EXHIBIT 10.39.2
Exhibit B
---------
FORM OF INDENTURE
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DETAILS INTERMEDIATE HOLDINGS CORP.,
as Issuer
and
_________________________,
as Trustee
Indenture
dated as of __________
$___________ Stated Principal Amount at Maturity
13 1/2% Series B Senior Discount Notes due 2008
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Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of _______*
Trust Indenture
Act Section Indenture Section
(S)310(a)(1) ............................. 608
(a)(2) ............................. 608
(b) ............................. 609
(S)312(a) ............................. 701
(c) ............................. 702
(S)313(a) ............................. 703
(c) ............................. 703
(S)314(a)(4) ............................. 1010(a)
(c)(1) ............................. 102
(c)(2) ............................. 102
(e) ............................. 102
(S)315(a) ............................. 601(a)
(b) ............................. 602
(c) ............................. 601(b)
(d) ............................. 601(c), 603
316(a)(last sentence) .............................
101 ("outstanding")
(a)(1)(A) ............................. 502, 512
(a)(1)(B) ............................. 513
(b) ............................. 508
(c) ............................. 104(d)
(S)317(a)(1) ............................. 503
(a)(2) ............................. 504
(b) ............................. 1003
(S)318(a) ............................. 111
___________________
*Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS,
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ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions............................................................................. -1-
SECTION 102. Compliance Certificates and Opinions.................................................... -15-
SECTION 103. Form of Documents Delivered to Trustee.................................................. -15-
SECTION 104. Acts of Holders......................................................................... -16-
SECTION 105. Notices, Etc., to Trustee and the Issuer................................................ -17-
SECTION 106. Notice to Holders; Waiver............................................................... -17-
SECTION 107. Effect of Headings and Table of Contents................................................ -17-
SECTION 108. Successors and Assigns.................................................................. -17-
SECTION 109. Separability Clause..................................................................... -18-
SECTION 110. Benefits of Indenture................................................................... -18-
SECTION 111. Governing Law........................................................................... -18-
SECTION 112. Legal Holidays.......................................................................... -18-
SECTION 113. No Personal Liability of Directors, Officers, Employees, Stockholders or
Incorporators.................................................................................... -18-
SECTION 114. Counterparts............................................................................ -18-
SECTION 115. Communications by Holders with Other Holders............................................ -18-
ARTICLE TWO. NOTE FORMS
SECTION 201. Forms Generally......................................................................... -19-
SECTION 202. Restrictive Legends..................................................................... -19-
SECTION 203. Form of New Discount Note............................................................... -21-
SECTION 204. Form of Trustee's Certificate of Authentication......................................... -32-
SECTION 205. [Intentionally Omitted]................................................................. -33-
ARTICLE THREE. THE NEW DISCOUNT NOTES
SECTION 301. Title and Terms......................................................................... -33-
SECTION 302. Denominations........................................................................... -34-
SECTION 303. Execution, Authentication, Delivery and Dating.......................................... -34-
SECTION 304. Temporary New Discount Notes............................................................ -35-
SECTION 305. Registration, Registration of Transfer and Exchange..................................... -35-
SECTION 306. Book-Entry Provisions for Global Discount Notes......................................... -36-
SECTION 307. Special Transfer Provisions............................................................. -37-
SECTION 308. Form of Certificate to Be Delivered in Connection with Transfers to Institutional
Accredited Investors............................................................................. -39-
SECTION 309. Form of Certificate to Be Delivered in Connection with Transfers Pursuant to
Regulation S..................................................................................... -40-
SECTION 310. Mutilated, Destroyed, Lost and Stolen New Discount Notes................................ -41-
SECTION 311. Payment of Interest; Interest Rights Preserved.......................................... -42-
SECTION 312. Persons Deemed Owners................................................................... -43-
SECTION 313. Cancellation............................................................................ -43-
SECTION 314. Computation of Interest................................................................. -43-
SECTION 315. CUSIP Numbers........................................................................... -43-
ARTICLE FOUR. SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture................................................. -44-
SECTION 402. Application of Trust Money.............................................................. -45-
___________________
. Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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ARTICLE FIVE. REMEDIES
SECTION 501. Events of Default....................................................................... -45-
SECTION 502. Acceleration of Maturity; Rescission and Annulment...................................... -47-
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee......................... -47-
SECTION 504. Trustee May File Proofs of Claim........................................................ -47-
SECTION 505. Trustee May Enforce Claims Without Possession of New Discount Notes..................... -48-
SECTION 506. Application of Money Collected.......................................................... -48-
SECTION 507. Limitation on Suits..................................................................... -49-
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest............... -49-
SECTION 509. Restoration of Rights and Remedies...................................................... -49-
SECTION 510. Rights and Remedies Cumulative.......................................................... -49-
SECTION 511. Delay or Omission Not Waiver............................................................ -50-
SECTION 512. Control by Holders...................................................................... -50-
SECTION 513. Waiver of Past Defaults................................................................. -50-
SECTION 515. Undertaking for Costs................................................................... -51-
ARTICLE SIX. THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities..................................................... -51-
SECTION 602. Notice of Defaults...................................................................... -52-
SECTION 603. Certain Rights of Trustee............................................................... -52-
SECTION 604. Trustee Not Responsible for Recitals or Issuance of New Discount Notes.................. -53-
SECTION 605. May Hold New Discount Notes............................................................. -54-
SECTION 606. Money Held in Trust..................................................................... -54-
SECTION 607. Compensation and Reimbursement.......................................................... -54-
SECTION 608. Corporate Trustee Required; Eligibility................................................. -55-
SECTION 609. Resignation and Removal; Appointment of Successor....................................... -55-
SECTION 610. Acceptance of Appointment by Successor.................................................. -56-
SECTION 611. Merger, Conversion, Consolidation or Succession to Business............................. -56-
SECTION 612. Trustee's Application for Instructions from the Issuer.................................. -57-
ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND THE ISSUER
SECTION 701. the Issuer to Furnish Trustee Names and Addresses....................................... -57-
SECTION 702. Disclosure of Names and Addresses of Holders............................................ -57-
SECTION 703. Reports by Trustee...................................................................... -57-
ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS
SECTION 801. the Issuer May Consolidate, Etc., Only on Certain Terms................................. -58-
SECTION 802. Successor Substituted................................................................... -58-
ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
SECTION 901. Supplemental Indentures Without Consent of Holders...................................... -59-
SECTION 902. Supplemental Indentures with Consent of Holders......................................... -59-
SECTION 903. Execution of Supplemental Indentures.................................................... -60-
SECTION 904. Effect of Supplemental Indentures....................................................... -60-
SECTION 905. Conformity with Trust Indenture Act..................................................... -60-
SECTION 906. Reference in New Discount Notes to Supplemental Indentures.............................. -60-
SECTION 907. Notice of Supplemental Indentures....................................................... -60-
ARTICLE TEN. COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.................................... -61-
SECTION 1002. Maintenance of Office or Agency........................................................ -61-
SECTION 1003. Money for Note Payments to Be Held in Trust............................................ -61-
SECTION 1004. Corporate Existence.................................................................... -62-
SECTION 1005. Payment of Taxes and Other Claims...................................................... -62-
SECTION 1006. [Intentionally Omitted]................................................................ -63-
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SECTION 1007. [Intentionally Omitted]............................................................................... -63-
SECTION 1008. Compliance with Statutes.............................................................................. -63-
SECTION 1009. Limitation on Restricted Payments..................................................................... -63-
SECTION 1010. Limitation on Indebtedness by the Issuer.............................................................. -65-
SECTION 1010A. Limitations on Indebtedness by Details Capital........................................................ -65-
SECTION 1010B. Limitation on Indebtedness by Non-Capital Subsidiaries................................................ -65-
SECTION 1011. Limitation on Indebtedness by the Company............................................................. -66-
SECTION 1012. Limitation on Affiliate Transactions.................................................................. -67-
SECTION 1013. Limitation on Restrictions on Distributions from Restricted Subsidiaries.............................. -68-
SECTION 1014. Limitation on the Sale or Issuance of Preferred Stock of Restricted Subsidiaries...................... -69-
SECTION 1015. Change of Control..................................................................................... -69-
SECTION 1015A. Qualifying Public Offering............................................................................ -69-
SECTION 1016. Limitation on Sales of Assets and Subsidiary Stock.................................................... -70-
SECTION 1017. SEC Reports........................................................................................... -71-
SECTION 1018. Limitation on Lines of Business....................................................................... -72-
SECTION 1019. Statement by Officers as to Default................................................................... -72-
ARTICLE ELEVEN. REDEMPTION OF NEW DISCOUNT NOTES
SECTION 1101. Optional Redemption................................................................................... -72-
SECTION 1102. Applicability of Article.............................................................................. -72-
SECTION 1103. Election to Redeem; Notice to Trustee................................................................. -73-
SECTION 1104. Selection by Trustee of New Discount Notes to Be Redeemed............................................. -73-
SECTION 1105. Notice of Redemption.................................................................................. -73-
SECTION 1106. Deposit of Redemption Price........................................................................... -74-
SECTION 1107. New Discount Notes Payable on Redemption Date......................................................... -74-
SECTION 1108. New Discount Notes Redeemed in Part................................................................... -74-
ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. the Issuer's Option to Effect Legal Defeasance or Covenant Defeasance................................. -75-
SECTION 1202. Legal Defeasance and Discharge........................................................................ -75-
SECTION 1203. Covenant Defeasance................................................................................... -75-
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance................................................. -76-
SECTION 1205. Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous Provisions........ -77-
SECTION 1206. Reinstatement......................................................................................... -77-
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INDENTURE, dated as of _________, between DETAILS INTERMEDIATE
HOLDINGS CORP., a California corporation ("Intermediate Holdings"), having its
principal office at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and
_______________, as trustee (the "Trustee"), having its principal corporate
trust office at ________________.
RECITALS OF INTERMEDIATE HOLDINGS
Intermediate Holdings has duly authorized the creation of and issuance
of (i) Intermediate Holdings' 13 1/2% Series B Senior Discount Notes due 2008
(the "New Discount Notes" or the "Exchange Discount Notes") to be issued in
exchange for Intermediate Holdings' 13 1/2% Series A Senior Discount Notes due
2008 (the "Original Discount Notes") (collectively, the New Discount Notes and
the Original Discount Notes are referred to herein as the "Discount Notes") of
substantially the tenor and amount thereof and as hereinafter set forth, and to
provide therefor Intermediate Holdings has duly authorized the execution and
delivery of this Indenture.
Upon the effectiveness of a Seller Registration Statement (as defined
herein), this Indenture will be subject to, and shall be governed by, the
provisions of the Trust Indenture Act of 1939, as amended, that are required or
deemed to be part of and to govern indentures qualified thereunder.
All things necessary have been done to make the New Discount Notes,
when executed and duly issued by Intermediate Holdings and authenticated and
delivered hereunder by the Trustee or the Authenticating Agent, the valid
obligations of Intermediate Holdings and to make this Indenture a valid
agreement of Intermediate Holdings in accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Discount Notes by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the New Discount Notes, as
follows:
100. ARTICLE ONE. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
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For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and words in the singular include the plural as well
as the singular, and words in the plural include the singular as well as
the plural;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, or defined by SEC
rule and not otherwise defined herein have the meanings assigned to them
therein, and the terms "cash transaction" and "self-liquidating paper", as
used in TIA Section 311, shall have the meanings assigned to them in the
rules of the SEC adopted under the Trust Indenture Act;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined herein);
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) the word "or" is not exclusive; and
(f) provisions of this Indenture apply to successive events and
transactions.
