase Date. Holders of Securities will receive a
Change of Control Offer from the Company prior to any related Change of Control
Purchase Date and may elect to have such Securities purchased by completing the
form entitled "Option of Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability of the
Company, the Guarantors or any of their respective Subsidiaries to sell assets
and subsidiary stock. In the event the proceeds from a permitted Asset Sale
exceed certain amounts, as specified in the Indenture, the Company will be
required either to reinvest the proceeds of such Asset Sale in a Related
Business, repay certain Indebtedness or to make an offer to purchase each
Holder's Securities at 100% of the principal amount thereof, plus accrued
interest (and Liquidated Damages, if any), if any, to the purchase date.
15. NOTATION OF GUARANTEE.
As set forth more fully in the Indenture, the Persons constituting
Guarantors from time to time, in accordance with the provisions of the
Indenture, unconditionally and jointly and severally guarantee, in accordance
with Section 11.1 of the Indenture, to the Holder and to the Trustee and its
successors and assigns, that (i) the principal of and interest on the Security
will be paid, whether at the Maturity Date or Interest Payment Dates, by
acceleration, call for redemption upon a Change of Control Offer, upon an Asset
Sale Offer or otherwise, and all other obligations of the Company to the Holder
or the Trustee under the Indenture or this Security will be promptly paid in
full or performed, all in accordance with the terms of the Indenture and this
Security, and (ii) in the case of any extension of payment or renewal of this
Security or any of such other obligations, they will be paid in full when due or
performed in accordance with the terms of such extension or renewal, whether at
the Maturity Date, as so extended, by acceleration, call for redemption, upon a
Change of Control Offer, upon an Asset Sale Offer or otherwise. Such guarantees
shall cease to apply, and shall be null and void, with respect to any Guarantor
who, pursuant to Article XI of the Indenture, is released from its guarantees,
or whose guarantees otherwise cease to be applicable pursuant to the terms of
the Indenture.
A-11
When a successor assumes all the obligations of its predecessor under
the Securities and the Indenture, the predecessor will be released from those
obligations.
16. DEFAULTS AND REMEDIES.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Securities may declare all the Securities to be due and payable immediately, or
if there are any amounts outstanding under the Credit Agreement shall become
immediately due and payable upon the first to occur of an acceleration under the
Credit Agreement or three Business Days after receipt by the Company and the
representative of the holders of the Indebtedness under the Credit Agreement of
the notice of such an acceleration but only if such Event of Default is then
continuing. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to the
Company or any of its Significant Subsidiaries, all outstanding Securities will
become due and payable without further action or notice. Securityholders may
not enforce the Indenture, the Securities or the Guarantees except as provided
in the Indenture. Subject to certain limitations, Holders of a majority in
aggregate principal amount of the then outstanding Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders 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.
17. TRUSTEE DEALINGS WITH COMPANY.
The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, any Guarantor, any of their Subsidiaries or any of their respective
Affiliates, and may otherwise deal with such Persons as if it were not the
Trustee.
18. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, partner,
director, officer or employee, as such, past, present or future, of the Company
or any Guarantor, or any successor entity, shall have any personal liability in
respect of the obligations of the Company and the Guarantors under the
Securities or the Indenture by reason of his,
A-12
her or its status as such partner, incorporator, stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security
waives and releases all such liability. The waiver and release are part of
the consideration for the issuance of the Securities.
19. AUTHENTICATION.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this
Security.
20. ABBREVIATIONS AND DEFINED TERMS.
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company will cause CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES.(4)
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
23. GOVERNING LAW.
----------
(4) This paragraph should be included only for the Initial Securities.
A-13
The Indenture and the Securities shall be governed by and construed in
accordance with the internal laws of the State of New York.
A-14