Certain terms, used principally in Articles Two, Ten and Twelve, are
defined in those Articles.
"Accreted Value" means as of a date of determination prior to June 30,
2003, with respect to any Discount Note, the sum of (a) the Initial Accreted
Value of such Discount Note and (b) the portion of the excess of the principal
amount of such Discount Note over such Initial Accreted Value which shall have
been accreted thereon through such date, such amount to be so accreted on a
daily basis at the rate of 13.5% per annum of the Initial Accreted Value of such
Discount Note, compounded semi-annually on each June 30 and December 31 from the
Issue Date through the date of determination, computed on the basis of a 360-day
year of twelve 30-day months. The Accreted Value of any Discount Note on June
30, 2003 shall be 100% of the stated principal amount at maturity thereof.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Issuer or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Issuer or a Restricted Subsidiary of the Issuer; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Issuer; provided, however, that, in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Aggregate Initial Accreted Value" means $35,000,000.
"Asset Disposition" means any sale, lease (other than operating leases
entered into in the ordinary course of business), transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Issuer or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Issuer or by the
Issuer or a Restricted Subsidiary to a Wholly-Owned Subsidiary, (ii) the sale of
Cash Equivalents or Temporary Cash Investments in the ordinary course of
business, (iii) a disposition of inventory or a licensing of intellectual
property in the ordinary course of business, (iv) a disposition of obsolete or
worn out equipment or equipment that is no longer useful or to be used in the
conduct of the business of the Issuer and its Restricted Subsidiaries and that
is disposed of in each case in the ordinary course of business, (v) transactions
permitted under Section 801, (vi) for purposes of Section 1016 only, a
disposition subject to Section 1009 and (vii) the sale, discount or factoring,
in each case without recourse, of accounts receivable arising in the ordinary
course of business.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
greater of (i) the interest rate implicit in such Sale/Leaseback Transaction and
(ii) the interest rate borne by the Senior Subordinated Notes, in each case,
compounded semi-annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction (including any period for which such lease has been extended).
"Bank Indebtedness" means any and all amounts, whether outstanding on
the Issue Date or thereafter incurred, payable by the Company under or in
respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof and refinancings thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City or Boston, Massachusetts.
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"Capital Discount Notes" means the $110 million aggregate principal
amount of 12.5% Senior Discount Notes due 2007 of Details Capital.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP, and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date such lease may be terminated without penalty.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Ratings Group, or "A" or the equivalent thereof by Xxxxx'x Investors Service,
Inc., and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Ratings Group or "P-2" or the equivalent thereof by
Xxxxx'x Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses (i)
through (v) above.
"Change of Control" means (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted
Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that such 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), directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of the Issuer (or its successor by merger, consolidation or
purchase of all or substantially all of its assets) (for the purposes of this
clause, such person shall be deemed to beneficially own any Voting Stock of the
Issuer held by a parent corporation, if such person "beneficially owns" (as
defined above), directly or indirectly, more than 50% of the voting power of the
Voting Stock of such parent corporation); (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Issuer or Parent (together with any new directors
whose election by such Board of Directors or whose nomination for election by
the shareholders of the Issuer or Parent was approved by a vote of at least a
majority of the directors of the Issuer 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 or is a designee of the Permitted Holders or
was nominated or elected by such Permitted Holders or any of their designees)
cease for any reason to constitute a majority of the Board of Directors of the
Issuer or Parent then in office; (iii) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Issuer and its Restricted Subsidiaries taken as a whole to any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) other than a
Permitted Holder or Parent; or (iv) the adoption by the stockholders of a plan
for the liquidation or dissolution of the Issuer or Parent.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Details, Inc., a California corporation and any and
all successors thereto.
"Consolidated Coverage Ratio" as of any date of determination means,
with respect to any Person, the ratio of (i) the aggregate amount of
Consolidated EBITDA of such Person for the period of the
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most recent four consecutive fiscal quarters ending prior to the date of such
determination to (ii) Consolidated Interest Expense for such four fiscal
quarters (in each case, determined, for each fiscal quarter (or portion thereof)
of the four fiscal quarters ending prior to or including the Issue Date, on a
pro forma basis to give effect to the Recapitalization Transactions, the Initial
Offerings and the application of the proceeds thereof, the NTI Acquisition, the
Cuplex Acquisition, DCI Transactions, the Offering and the application of the
proceeds thereof as if they had occurred at the beginning of such four-quarter
period (adjusted for any pro forma expense and cost reductions and related
adjustments that are directly attributable to the Recapitalization Transactions,
the Initial Offerings and the application of the proceeds thereof, the NTI
Acquisition, the Cuplex Acquisition, the DCI Transactions and the Offering));
provided, however, that (1) If the Issuer or any Restricted Subsidiary (x) has
Incurred any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, Consolidated EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such
period (except that in making such computation, the amount of Indebtedness under
any revolving credit facility outstanding on the date of such calculation shall
be computed based on (A) the average daily balance of such Indebtedness during
such four fiscal quarters or such shorter period for which such facility was
outstanding or (B) if such facility was created after the end of such four
fiscal quarters, the average daily balance of such Indebtedness during the
period from the date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, or (y) has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid), Consolidated EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving effect on a
pro forma basis to such discharge of such Indebtedness, including with the
proceeds of such new Indebtedness, as if such discharge had occurred on the
first day of such period, (2) if since the beginning of such period the Issuer
or any Restricted Subsidiary shall have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Asset Disposition, the Consolidated EBITDA for such period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive) directly
attributable to the assets which are the subject of such Asset Disposition for
such period or increased by an amount equal to the Consolidated EBITDA (if
negative) directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of the
Issuer or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Issuer and its continuing Restricted Subsidiaries
in connection with such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such Restricted
Subsidiary to the extent the Issuer and its continuing Restricted Subsidiaries
are no longer liable for such Indebtedness after such sale), (3) if since the
beginning of such period the Issuer or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an acquisition of assets,
including any acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, Consolidated EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period (adjusted for
any pro forma expense and cost reductions and related adjustments calculated on
a basis consistent with Regulation S-X under the Act) and (4) if since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or any
Investment that would have required an adjustment pursuant to clause (2) or (3)
above if made by the Issuer or a Restricted Subsidiary during such period,
Consolidated EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Disposition or
Investment occurred on the first day of such period. For purposes of this
definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in
connection therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of the
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Issuer. If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated EBITDA" for any period means the Consolidated Net
Income for such period, plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense, (iv) amortization of intangibles and (v)
other non-cash charges reducing Consolidated Net Income (excluding any such non-
cash charge to the extent it represents an accrual of or reserve for cash
charges in any future period or amortization of a prepaid cash expense that was
paid in a prior period not included in the calculation) and less, to the extent
added in calculating Consolidated Net Income, non-cash items increasing
Consolidated Net Income (excluding such non-cash items to the extent they
represent an accrual for cash receipts to be received prior to the Stated
Maturity of the Discount Notes) for such period. Notwithstanding the foregoing,
the provision for taxes based on the income or profits of, and the interest,
depreciation and amortization of, a Restricted Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated EBITDA of such Person
only to the extent (and in the same proportion) that the net income of such
Subsidiary was included in calculating the Consolidated Net Income of such
Person.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Issuer and its Restricted Subsidiaries on a consolidated
basis determined in accordance with GAAP, plus, to the extent not included in
such interest expense, (i) interest expense attributable to Capitalized Lease
Obligations and the interest portion of rent expense associated with
Attributable Indebtedness in respect of the relevant lease giving rise thereto,
determined as if such lease were a capitalized lease in accordance with GAAP,
(ii) amortization of debt discount and debt issuance cost, (iii) capitalized
interest, (iv) non-cash interest expense, (v) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (vi) interest actually paid by the Issuer or any such Subsidiary
under any Guarantee of Indebtedness or other obligation of any other Person,
(vii) net costs associated with Hedging Obligations (including amortization of
fees), (viii) dividends in respect of all Disqualified Stock of the Issuer and
any Restricted Subsidiaries, in each case, held by Persons other than the Issuer
or a Wholly-Owned Subsidiary and (ix) the cash contributions to any employee
stock ownership plan or similar trust to the extent such contributions are used
by such plan or trust to pay interest or fees to any Person (other than the
Issuer) in connection with Indebtedness Incurred by such plan or trust to
purchase Capital Stock of the Issuer; provided, however, that there shall be
excluded therefrom any such interest expense of any Unrestricted Subsidiary to
the extent the related Indebtedness is not Guaranteed or paid by the Issuer or
any Restricted Subsidiary. For purposes of the foregoing, total interest expense
shall be determined after giving effect to any net payments made or received by
the Issuer and its Subsidiaries with respect to Interest Rate Agreements.
Notwithstanding the foregoing, the Consolidated Interest Expense with respect to
any Restricted Subsidiary of the Issuer that was not a Wholly-Owned Subsidiary
shall be included only to the extent (and in the same proportion) that the net
income of such Restricted Subsidiary was included in calculating Consolidated
Net Income.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Issuer and its Restricted Subsidiaries on a consolidated basis determined
in accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any Person if such
Person is not a Restricted Subsidiary, except that (A) subject to the
limitations contained in (iv) below, the Issuer's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such Person
during such period to the Issuer or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other distribution to
a Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Issuer's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period shall be included in determining such
Consolidated Net Income to the extent such loss has been funded with cash from
the Issuer or a Restricted Subsidiary; (ii) any net income (loss) of any Person
acquired by the Issuer or a Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition; (iii) any net income of any
Restricted Subsidiary if such Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly,
-5-
to the Issuer, except that (A) subject to the limitations contained in (iv)
below the Issuer's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Issuer or another Restricted Subsidiary as
a dividend (subject, in the case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause) and (B) the Issuer's equity in a net
loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income; (iv) any gain or loss realized upon
the sale or other disposition of any property, plant or equipment of the Issuer
or its consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain or loss realized upon the sale or other disposition of
any Capital Stock of any Person; (v) any extraordinary gain or loss, (vi) any
non-cash compensation charge for employee stock options or other stock awards,
(vii) non-cash, non-recurring charges reducing Consolidated Net Income
(excluding any such non-cash charge to the extent it represents an accrual of or
reserve for cash charges in any future period or amortization of prepaid cash
expense that was paid in a prior period not included in the calculation); (viii)
non-cash, non-recurring items increasing Consolidated Net Income (excluding such
non-cash items to the extent they represent an accrual for cash receipts to be
received prior to the Stated Maturity of the Discount Notes); and (ix) the
cumulative effect of a change in accounting principles.
"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Issuer and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Issuer ending prior to the taking of any action for the
purpose of which the determination is being made, as (i) the par or stated value
of all outstanding Capital Stock of the Issuer plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained earnings
or earned surplus less (A) any accumulated deficit and (B) any amounts
attributable to Disqualified Stock.
"Consolidated Tangible Assets" means, with respect to any Person, as
of any date of determination, the total assets, less goodwill, deferred
financing costs and other intangibles less accumulated amortization, shown on
the balance sheet of such Person and its Restricted Subsidiaries as of the most
recent date for which such balance sheet is available, determined on a
consolidated basis in accordance with GAAP.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Issuer in accordance with GAAP;
provided, however, that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of the Issuer in any
Unrestricted Subsidiary will be accounted for as an Investment. The term
"Consolidated" has a correlative meaning.
The "Corporate Trust Office" of the Trustee is the office of
____________ at ___________.
"Cuplex Transaction" means the acquisition of all of the outstanding
shares of capital stock and related real estate of Cuplex, Inc. by Dynamic
Circuits, Inc. on October 9, 1997.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"DCI Contribution Agreement" means the Stock Contribution and Merger
Agreement dated July 23, 1998 among Details Holdings Corp., Dynamic Circuits,
Inc. and the stockholders of Dynamic Circuits, Inc., as amended from time to
time.
"DCI Transactions" means the transactions contemplated by the DCI
Contribution Agreement and all other transactions related thereto.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Details Capital" means Details Capital Corporation, a California
corporation.
-6-
"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Issuer.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by the Issuer or one of its Restricted
Subsidiaries in connection with an Asset Disposition that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate executed
by the principal executive officer and the principal financial officer of the
Issuer or such Restricted Subsidiary, less the amount of cash or Cash
Equivalents received in connection with a sale of such Designated Noncash
Consideration. Such Officers' Certificate shall state the basis of such
valuation, which shall be as determined by an Independent Appraiser with respect
to the receipt in one or a series of related transactions of Designated Noncash
Consideration with a fair market value in excess of $10 million.
"Discount Notes" shall have the meaning assigned to such term in the
Recitals of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable) or upon the happening
of any event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding capital stock which is convertible or exchangeable
solely at the option of the Issuer or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Discount Notes, provided, that
only the portion of Capital Stock which so matures or is mandatorily redeemable,
is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to such Stated Maturity shall be deemed to be Disqualified
Stock.
"Equity Offering" means an offering for cash by the Issuer of its
common stock, or options, warrants or rights with respect to its common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of the Note Purchase Agreement,
including those 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. All ratios and computations based on GAAP
contained in the Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Discount
Note is registered in the Register.
"Holdings" means Details Holdings Corp. (formerly known as Details,
Inc.), a California corporation.
-7-
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto); (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services (except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking delivery and
title thereto or the completion of such services; (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such Person; (vi) the amount of
all obligations of such Person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock (but excluding, in each case, any
accrued dividends); (vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such Indebtedness shall be the
lesser of (A) the fair market value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons; (viii) all
Indebtedness of other Persons to the extent Guaranteed by such Person; and (ix)
to the extent not otherwise included in this definition, net obligations of such
Person under Currency Agreements and Interest Rate Agreements (the amount of any
such obligations to be equal at any time to the termination value of such
agreement or arrangement giving rise to such obligation that would be payable by
such Person at such time). The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Appraiser" means, with respect to any transaction or
series of related transactions, an independent, nationally recognized appraisal
or investment banking firm or other expert with experience in evaluating or
appraising the terms and conditions of such transaction or series of related
transactions.
"Initial Accreted Value" means, per one dollar in stated principal
amount at maturity of Discount Notes, the Aggregate Initial Accreted Value
divided by $66,809,539.40.
"Initial Offerings" means collectively, the offerings of the Capital
Discount Notes and the Senior Subordinated Notes.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Intermediate Holdings" means Details Intermediate Holdings Corp. a
California corporation, or any successor thereto which assumes the obligations
under the Discount Notes pursuant to the Note Purchase Agreement and/or the
Indenture.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by, such Person. For purposes
of Section 1009, (i) "Investment" shall include the portion (proportionate to
the Issuer's equity interest in a Restricted Subsidiary
-8-
to be designated as an Unrestricted Subsidiary) of the fair market value of the
net assets of such Restricted Subsidiary of the Issuer at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Issuer shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Issuer's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Issuer's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so re-designated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors of
the Issuer. If the Issuer or any Restricted Subsidiary of the Issuer sells or
otherwise disposes of any Common Stock of any direct or indirect Restricted
Subsidiary of the Issuer such that, after giving effect to any such sale or
disposition, the Issuer no longer owns, directly or indirectly, 100% of the
outstanding Common Stock of such Restricted Subsidiary, the Issuer shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Common Stock of such Restricted Subsidiary
not sold or disposed of.
"Issue Date" means July 23, 1998.
"Issuer" means Details Intermediate Holdings Corp. a California
corporation, or any successor thereto which assumes the obligations under the
Discount Notes pursuant to the Note Purchase Agreement and/or the Indenture.
"Management Agreement" means the Management Agreement among the
Company, Holdings and Xxxx Capital, Inc. (and its permitted successors and
assigns thereunder) as in effect on the Issue Date.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP, as a consequence of such Asset Disposition, (ii) all
payments made on any Indebtedness which is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon such assets, or
which must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition and (iv) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any liabilities
associated with the assets disposed of in such Asset Disposition and retained by
the Issuer or any Restricted Subsidiary after such Asset Disposition.
"New Discount Notes" shall have the meaning assigned to such term in
the Recitals of this Indenture.
"Non-Capital Subsidiary" means any Subsidiary of the Issuer other than
(i) Details Capital or (ii) a Subsidiary of Details Capital.
"Note Purchase Agreement" means the Note Purchase Agreement dated July
23, 1998 between Intermediate Holdings and Sankaty High Yield Asset Partners,
L.P., as amended from time to time.
"NTI Acquisition" means the acquisition of all of the common stock of
Colorado Springs Circuits, Inc. by the Company on December 22, 1997.
"Offering" means the offering of the Discount Notes.
-9-
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Issuer.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Issuer or the Trustee.
"Original Discount Notes" shall have the meaning assigned to such term
in the Recitals of this Indenture.
"Parent" means the parent corporation of the Issuer, if any, or any
person for which the Issuer or the Parent thereof is a direct or indirect
Wholly-Owned Subsidiary.
"Permitted Holders" means Xxxx Capital, Inc. and any Affiliate thereof
or any wholly-owned Subsidiary of the Parent (for purposes of the definition of
a "Change of Control").
"Permitted Investment" means an Investment by the Issuer or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Issuer or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) cash, Cash Equivalents and Temporary Cash Investments; (iv) receivables
owing to the Issuer or any Restricted Subsidiary created or acquired in the
ordinary course of business; (v) payroll, travel and similar advances made in
the ordinary course of business; (vi) loans or advances to employees and
officers made in the ordinary course of business; (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
business and owing to the Issuer or any Restricted Subsidiary or in satisfaction
of judgments; and (viii) Currency Agreements and Interest Rate Agreements
entered into in the ordinary course of the Issuer's or its Restricted
Subsidiaries' businesses and otherwise in compliance with the Indenture; (ix)
Investments in securities of trade creditors or customers received pursuant to
any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such trade creditors or customers; (x) the Subsidiary Guarantees,
guarantees by the Company of Indebtedness otherwise permitted to be Incurred by
Restricted Subsidiaries of the Company under the indenture for the Senior
Subordinated Notes and guarantees by Details Capital of indebtedness otherwise
permitted to be incurred by Restricted Subsidiaries of Details Capital under the
indenture for the Capital Discount Notes; (xi) Investments the payment for which
consists exclusively of Capital Stock (other than Disqualified Stock) of the
Issuer; provided that the fair market value of such Investments shall not be
counted under clause (3)(B) of paragraph (a) of Section 1009; (xii) Investments
received by the Issuer or its Restricted Subsidiaries as consideration for asset
dispositions, including Asset Dispositions; provided in the case of an Asset
Disposition, such Asset Disposition is effected in compliance with Section 1016;
and (xiii) other Investments in an aggregate amount outstanding at any time not
to exceed the greater of (A) $7.5 million and (B) 5% of Total Consolidated
Assets.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision hereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
A "Public Market" exists at any time with respect to the common stock
of the Issuer if the Issuer or the common stock of the Issuer is then registered
with the SEC pursuant to Section 12(b) or 12(g) of Exchange Act and traded
either on a national securities exchange or in the National Association of
Securities Dealers Automated Quotation System.
-10-
"QIB" shall mean a Qualified Institutional Buyer.
"Qualified Institutional Buyer" shall have the meaning ascribed
thereto under Rule 144A of the Securities Act.
"Qualifying Public Offering" means a public offering of common stock
of the Parent registered under the Securities Act which yields aggregate
proceeds of at least $10,000,000 to Xxxx Capital Fund V, L.P., Xxxx Capital Fund
V-B, L.P., BCIP Associates, BCIP Trust Associates, LP and any other affiliated
equity fund for which Xxxx Capital, Inc. serves as the adviser collectively
(the "Bain Entities") or in which the Bain Entities sell at least 5% of the
-------------
Common Stock of the Parent held by the Bain Entities on the date of the Note
Purchase Agreement.
"Recapitalization Agreement" means the Recapitalization Agreement
dated as of October 4, 1997, as amended, among Holdings, Holdings' stockholders
and DI Acquisition Corp.
"Recapitalization Transactions" means collectively, the transactions
contemplated by the Recapitalization Agreement and all other transactions
related thereto, including the merger of DI Acquisition Corp with and into
Holdings as the surviving corporation on October 28, 1997 and the initial
borrowings under credit facilities of Holdings and its Subsidiaries in
connection with such transactions.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of the Note Purchase Agreement or Incurred in compliance with the Indenture
(including Indebtedness of the Issuer that refinances Indebtedness of any
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including Indebtedness
that refinances Refinancing Indebtedness, provided, however, that (i) only with
respect to Indebtedness described under subclause (y) of clause (b)(iv) in
Section 1011 and subclause (i) of Section 1010A, the Refinancing Indebtedness
has a Weighted Average Life to Maturity equal to or greater than the Weighted
Average Life to Maturity of the Indebtedness being refinanced (other than
Indebtedness which is Senior Indebtedness referred to in clause (iv) under such
covenant) and (ii) such Refinancing Indebtedness is Incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the sum of the aggregate principal amount
(or if issued with original issue discount, the aggregate accreted value) then
outstanding (plus fees and expenses, including any premium and defeasance costs)
of the Indebtedness being refinanced.
"Registrable Discount Notes" means, at any time, New Discount Notes
that (i) have not previously been sold in a public offering under the Securities
Act or in a "brokers transaction" within the meaning of Rule 144 under the
Securities Act and (ii) are not eligible to be sold pursuant to Rule 144(k)
under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of July 23, 1998 by and between the Issuer and Sankaty High
Yield Asset Partners, L.P., as amended from time to time.
"Regular Record Date" means, with respect to any Interest Payment
Date, the June 15 or December 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Related Business" means any business which is the same as or related,
ancillary or complementary to any of the businesses in which the Issuer and its
Restricted Subsidiaries are primarily engaged on the date of the Note Purchase
Agreement.
"Representative" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
-11-
"Restricted Subsidiary" means any Subsidiary of the Issuer other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Issuer or a Restricted Subsidiary
transfers such property to a Person and the Issuer or a Subsidiary leases it
from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Registration Statement" means a registration statement under
the Securities Act with respect to the registration of the sale of New Discount
Notes.
"Senior Credit Agreement" means (i) the senior secured Credit
Agreement dated July 23,1998, among the Company, Dynamic Circuits, Inc., Details
Capital, Bankers Trust Company, as documentation and co-syndication agent, The
Chase Manhattan Bank, as collateral, co-syndication and administrative agent,
and the other parties thereto from time to time, as the same may be amended,
supplemented or otherwise modified from time to time and any guarantees issued
thereunder and (ii) any renewal, extension, refunding, restructuring,
replacement or refinancing thereof (whether with the original administrative,
documentation and syndication agents and lenders or other agents or other
lenders and whether provided under the original Senior Credit Agreement or any
other credit or other agreement or indenture).
"Senior Indebtedness" is defined, whether outstanding on the Issue
Date or thereafter issued, created, incurred or assumed, as the Bank
Indebtedness and all other Indebtedness of the Company, including interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) thereon
and fees relating thereto, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that the
obligations in respect of such Indebtedness are not superior in right of, or are
subordinate to, payment to the Senior Subordinated Notes; provided, however,
that Senior Indebtedness will not include (i) any obligation of the Company to
any Subsidiary, (ii) any liability for Federal, state, foreign, local or other
taxes owed or owing by the Company, (iii) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (iv)
any Indebtedness, Guarantee or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness, Guarantee
or obligation of the Company, including any Senior Subordinated Indebtedness and
any Subordinated Obligations or (v) any Capital Stock.
"Senior Subordinated Indebtedness" means the Senior Subordinated Notes
and any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Senior Subordinated Notes in right
of payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Senior Subordinated Notes" means the $100.0 million aggregate
principal amount of 10% Senior Subordinated Notes due 2005 of the Company.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
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"Subordinated Obligation" means, as to any Person, any Indebtedness of
such Person (whether outstanding on the Issue Date or thereafter Incurred) which
is subordinate or junior in right of payment to the Senior Subordinated Notes
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless otherwise specified herein, each reference
to a Subsidiary shall refer to a Subsidiary of the Issuer.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Senior Subordinated Notes by any Restricted Subsidiary of the Company
pursuant to the terms of the indenture for the Senior Subordinated Notes, and,
collectively, all such Guarantees.
"Successor Company" shall have the meaning assigned thereto in Section
801.
"Temporary Cash Investments" means any of the following: (i) any
Investment in direct obligations of the United States of America or any agency
thereof or obligations Guaranteed by the United States of America or any agency
thereof, (ii) Investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $250 million (or the foreign currency
equivalent thereof) and whose long-term debt, or whose parent holding company's
long-term debt, is rated "A" (or such similar equivalent rating) or higher by at
least one nationally recognized statistical rating organization (as defined in
Rule 436 under the Securities Act), (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in clause
(i) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not more than
180 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Issuer) organized and in existence under the laws of the United
States of America or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group, (v) Investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by Xxxxx'x
Investors Service, Inc. and (vi) Investments in mutual funds whose investment
guidelines restrict such funds' investments to those satisfying the provisions
of clauses (i) through (v) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture.
"Total Consolidated Assets" means, as of any date of determination,
the total assets shown on the balance sheet of Holdings and its Restricted
Subsidiaries as of the most recent date for which such balance sheet is
available, determined on a consolidated basis in accordance with GAAP.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means an officer of the Trustee assigned by the
Trustee to administer its corporate trust matters or to any other officer of the
Trustee to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
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"Unrestricted Subsidiary" means (i) any Subsidiary of the Issuer that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Issuer (including any newly acquired or newly formed Subsidiary of the
Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Issuer or any Restricted Subsidiary of the Issuer
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the Subsidiary to be so designated has total
consolidated assets of $10,000 or less or (B) if such Subsidiary has
consolidated assets greater than $10,000, then such designation would be
permitted under Section 1009. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness under Section 1011 and (y) no Default shall
have occurred and be continuing. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the Board Resolution giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Issuer,
all of the Capital Stock of which (other than directors' qualifying shares) is
owned by the Issuer or another Wholly-Owned Subsidiary.
SECTION 102. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture, the Issuer and any other
obligor on the New Discount Notes (if applicable) shall furnish to the Trustee
an Officers' Certificate in form and substance reasonably acceptable to the
Trustee stating that all conditions precedent, if any, provided for in this
Indenture (including any covenant compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided pursuant to Section 1019(a)) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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;
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(3) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary
to enable him or it to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer or any other
obligor on the New Discount Notes may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Issuer or any other obligor on the New Discount Notes stating
that the information with respect to such factual matters is in the possession
of the Issuer or any other obligor on the New Discount Notes unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Issuer, if made in the
manner provided in this Section 104.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of New Discount Notes
held by any Person, and the date of holding the same, shall be proved by the
Note Register.
(d) If the Issuer shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Issuer may,
at its option, by or pursuant to a Board
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Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Issuer shall have no obligation to do so.
Notwithstanding TIA Section 316(c), such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of outstanding New
Discount Notes have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the outstanding New Discount Notes shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any New Discount Note shall bind every
future Holder of the same New Discount Note and the Holder of every New Discount
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof (including in accordance with Section 310) in respect of
anything done, omitted or suffered to be done by the Trustee, any Paying Agent
or the Issuer in reliance thereon, whether or not notation of such action is
made upon such New Discount Note.
SECTION 105. Notices, Etc., to Trustee and the Issuer.
----------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Issuer or any other obligor
on the New Notes shall be sufficient for every purpose hereunder if made, given,
furnished or delivered in writing and mailed, first-class postage prepaid, or
delivered by recognized overnight courier, to or with the Trustee and received
at its Corporate Trust Office, Attention: Corporate Trust Administration.
(2) the Issuer by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given,furnished or delivered, in writing, or mailed, first-class postage
prepaid, or delivered by recognized overnight courier, to the Issuer addressed
to it and received at the address of its principal office specified in the first
paragraph of this Indenture, or at any other address previously furnished in
writing to the Trustee by the Issuer.
SECTION 106. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice of any event to Holders by
the Issuer or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder, at his address as it appears in the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. Neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be
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satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice for every purpose hereunder.
If the Issuer mails any notice or communication to any Holder, it
shall mail a copy to the Trustee at the same time.
SECTION 107. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause.
-------------------
In case any provision in this Indenture or in the New Discount Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the New Discount Notes, express or
implied, shall give to any Person, (other than the parties hereto, any agent and
their successors hereunder and each of the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
-------------
THIS INDENTURE AND THE NEW DISCOUNT NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO
THE GREATEST EXTENT PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE
APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
UPON THE EFFECTIVENESS OF A SELLER REGISTRATION STATEMENT, THIS INDENTURE SHALL
BE SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT THAT ARE REQUIRED TO BE
PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH
PROVISIONS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE U.S. FEDERAL COURTS, IN EACH CASE
SITTING IN THE BOROUGH OF MANHATTAN, AND WAIVES ANY OBJECTION AS TO VENUE OR
FORUM NON CONVENIENS.
SECTION 112. Legal Holidays.
--------------
In any case where any interest payment date, any date established for
payment of Defaulted Interest pursuant to Section 311 or redemption date or
Stated Maturity of any New Discount Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the New Discount
Notes) payment of principal (or premium, if any) or interest need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the interest payment date or date established for
payment of Defaulted Interest pursuant to Section 311, Redemption Date, or at
the Stated Maturity or Maturity; provided that no interest shall accrue for the
period from and after such interest payment date, redemption date or date
established for payment of Defaulted Interest pursuant to Section 311, Stated
Maturity or Maturity, as the case may be, to the next succeeding Business Day.
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SECTION 113. No Personal Liability of Directors, Officers, Employees,
--------------------------------------------------------
Stockholders or Incorporators.
-----------------------------
No director, officer, employee, incorporator or stockholders, as such,
of the Issuer shall have any liability for any obligations of the Issuer under
the New Discount Notes, this Indenture or for any claim based on, in respect of,
or by reason of, such obligations or their creations. Each Holder by accepting
a New Discount Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the New Discount
Notes.
SECTION 114. Counterparts.
------------
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
SECTION 115. Communications by Holders with Other Holders.
--------------------------------------------
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the New Discount Notes.
The Issuer, the Trustee, the Note Registrar and anyone else shall have the
protection of TIA (S) 312(c).
200. ARTICLE TWO. NOTE FORMS
SECTION 201. Forms Generally.
---------------
The New Discount Notes and the Trustee's certificate of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with applicable laws or the rules of any securities
exchange or Depositary or as may, consistently herewith, be determined by the
officers executing such New Discount Notes, as evidenced by their execution of
the New Discount Notes. Any portion of the text of any New Discount Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the New Discount Note. Each New Discount Note shall be dated the date
of its authentication.
New Discount Notes shall be issued in certificated form, substantially
set forth in Section 203, provided that New Discount Notes offered and sold
pursuant to an effective Registration Statement may be exchanged for New
Discount Notes issued in the form of a permanent global New Discount Note,
without interest coupons, substantially in the form set forth in this Article (a
"Global Discount Note") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Issuer and authenticated by the Trustee as
hereinafter provided. The Global Discount Note may be represented by more than
one certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Global Discount Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
The definitive New Discount Notes shall be printed, lithographed or
engraved on steel-engraved borders or may be produced in any other manner, all
as determined by the officers of the Issuer executing such New Discount Notes,
as evidenced by their execution of such New Discount Notes.
SECTION 202. Restrictive Legends.
-------------------
Unless and until (i) a New Discount Note is sold under an effective
Registration Statement pursuant to the Securities Act or (ii) a New Discount
Note is distributed to the public pursuant to Rule 144
-18-
under the Securities Act, such New Discount Note shall bear the following legend
(the "Private Placement Legend") on the face thereof:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION
IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF July
23, 1998 AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE
ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG
AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF SECTION 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL
AMOUNT OF $250,000 OF SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) ABOVE TO REQUIRE THE DELIVERY
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN THE CASE OF THE FOREGOING CLAUSE (E),
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE ISSUER AND THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE.
The Global Discount Notes, whether or not previously sold pursuant to
an effective Registration Statement under the Securities Act or distributed to
the public pursuant to Rule 144 under the Securities Act, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER REPRESENTATIVE OF DTC
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
-19-
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 306 AND 307 OF THE INDENTURE.
The New Discount Notes shall also bear the following legend on the
face thereof:
THIS NEW DISCOUNT NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT
FOR THE PURPOSES OF SECTIONS 1271-1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND
YIELD TO MATURITY OF THE NEW DISCOUNT NOTES MAY BE OBTAINED BY CONTACTING THE
ISSUER'S __________________ DEPARTMENT, TELEPHONE NO. (___) ________.
SECTION 203. Form of New Discount Note.
-------------------------
No. ___ Stated Principal Amount at Maturity $______________
[CUSIP NO. ____________]
13 1/2% Series B Senior Discount Note due 2008
Details Intermediate Holdings Corp., a California corporation promises to
pay to ___________, or registered assigns, the principal sum of
__________________ Dollars on June 30, 2008.
Interest Payment Dates: June 30 and December 31.
Record Dates: June 15 and December 15.
This New Discount Note shall not bear interest prior to June 30, 2003.
From July 23, 1998 through June 30, 2003, the Accreted Value of this New
Discount Note will increase as specified on the reverse side hereof.
Additional provisions of this New Discount Note are set forth on the other
side of this New Discount Note.
IN WITNESS WHEREOF, the Issuer has caused this New Discount Note to be
signed manually or by facsimile by its authorized Officers.
Dated: ___________
DETAILS INTERMEDIATE HOLDINGS CORP.
By:___________________
Name
Title
By:___________________
Name
Title
-20-
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
[NAME OF TRUSTEE]
as Trustee, certifies
that this is one of the
New Discount Notes referred to
in the Indenture.
By_______________________
Authorized Signatory
[FORM OF REVERSE SIDE OF NEW DISCOUNT NOTE]
13 1/2% Series B Senior Discount Note due 2008
1. Interest
--------
Details Intermediate Holdings Corp., a California corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Issuer") promises to pay interest on the
principal amount of this New Discount Note as described below.
The 13 1/2% Series B Senior Discount Notes due 2008 (the "New Discount
Notes") will accrete in value from their Initial Accreted Value until June 30,
2003 at a rate of 13 1/2% per annum, compounded semiannually, to an aggregate
principal amount of $66,809,539.40 at June 30, 2003. Cash interest will not
accrue on the New Discount Notes prior to June 30, 2003. Thereafter, interest
will accrue at the rate of 13 1/2% per annum and will be payable semiannually in
cash and in arrears to the Holders of record on each June 15 or December 15
immediately preceding the interest payment date on June 30 and December 31 of
each year, commencing December 31, 2003. Cash interest on the New Discount Notes
will accrue from the most recent interest payment date to which interest has
been paid or, if no interest has been paid, from June 30, 2003. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months. For
convenience, all references herein to principal amount at maturity are to stated
principal amount at maturity without taking into account the payment required by
Section 2 hereof. All references herein to outstanding principal amount for the
purposes of calculating interest and principal payments and redemption prices
shall take into account any payment pursuant to Section 2 hereof.
2. Amounts Payable on December 31, 2003
------------------------------------
For each $1,000 in principal amount of New Discount Notes outstanding on
December 31, 2003, $427.16 will be due and payable in cash on December 31, 2003
representing a payment of a portion of principal of such Original Discount
Notes.
3. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on the New Discount Notes is due and payable, the
Issuer shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Issuer
will pay interest (except defaulted interest) to the Persons who are registered
Holders of New Discount Notes at the close of business on the June 15 or
December 15 next preceding the interest payment date even if the New Discount
Notes are canceled, repurchased or redeemed after the record date and on or
before the interest payment date. Holders must surrender New Discount Notes to a
Paying Agent to collect principal payments. The Issuer will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Issuer may pay
interest by check payable in such money. It may mail an interest check to a
Holder's registered address.
-21-
4. Trustee, Paying Agent and Registrar
-----------------------------------
Initially, [Name of Trustee] ("Trustee"), will act as Trustee, Paying Agent
and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or
co-registrar without notice to any Noteholder. The Issuer or any of its
domestically incorporated Wholly-Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
5. Indenture
---------
The Issuer issued the New Discount Notes under an Indenture dated as of
______________ (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Issuer and the
Trustee. The terms of the New Discount Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "Act"). Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The New Discount Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those
terms.
The New Discount Notes are unsecured senior obligations of the Issuer
limited to $66,809,539.40 aggregate principal amount at maturity (without taking
into account the payment required by clause (c) of this Section 301 and Section
2 of the New Discount Notes and subject to Section 310 of the Indenture). This
New Discount Note is one of the New Discount Notes referred to in the Indenture.
The New Discount Notes evidence indebtedness previously evidenced by the
Original Discount Notes which were issued pursuant to the Note Purchase
Agreement. The Discount Notes include the Original Discount Notes and any New
Discount Notes issued in exchange for the Original Discount Notes pursuant to
the Note Purchase Agreement. The Indenture imposes certain limitations on the
Incurrence of Indebtedness by the Issuer, Details Capital, the Company and the
Issuer's Restricted Subsidiaries, the payment of dividends on, and the purchase
or redemption of, Capital Stock of the Issuer and its Restricted Subsidiaries,
the sale or transfer of assets and Capital Stock of Restricted Subsidiaries,
investments of the Issuer and its Restricted Subsidiaries and transactions with
Affiliates. In addition, the Indenture limits the ability of the Issuer and its
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
6. Optional Redemption
-------------------
The New Discount Notes will be redeemable, at the Issuer's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior notice
mailed by first-class mail to each Holder's registered address, at the following
redemption prices, plus accrued and unpaid interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date):
(a) If redeemed on or prior to June 30, 2003 the redemption price will be an
amount sufficient to generate an internal rate of return per annum on the
Initial Accreted Value of such New Discount Notes equal to the percentage set
forth below with respect to the redemption date, compounded annually, treating
the Initial Accreted Value of such New Discount Notes as having been paid on
the Issue Date:
Date of Redemption Internal Rate of Return
------------------ -----------------------
Before June 30, 1999 20.0%
July 1, 1999 to June 30, 2000 20.0%
July 1, 2000 to June 30, 2001 20.0%
July 1, 2001 to June 30, 2002 19.0%
July 1, 2002 to June 30, 2003 18.0%
-22-
(b) If redeemed during the 12-month period commencing on July 1 of the years
set forth below the redemption price, before taking into account accrued and
unpaid interest and, expressed as a percentage of outstanding principal amount
will be:
Period Redemption Price
------ -----------------
2003 106.75%
2004 104.50%
2005 102.25%
2006 and thereafter 100.00%
7. Selection
---------
In the case of any partial redemption, selection of the New Discount Notes
for redemption will be made by the Trustee on a pro rata basis, although no New
Discount Note of $100,000 in original principal amount at maturity or less will
be redeemed in part. If any New Discount Note is to be redeemed in part only,
the notice of redemption relating to such New Discount Note shall state the
portion of the principal amount at maturity thereof to be redeemed. A new New
Discount Note in principal amount at maturity equal to the unredeemed portion
thereof will be issued in the name of the holder thereof upon cancellation of
the original New Discount Note.
8. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of New Discount Notes to be
redeemed at his registered address. New Discount Notes in denominations of
principal amount at maturity larger than $100,000 may be redeemed in part but
only in whole multiples of $100,000. If money sufficient to pay the redemption
price of and accrued and unpaid interest on all New Discount Notes (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such New Discount
Notes (or such portions thereof) called for redemption.
9. Put Provisions
--------------
Upon the occurrence of a Change Control, each holder will have the right to
require the Issuer to repurchase all or any part of such Holder's New Discount
Notes with respect to which the Issuer has not exercised its right to redeem
such New Discount Notes as described under Optional Redemption above at a
purchase price in cash equal to 101% of the outstanding principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date) or, in the case of purchases of New
Discount Notes prior to June 30, 2003, at a purchase price equal to 101% of the
Accreted Value thereof as of the date of purchase.
Upon the occurrence of a Qualifying Public Offering, each holder will have
the right to require the Issuer to repurchase all or any part of such holder's
New Discount Notes with respect to which the Issuer has not exercised its right
to redeem such New Discount Notes as described under "Optional Redemption" above
at a purchase price in cash equal to the purchase price the Issuer would pay had
it elected to redeem such New Discount Notes as described under "Optional
Redemption" above (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
10. Denominations; Transfer; Exchange
---------------------------------
The New Discount Notes are in registered form without coupons in
denominations of principal amount at maturity or Accreted Value (as applicable)
of $100,000 and whole multiples of $100,000. A Holder may transfer or exchange
New Discount Notes in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes
-23-
and fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange of (i) any New Discount Note selected for
redemption (except, in the case of a New Discount Note to be redeemed in part,
the portion of the New Discount Note not to be redeemed) for a period beginning
15 days before a selection of New Discount Notes to be redeemed and ending on
the date of such selection or (ii) any New Discount Notes for a period beginning
15 days before an interest payment date and ending on such interest payment
date.
11. Persons Deemed Owners
---------------------
The registered holder of this New Discount Note may be treated as the owner
of it for all purposes.
12. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent shall pay the money back to the Issuer at its
request unless an abandoned property law designates another Person. After any
such payment, Holders entitled to the money must look only to the Issuer and not
to the Trustee for payment.
13. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Issuer at any
time may terminate some or all of its obligations under the New Discount Notes
and the Indenture if the Issuer deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the New
Discount Notes to redemption or maturity, as the case may be. The Issuer in its
sole discretion can defease the New Discount Notes.
14. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the New Discount Notes may be amended with the written consent of the Holders
of at least a majority in principal amount of the New Discount Notes then
outstanding and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
of the outstanding New Discount Notes. Without the consent of any Noteholder,
the Issuer and the Trustee may amend the Indenture or the New Discount Notes to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
8 of the Indenture, or to provide for uncertificated New Discount Notes in
addition to or in place of certificated New Discount Notes or to add guarantees
with respect to the New Discount Notes or to secure the New Discount Notes, or
to add additional covenants or surrender rights and powers conferred on the
Issuer, or to comply with any request of the SEC in connection with qualifying
the Indenture under the Act, or to make any change that does not adversely
affect the rights of any Noteholder.
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) a default in any payment
of interest on any New Discount Note when due, continued for 30 days, (ii) a
default in the payment of principal of any New Discount Note when due at its
Stated Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, except any failure by the Issuer to pay any amounts
that are due and payable solely pursuant to Section 301(c) of the Indenture and
Section 2 of this Discount Note (iii) the failure by the Issuer to comply for 30
days with certain of its obligations under the Indenture (other than a failure
to purchase New Discount Notes which shall constitute an Event of Default under
clause (ii) above), (iv) the failure by the Issuer to comply for 60 days after
notice with its other agreements contained in the Indenture, except any failure
by the Issuer to pay any amounts that are due and payable solely pursuant to
Section 301(c) of the Indenture and Section 2 of this Discount Note (v) the
failure by the Issuer or any Restricted Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default and if the
total amount of such Indebtedness unpaid or accelerated exceeds $10.0 million,
(vi) certain events of bankruptcy, insolvency or reorganization of the Issuer or
a Significant Subsidiary or (vii) the rendering of any judgment or decree for
the payment of money
-24-
in an amount in excess of $10.0 million against the Issuer or a Significant
Subsidiary and such judgment or decree remains undischarged or unstayed for a
period of 60 days after such judgment or decree becomes final and non-appealable
and is not discharged, waived or stayed. If a default occurs and is continuing
under clauses (iii) and (iv) above it will not be deemed an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding applicable New Discount Notes notify the Company of the default and
the Company does not cure such defect within the time specified in clauses (iii)
and (iv) above after receipt of such notice. Certain events of bankruptcy or
insolvency are Events of Default which will result in the New Discount Notes
being due and payable immediately upon the occurrence of such Events of Default.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the outstanding New Discount Notes by
notice to the Issuer and the Trustee may declare the principal of and accrued
and unpaid interest, if any, on all the New Discount Notes to be due and payable
immediately. Upon such a declaration, such principal and accrued and unpaid
interest shall be due and payable immediately. Under certain circumstances, the
holders of a majority in principal amount of the outstanding New Discount Notes
may rescind any such acceleration with respect to the New Discount Notes and its
consequences.
The failure of the Issuer to pay any amounts that are due and payable
solely pursuant to Section 301(c) of the Indenture and Section 2 hereof shall
give the Holders of New Discount Notes a right to xxx for failure to pay such
amounts when due and payable, but shall not give such Holders the right to
declare the principal of and accrued and unpaid interest on the New Discount
Notes, if any, to be due and payable.
Noteholders may not enforce the Indenture or the New Discount Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the New Discount Notes unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
New Discount Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Noteholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
(or if prior to June 30, 2003, the Accreted Value of) or interest) if it
determines that withholding notice is in their interest.
16. Trustee Dealings with the Issuer
--------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of New Discount Notes and may otherwise deal with and collect
obligations owed to it by the Issuer or its affiliates and may otherwise deal
with the Issuer or its affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Issuer shall
not have any liability for any obligations of the Issuer under the New Discount
Notes or the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a New Discount Note, each
Noteholder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the New Discount Notes.
18. Authentication
--------------
This New Discount Note shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this New Discount Note.
19. Registration Rights
-------------------
So long as this note constitutes a Registrable Discount Note, the Holder of
this New Discount Note is entitled to the benefits of the registration rights,
as provided in the Registration Rights Agreement.
-25-
20. Abbreviations
-------------
Customary abbreviations may be used in the name of a Noteholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
21. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Issuer has caused CUSIP numbers to be
printed on the New Discount Notes and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on
the New Discount Notes or as contained in any notice of redemption and reliance
may be placed only on the other identification numbers placed thereon.*/
-
22. Governing Law
-------------
THIS NEW DISCOUNT NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK EXCLUDING (TO THE GREATEST EXTENT
PERMISSIBLE BY LAW) ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF THE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
The Issuer will furnish to any Noteholder upon written request and without
charge to the Noteholder a copy of the Indenture. Requests may be made to:
Details Intermediate Holdings Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
_______________________________
*/ Include if applicable
-
-26-
ASSIGNMENT FORM
To assign this New Discount Note, fill in the form below:
I or we assign and transfer this New Discount Note to
___________________________________________________
(Print or type assignee's name, address and zip code)
___________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this New Discount Note on the
books of the Issuer. The agent may substitute another to act for him.
_______________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:_____________________________________
(Signature must be guaranteed)
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this New Discount Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for, STAMP), pursuant to S.E.C. Rule
17Ad-15.
In connection with any transfer or exchange of any of the New Discount Notes
evidenced by this certificate occurring prior to (i) the sale of such New
Discount Notes in a public offering registered under the Securities Act of 1933
and (ii) the date that is two years after the later of (x) the date of original
issuance of such New Discount Notes (or their predecessor, including without
limitation any predecessor Original Discount Notes) and (y) the last date, if
any, on which such New Discount Notes (or their predecessors, including without
limitation any predecessor Original Discount Notes) were owned by the Issuer or
any Affiliate of the Issuer, the undersigned confirms that such New Discount
Notes:
CHECK ONE BOX BELOW:
1 [_] are being acquired for the undersigned's own account, without
transfer; or
2 [_] are being transferred to the Issuer; or
3 [_] are being transferred pursuant to and in compliance with Rule
144A under the Securities Act of 1933; or
4 [_] are being transferred pursuant to an effective registration
statement under the Securities Act; or
5 [_] are being transferred pursuant to and in compliance with
Regulation S under the Securities Act of 1933; or
-27-
6 [_] are being transferred to an institutional "accredited investor"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933), that has furnished to the Trustee a
signed letter containing certain representations and agreements
(the form of which letter appears as Section 308 of the
Indenture); or
7 [_] are being transferred pursuant to another available exemption
from the registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee may refuse to register any of
the New Discount Notes evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (5),
(6) or (7) is checked, the Trustee or the Issuer may require, prior to
registering any such transfer of the New Discount Notes, in their sole
discretion, such legal opinions, certifications and other information as the
Trustee or the Issuer may reasonably request to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
__________________________________________________________
(Signature must be guaranteed)
____________________________________________________________
Signature
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
-28-
[TO BE ATTACHED TO GLOBAL DISCOUNT NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL DISCOUNT NOTE
The following increases or decreases in this Global Discount
Note have been made:
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Discount Note following signatory of Trustee or
Exchange Global Discount Note Global Discount Note such decrease or increase Discount Notes Custodian
-29-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this New Discount Note purchased by the
Issuer pursuant to Section 1015, 1015A or 1016 of the Indenture, check the box:
[_]
If you want to elect to have only part of this New Discount Note
purchased by the Issuer pursuant to Section 1015, 1015A or 1016 of the
Indenture, state the amount in principal amount at maturity (must be integral
multiple of $100,000): $________.
Date: __________ Your Signature _____________________________________________
(Sign exactly as your name appears on the
other side of the New Discount Note)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions) with
membership in the Securities Transfer Agents Medallion Program ("STAMP") or such
other signature guarantee medallion program as may be approved by the Note
Registrar in addition to or substitution for STAMP, pursuant to S.E.C. Rule
17Ad-15.
-30-
In connection with any transfer or exchange of any of the New Discount
Notes evidenced by this certificate occurring prior to (i) the sale of such New
Discount Notes in a public offering registered under the Securities Act of 1933
and (ii) the date that is two years after the later of (x) the date of original
issuance of such New Discount Notes (or their predecessor, including without
limitation any predecessor Original Discount Notes) and (y) the last date, if
any, on which such New Discount Notes (or their predecessors, including without
limitation any predecessor Original Discount Notes) were owned by the Issuer or
any Affiliate of the Issuer, the undersigned confirms that without utilizing any
general solicitation or general advertising that:
[Check One]
---------
[_] (a) this New Discount Note is being transferred in compliance with the
exemption from registration under the Securities Act of 1933, as
amended, provided by Rule 144A thereunder.
or
--
[_] (b) this New Discount Note is being transferred other than in accordance
with (a) above and documents are being furnished that comply with the
conditions of transfer set forth in this New Discount Note and the
Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Registrar
shall not be obligated to register this New Discount Note in the name of any
Person other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 307 of the Indenture
shall have been satisfied.
Date: _____________ _________________________________________________________
NOTICE: The signature must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or any
change whatsoever.
Signature Guarantee:____________________________________
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this New
Discount Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received such
information regarding the Issuer as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information and that it is aware
that the transferor is relying upon the undersigned's foregoing representations
in order to claim the exemption from registration provided by Rule 144A.
Date: ____________ _________________________________________
NOTICE: To be executed by an executive officer.
SECTION 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be in substantially
the following form:
-31-
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the New Discount Notes referred to in the within-mentioned
Indenture.
___________________________,
as Trustee
By ___________________
Authorized Signatory
Dated: ____________
SECTION 205. [Intentionally Omitted]
300. ARTICLE THREE. THE NEW DISCOUNT NOTES
SECTION 301. Title and Terms.
---------------
(a) The aggregate principal amount at maturity of New Discount Notes which
may be authenticated and delivered under this Indenture is limited to
$66,809,639.40 aggregate principal amount at maturity (without taking into
account the payment required by clause (c) of this Section 301 and Section 2 of
the New Discount Notes), except for New Discount Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other New Discount Notes pursuant to Section 304, 305, 306, 307, 310, 906, 1015,
1015A, 1016 or 1108.
(b) The Original Discount Notes are known as the "13 1/2% Series A Senior
Discount Notes due 2008," and the New Discount Notes shall be known and
designated as the "13 1/2% Series B Senior Discount Notes due 2008," in each
case, of the Issuer. The Original Discount Notes were issued at a discount from
the Initial Accreted Value of the Discount Notes. The Aggregate Initial Accreted
Value reflects a discount from the aggregate principal amount of the
Intermediate Holdings Discount Notes at maturity (without taking into account
the payment required by clause (c) of this Section 301 and Section 2 of the New
Discount Notes), and the New Discount Notes accrete in value from the Initial
Accreted Value until June 30, 2003 at a rate per annum of 13 1/2%, compounded
semiannually, to an aggregate principal amount at June 30, 2003 of
$66,809,639.40. Cash interest will not accrue on the New Discount Notes prior to
June 30, 2003. Thereafter, interest will accrue at a rate per annum of 13.5% and
will be payable semiannually in cash and in arrears to the Holders of record on
each June 15 or December 15 immediately preceding the interest payment date on
June 30 and December 31 of each year, commencing December 31, 2003. Cash
interest on the New Discount Notes will accrue from the most recent interest
payment date to which interest has been paid or, if no interest has been paid,
from June 30, 2003. For convenience, all references to the principal amount at
maturity of the New Discount Notes herein are references to the principal amount
at final maturity, without taking into account the payment required by clause
(c) of this Section 301 and Section 2 of the New Discount Notes. All references
herein to outstanding principal amount for the purposes of calculating interest
and principal payments and redemption prices shall take into account any payment
pursuant to clause (c) of this Section 301 and Section 2 of the New Discount
Notes. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months, until the principal thereof is paid or duly provided for.
Interest on any overdue principal, interest (to the extent lawful) or premium,
if any, shall be payable on demand.
(c) For each $1,000 in principal amount of New Discount Notes outstanding
on December 31, 2003, $427.16 will be due and payable in cash on December 31,
2003, representing a payment of a portion of the principal of such New Discount
Notes.
-32-
(d) The principal of (and premium, if any) and interest on the New
Discount Notes shall be payable at the office or agency of the Issuer maintained
for such purpose in The City of New York, or at such other office or agency of
the Issuer as may be maintained for such purpose; provided, however, that, at
the option of the Issuer, interest may be paid by check mailed to addresses of
the Persons entitled thereto as such addresses shall appear on the Note
Register.
(e) Holders shall have the right to require the Issuer to purchase their
New Discount Notes, in whole or in part, in the event of a Change of Control
pursuant to Section 1015 and in the event of a Qualifying Public Offering
pursuant to Section 1015A. The New Discount Notes shall be subject to repurchase
by the Issuer pursuant to an Asset Disposition as provided in Section 1016. The
New Discount Notes shall be redeemable as provided in Article Eleven and in the
New Discount Notes.
SECTION 302. Denominations.
-------------
The New Discount Notes shall be issuable only in fully registered form,
without coupons, and only in denominations of $100,000 and any integral multiple
thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The New Discount Notes shall be executed on behalf of the Issuer by
two Officers, of which at least one Officer shall be the President or the Chief
Financial Officer of the Issuer. The signature of any Officer on the New
Discount Notes may be manual or facsimile signatures of the present or any
future such authorized officer and may be imprinted or otherwise reproduced on
the New Discount Notes.
New Discount Notes bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such New Discount
Notes or did not hold such offices at the date of such New Discount Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver New Discount Notes executed by the Issuer
to the Trustee for authentication, together with an Order for the authentication
and delivery of such New Discount Notes (the "Authentication Order"), and the
Trustee in accordance with such Authentication Order shall authenticate and
deliver such New Discount Notes directing the Trustee to authenticate the New
Notes and certifying that all conditions precedent to the issuance of New
Discount Notes contained herein have been fully complied with; provided that
such New Discount Notes shall be issuable only upon the valid surrender for
cancellation of Original Discount Notes of a like aggregate principal amount at
maturity in accordance with the Note Purchase Agreement. The Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Issuer that it may reasonably request in connection with such authentication of
New Discount Notes. Such order shall specify the amount of Discount Notes to be
authenticated and the date on which the original issue of New Discount Notes is
to be authenticated.
Each New Discount Note shall be dated the date of its authentication.
No New Discount Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
New Discount Note a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of an
authorized signatory, and such certificate upon any New Discount Note shall be
conclusive evidence, and the only evidence, that such New Discount Note has been
duly authenticated and delivered hereunder and is entitled to the benefits of
this Indenture.
In case the Issuer, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Issuer shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental
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hereto with the Trustee pursuant to Article Eight, any of the New Discount Notes
authenticated or delivered prior to such consolidation, merger, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other New Discount Notes executed in the
name of the successor Person with such changes in phraseology and form as may be
appropriate, but otherwise in substance of like tenor as the New Discount Notes
surrendered for such exchange and of like principal amount at maturity; and the
Trustee, upon the Issuer Request of the successor Person, shall authenticate and
deliver New Discount Notes as specified in such request for the purpose of such
exchange. If New Discount Notes shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 303 in exchange
or substitution for or upon registration of transfer of any New Discount Notes,
such successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all New Discount Notes at the time outstanding
for New Discount Notes authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate New Discount Notes on behalf of the Trustee. Unless
limited by the terms of such appointment, an authenticating agent may
authenticate New Discount Notes whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as any Note Registrar
or Paying Agent to deal with the Issuer and its Affiliates hereunder.
SECTION 304. Temporary New Discount Notes.
----------------------------
Pending the preparation of definitive New Discount Notes, the Issuer
may execute, and upon Authentication Order the Trustee shall authenticate and
deliver, temporary New Discount Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination.
Temporary New Discount Notes shall be substantially of the tenor of the
definitive New Discount Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such New Discount Notes may determine, as conclusively
evidenced by their execution of such New Discount Notes.
If temporary New Discount Notes are issued, the Issuer will cause
definitive New Discount Notes to be prepared without unreasonable delay. After
the preparation of definitive New Discount Notes, the temporary New Discount
Notes shall be exchangeable for definitive New Discount Notes upon surrender of
the temporary New Discount Notes at the office or agency of the Issuer
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary New
Discount Notes, the Issuer shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount at maturity of definitive
New Discount Notes of authorized denominations. Until so exchanged, the
temporary New Discount Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive New Discount Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Issuer shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 1002 being herein sometimes
referred to as the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, Holdings shall provide for the registration of
New Discount Notes and of transfers of New Discount Notes. The Note Register
shall be in written form or any other form capable of being converted into
written form within a reasonable time. At all reasonable times, the Note
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as security registrar (the Trustee in such capacity,
together with any successor of the Trustee in such capacity, the "Note
Registrar") for the purpose of registering New Discount Notes and transfers of
New Discount Notes as herein provided.
Upon surrender for registration of transfer of any New Discount Note
at the office or agency of Holdings designated pursuant to Section 1002,
Holdings shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new New Discount
Notes of any authorized denomination or denominations of a like aggregate
principal amount at maturity.
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Furthermore, any Holder of a Global Discount Note shall, by acceptance
of such Global Discount Note, agree that transfers of beneficial interest in
such Global Discount Note may be effected only through a book-entry system
maintained by the Holder of such Global Discount Note (or its agent), and that
ownership of a beneficial interest in the New Discount Note shall be required to
be reflected in a book entry.
At the option of the Holder, New Discount Notes may be exchanged for
other New Discount Notes of any authorized denomination (not less than $100,000)
and of a like aggregate principal amount at maturity, upon surrender of the New
Discount Notes to be exchanged at such office or agency. Whenever any New
Discount Notes are so surrendered for exchange (including an exchange of
Original Discount Notes for New Discount Notes), the Issuer shall execute, and
the Trustee shall authenticate and deliver, the New Discount Notes which the
Holder making the exchange is entitled to receive; provided that no exchange of
New Discount Notes for Original Discount Notes shall occur except pursuant to
Section 12 of the Note Purchase Agreement.
All New Discount Notes issued upon any registration of transfer or
exchange of New Discount Notes shall be the valid obligations of the Issuer,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the New Discount Notes surrendered upon such registration of
transfer or exchange.
Every New Discount Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Issuer or the Note
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer, in form satisfactory to the Issuer and the Note Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of New Discount Notes, but the Issuer may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of New
Discount Notes, other than exchanges pursuant to Section 304, 906, 1015, 1015A,
1016 or 1108, not involving any transfer.
The Register shall be in written form in the English language or in
any other form including computerized records, capable of being converted into
such form within a reasonable time.
SECTION 306. Book-Entry Provisions for Global Discount Notes.
-----------------------------------------------
(a) Each Global Discount Note initially shall (i) be registered in
the name of the Depositary for such global Discount Note or the nominee of such
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Discount Note
held on their behalf by the Depositary, or the Trustee as its custodian, or
under the Global Discount Note, and the Depositary may be treated by the Issuer,
the Trustee and any agent of the Issuer or the Trustee as the absolute owner of
such Global Discount Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of
the Issuer or the Trustee from giving effect to any written certification, proxy
or other authorization furnished by the Depositary or shall impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any New Discount Note.
(b) Transfers of a Global Discount Note shall be limited to transfers
of such Global Discount Note in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in a
Global Discount Note may be transferred in accordance with the rules and
procedures of the Depositary and the provisions of Section 307. If required to
do so pursuant to any applicable law or regulation, beneficial owners may obtain
New Discount Notes in definitive form ("Physical Discount Notes") in exchange
for their beneficial interests in a Global Discount Note upon written request in
accordance with the Depositary's and the Registrar's procedures. In addition,
Physical Discount Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in a Global Discount Note if
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(i) the Depositary notifies the Issuer that it is unwilling or unable to
continue as Depositary for such Global Discount Note or the Depositary ceases to
be a clearing agency registered under the Exchange Act, at a time when the
Depositary is required to be so registered in order to act as Depositary, and in
each case a successor depositary is not appointed by the Issuer within 90 days
of such notice or, (ii) the Issuer executes and delivers to the Trustee and Note
Registrar an Officers' Certificate stating that such Global Discount Note shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Note Registrar has received a request from the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Discount Note pursuant to subsection (b) of this Section to
beneficial owners who are required to hold Physical Discount Notes, the Note
-----------------------
Registrar shall reflect on its books and records the date and a decrease in the
principal amount at maturity of such Global Discount Note in an amount equal to
the principal amount at maturity of the beneficial interest in the Global
Discount Note to be transferred, and the Issuer shall execute, and the Trustee
shall authenticate and deliver, one or more Physical Discount Notes of like
tenor and amount.
(d) In connection with the transfer of an entire Global Discount Note
to beneficial owners pursuant to subsection (b) of this Section, such Global
Discount Note shall be deemed to be surrendered to the Trustee for cancellation,
and the Issuer shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Discount Note, an equal aggregate principal
amount at maturity of Physical Discount Notes of authorized denominations.
(e) Any Physical Discount Note delivered in exchange for an interest
in a Global Discount Note pursuant to subsection (c) or subsection (d) of this
Section shall, except as otherwise provided by paragraph (c) of Section 307,
bear the applicable legend regarding transfer restrictions applicable to the
Physical Discount Note set forth in Section 202.
(f) The registered holder of a Global Discount Note may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the New Discount Notes.
SECTION 307. Special Transfer Provisions.
---------------------------
(a) The following provisions shall apply with respect to any proposed
transfer of a New Discount Note, prior to the expiration of the Resale
Restriction Termination Date (as defined in the legend appearing in Section 202
hereof), which has not been sold in a public offering registered under the
Securities Act or distributed to the public pursuant to Rule 144 under the
Securities Act.
(i) a transfer of such New Discount Note to a QIB (as defined
herein) shall be made upon the representation of the transferee that it is
purchasing the New Discount Note for its own account or an account with
respect to which it exercises sole investment discretion and that it and
any such account is a "qualified institutional buyer" within the meaning of
Rule 144A under the Securities Act and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Issuer as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided
by Rule 144A;
(ii) a transfer of such New Discount Note or a beneficial
interest therein to an institutional accredited investor shall be made upon
receipt by the Trustee or its agent of a certificate substantially in the
form set forth in Section 308 hereof from the proposed transferee and, if
requested by the Issuer or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(iii) a transfer of a such New Discount Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form
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set forth in Section 309 hereof from the proposed transferee and, if
requested by the Issuer or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them.
(b) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of New Discount Notes not bearing the Private Placement Legend, the
Note Registrar shall deliver New Discount Notes that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of New Discount
Notes bearing the Private Placement Legend, the Note Registrar shall deliver
only New Discount Notes that bear the Private Placement Legend unless there is
delivered to the Note Registrar an Opinion of Counsel reasonably satisfactory to
the Issuer and the Trustee to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(c) General. By its acceptance of any New Discount Note bearing the
-------
Private Placement Legend, each Holder of such a New Discount Note acknowledges
the restrictions on transfer of such New Discount Note set forth in this
Indenture and in the Private Placement Legend and agrees that it will transfer
such New Discount Note only as provided in this Indenture and the Private
Placement Legend.
(d) the Issuer shall deliver to the Trustee an Officer's Certificate
setting forth the dates on which the Restricted Period terminates (the "Resale
Restriction Termination Date").
The Note Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. The Issuer shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Note Registrar.
(e) No Obligation of the Trustee: (i) The Trustee shall have no
----------------------------
responsibility or obligation to any beneficial owner of a Global Discount Note,
a member of, or a participant in the Depository or other Person with respect to
any ownership interest in the New Discount Notes, with respect to the accuracy
of the records of the Depository or its nominee or of any participant or member
thereof or with respect to the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect to
such New Discount Notes. All notices and communications to be given to the
Holders and all payments to be made to Holders under the New Discount Notes
shall be given or made only to the registered Holders (which shall be the
Depository or its nominee in the case of a Global Discount Note). The rights of
beneficial owners in any Global Discount Note in global form shall be exercised
only through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected and
indemnified pursuant to Section 607 in relying upon information furnished by the
Depository with respect to any beneficial owners, its members and participants.
(ii) 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 New Discount Note (including without limitation any transfers
between or among Depository participants, members or beneficial owners in any
Global Discount Note) other than to require delivery of such certificates and
other documentation of evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.
SECTION 308. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers to Institutional Accredited Investors.
-----------------------------------------------
[date]
DETAILS INTERMEDIATE HOLDINGS CORP.
c/o [Name of Trustee]
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Ladies and Gentlemen:
This certificate is delivered to request a transfer of $______
principal amount at maturity of the 13 1/2% Series B Senior Discount Notes due
2008 (the "New Discount Notes") of Details Intermediate Holdings Corp. (the
"Issuer").
Upon transfer, the New Discount Notes would be registered in the name
of the new beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
(1) We are an institutional "accredited investor" (as defined in
Rules 501(a)(1), (2), (3) and (7) under the Securities Act of 1933, as amended
(the "Securities Act")), purchasing for our own account or for the account of an
institutional "accredited investor" at least $250,000 principal amount (or
Accreted Value, as applicable) of the New Discount Notes, and we are acquiring
the New Discount Notes not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the New Discount Notes and
invest in or purchase securities similar to the New Discount Notes in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
(2) We understand that the New Discount Notes have not been
registered under the Securities Act and, unless so registered, may not be sold
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing New Discount Notes to
offer, sell or otherwise transfer such New Discount Notes prior to the date
which is two years after the later of the date of original issue and the last
date on which the Issuer or any affiliate of the Issuer was the owner of such
New Discount Notes (or any predecessor thereto) (the "Resale Restriction
Termination Date") only (a) to the Issuer, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c) in a
transaction complying with the requirements of Rule 144A under the Securities
Act, to a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account of a
QIB and to whom notice is given that the transfer is being made in reliance on
Rule 144A, (d) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act that is purchasing for its own account or
for the account of such an institutional "accredited investor", in each case in
a minimum principal amount of New Discount Notes (or Accreted Value, applicable)
of $250,000 or (f) pursuant to any other available exemption from the
registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the New
Discount Notes is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Issuer and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act and that it is acquiring such New Discount
Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Issuer and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Termination Date of the New Discount Notes pursuant to clauses (d), (e) or (f)
above to require the delivery of an opinion of counsel, certifications and/or
other information satisfactory to the Issuer and the Trustee.
TRANSFEREE:
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BY:
Upon transfer the New Discount Notes would be registered in the name of the new
beneficial owner as follows:
Taxpayer ID
Name Address Number
---- ------- ------
Very truly yours,
[Name of Transferor]
By:______________________________ _________________________________
Name: Signature Medallion Guaranteed
Title:
SECTION 309. Form of Certificate to Be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S.
----------------------------------
[date]
[Name of Trustee]
Attention: Corporate Trust Administration
Re: Details Intermediate Holdings Corp. (the "Issuer")
13 1/2% Series B Senior Discount Notes due 2008 (the "New
---------------------------------------------------------
Discount Notes")
----------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount at maturity of the New Discount Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the New Discount Notes was not made to a person in
the United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
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(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and the Issuer are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
SECTION 310. Mutilated, Destroyed, Lost and Stolen New Discount Notes.
--------------------------------------------------------
If (i) any mutilated New Discount Note is surrendered to the Trustee,
or (ii) the Issuer and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any New Discount Note, and there is delivered to
the Issuer and the Trustee such security or indemnity, in each case, as may be
required by them to save each of them harmless, then, in the absence of notice
to the Issuer or the Trustee that such New Discount Note has been acquired by a
bona fide purchaser, the Issuer shall execute and upon Authentication Order the
Trustee shall authenticate and deliver, in exchange for any such mutilated New
Discount Note or in lieu of any such destroyed, lost or stolen New Discount
Note, a new New Discount Note of like tenor and principal amount at maturity,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen New Discount
Note has become or is about to become due and payable, the Issuer in its
discretion may, instead of issuing a new New Discount Note, pay such New
Discount Note.
Upon the issuance of any New Discount Note under this Section, the
Issuer may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new New Discount Note issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen New Discount Note shall constitute an
original additional contractual obligation of the Issuer and any other obligor
upon the New Discount Notes, whether or not the mutilated, destroyed, lost or
stolen New Discount Note shall be at any time enforceable by anyone, and shall
be entitled to all benefits of this Indenture equally and proportionately with
any and all other New Discount Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen New Discount Notes.
SECTION 311. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any New Discount Note 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 such New Discount Note (or one or more predecessor Discount
Notes) is registered at the close of business on the Regular Record Date for
such interest at the office or agency of the Issuer maintained for such purpose
pursuant to Section 1002; provided, however, that each installment of interest
may at the Issuer's option be paid by (i) mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
Section 312, to the address of such Person as it appears in the Note Register or
(ii) wire transfer to an account located in the United States maintained by the
payee.
Any interest on any New Discount Note which is payable, but is not
paid when the same becomes due and payable and such nonpayment continues for a
period of 30 days shall forthwith cease to be payable to the Holder on the
Regular Record Date by virtue of having been such Holder, and such defaulted
interest and (to the extent lawful) interest on such defaulted interest at the
rate borne by the New
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Discount Notes (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Issuer, at its election in
each case, as provided in clause (a) or (b) below:
(a) the Issuer may elect to make payment of any Defaulted Interest to
the Persons in whose names the New Discount Notes (or their respective
predecessor Discount Notes) 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 Issuer shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each New
Discount Note and the date (not less than 30 days after such notice) of the
proposed payment (the "Special Interest Payment Date"), and at the same
time the Issuer shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Issuer of such Special
Record Date, and in the name and at the expense of the Issuer, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in Section 106, 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 and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons in whose names the New
Discount Notes (or their respective predecessor Discount Notes) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (b).
(b) the Issuer may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the New Discount Notes may be listed, and upon
such notice as may be required by such exchange, if, after notice given by
the Issuer to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each New Discount
Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Discount Note (including without limitation
an Original Discount Note) shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Discount Note.
SECTION 312. Persons Deemed Owners.
---------------------
Prior to the due presentment of a New Discount Note for registration
of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee
may treat the Person in whose name such New Discount Note is registered as the
owner of such New Discount Note for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Sections 305 and 311)
interest on such New Discount Note and for all other purposes whatsoever,
whether or not such New Discount Note be overdue, and none of the Issuer, the
Trustee nor any agent of the Issuer or the Trustee shall be affected by notice
to the contrary.
SECTION 313. Cancellation.
------------
All New Discount Notes surrendered for payment, redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. If the Issuer shall acquire any of the New Discount Notes other than as set
forth in the preceding sentence, the acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such New Discount
Notes unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 313. No New Discount Notes shall be authenticated in
lieu of or in exchange for any New Discount Notes canceled as provided in this
Section, except as expressly permitted
-41-
by this Indenture. All canceled New Discount Notes held by the Trustee shall be
destroyed by the Trustee and the Trustee shall send a certificate of such
destruction to the Issuer.
SECTION 314. Computation of Interest.
-----------------------
Interest on the New Discount Notes shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 315. CUSIP Numbers.
-------------
The Issuer in issuing New Discount Notes may use "CUSIP" numbers (if
then generally in use) in addition to serial numbers; if so, the Trustee shall
use such "CUSIP" numbers in addition to serial numbers in notices of redemption
and repurchase as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such CUSIP
numbers, either as printed on the New Discount Notes or as contained in any
notice of a redemption or repurchase and that reliance may be placed only on the
serial or other identification numbers printed on the New Discount Notes, and
any such redemption or repurchase shall not be affected by any defect in or
omission of such CUSIP numbers. The Issuer will promptly notify the Trustee of
any change in the CUSIP numbers.
400. ARTICLE FOUR. SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon the Issuer's Request cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
New Discount Notes expressly provided for herein or pursuant hereto) and the
Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(i) either
(A) all New Discount Notes theretofore authenticated and
delivered (other than (1) New Discount Notes which have been lost,
stolen or destroyed and which have been replaced or paid as provided
in Section 310 and (2) New Discount Notes for whose payment money has
theretofore been deposited in trust with the Trustee or any Paying
Agent or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all New Discount Notes not theretofore delivered to the
Trustee for cancellation
(1) have become due and payable by reason of the making
of a notice of redemption or otherwise; or
(2) will become due and payable at their Stated Maturity
within one year; or
(3) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Issuer,
and the Issuer in the case of (1), (2) or (3) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount in cash or Government Obligations
sufficient to pay and discharge the entire indebtedness on such New
Discount Notes not theretofore delivered to the Trustee for
cancellation, for principal of (and
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premium, if any) and interest to the date of such deposit (in the case
of New Discount Notes which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(ii) no Default or Event of Default with respect to this Indenture
or the New Discount Notes shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default under,
any other instrument or agreement to which the Issuer is a party or by
which it is bound;
(iii) the Issuer has paid or caused to be paid all sums payable
hereunder by the Issuer in connection with all the New Discount Notes
including all fees and expenses of the Trustee;
(iv) the Issuer has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of such New
Discount Notes at maturity or the Redemption Date, as the case may be; and
(v) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture and the termination of the Issuer's obligation hereunder
have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (i) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive any such satisfaction and discharge.
SECTION 402. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the New Discount Notes
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 401 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Issuer's obligations under this Indenture and the New Discount Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
401; provided that if the Issuer has made any payment of principal of, premium,
if any, or interest on any New Discount Notes because of the reinstatement of
its obligations, the Issuer shall be subrogated to the rights of the Holders of
such New Discount Notes to receive such payment from the money or Government
Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE. REMEDIES
500.
SECTION 501. 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 voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
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(i) a default in any payment of interest on any New Discount Note
when due, continued for 30 days;
(ii) a default in the payment of principal of any New Discount Note
when due at its Stated Maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise; provided that this clause (ii)
shall not be deemed to include as an Event of Default any failure by the
Issuer to pay any amounts that are due and payable solely pursuant to
Section 301(c) of this Indenture and Section 2 of the New Discount Notes;
(iii) the failure by the Issuer to comply for 30 days after the notice
specified below with any of its obligations under Article Eight and
Sections 1009 through 1018 ( other than a failure to purchase New Discount
Notes when required under Sections 1015, 1015A and 1016 which shall
constitute an Event of Default under clause (ii) above);
(iv) the failure by the Issuer to comply for 60 days after the notice
specified below with any of its other agreements contained in this
Indenture or the New Discount Note (other than those referred to in (i),
(ii) or (iii) above); provided that this clause (iv) shall not be deemed to
include as an Event of Default any failure by the Issuer to pay any amounts
that are due and payable solely pursuant to Section 301(c) of this
Indenture and Section 2 of the New Discount Notes;
(v) Indebtedness of the Issuer or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the Holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $10 million;
(vi) the Issuer or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property;
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency; or
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Issuer or any Significant Subsidiary
in an involuntary case;
(B) appoints a Custodian of the Issuer or any Significant Subsidiary
for all or substantially all of its property; or
(C) orders the winding up or liquidation of the Issuer or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 90 consecutive days;
(viii) any judgment or decree for the payment of money in excess of
$10 million is rendered against the Issuer or any Significant Subsidiary
and such judgment or decree remains undischarged or unstayed for a period
of 60 days after such judgment becomes final and non-appealable; or
-44-
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body; provided, however, a default under clauses (iii) and (iv) will not
constitute an Event of Default until the Trustee or the holders of 25% in
principal amount of the outstanding New Discount Notes notify the Issuer of the
default and the Issuer does not cure such default within the time specified in
clauses (iii) and (iv) after receipt of such notice. Such notice must specify
the Default, demand that it is to be remedied and state that such notice is a
"Notice of Default."
The Issuer also is required to deliver to the Trustee, within 30 days
after the occurrence thereof, written notice of any events that would become an
Event of Default under clause (iii), (iv) or (vii) above, their status and what
action the Issuer is taking or proposes to take in respect thereof.
If a Default occurs and is continuing and is known to the Trustee, the
Trustee must mail to each holder notice of the Default within 90 days after it
occurs. Except in the case of a Default in the payment of principal of (or if
prior to June 30, 2003, the Accreted Value of), premium, if any, or interest on
any New Discount Note, the Trustee may withhold notice if and so long as a
committee of its Trust officers in good faith determines that withholding notice
is in the interests of the Holders of the New Discount Notes.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than by reason of an Event of Default
specified in Section 501(vi) or 501(vii)) occurs and is continuing, the Trustee
by notice to the Issuer or the Holders of at least 25% in principal amount of
the applicable New Discount Notes outstanding may declare the principal (or if
prior to June 30, 2003, the Accreted Value of) (and premium, if any), accrued
and unpaid interest and any other monetary obligations on all such then
outstanding New Discount Notes to be due and payable immediately, by a notice in
writing to the Issuer (and to the Trustee if given by Holders). Upon the
effectiveness of such declaration, such principal (or Accreted Value) (and
premium, if any) and interest will be due and payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default specified in
Section 501(vi) or 501(vii) occurs and is continuing, then the outstanding
principal amount of all the New Discount Notes shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
The Holders of a majority in principal amount of the outstanding New
Discount Notes by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. The Trustee may rely upon such notice of rescission without any
independent investigation as to the satisfaction of the conditions in the
preceding sentence. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
The failure of the Issuer to pay any amounts that are due and payable
solely pursuant to Section 301(c) of this Indenture and Section 2 of the New
Discount Notes shall give the Holders of New Discount Notes a right to xxx for
failure to pay such amounts when due and payable, but shall not give such
Holders or the Trustee the right to declare the principal of and accrued and
unpaid interest on the New Discount Notes, if any, to be due and payable.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
If an Event of Default specified in Section 501(i) or 501(ii) occurs
and is continuing, the Trustee, in its own name as trustee of an express trust,
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 Issuer or any other obligor upon the New Discount
Notes and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Issuer or any other obligor upon the
New Discount Notes, wherever situated.
-45-
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 under this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual 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, subject however to Section 513. No recovery of any
such judgment upon any property of the Issuer shall affect or impair any rights,
powers or remedies of the Trustee or the Holders.
SECTION 504. 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 Issuer or any other obligor, upon the New
Discount Notes or the property of the Issuer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the New
Discount Notes 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 Issuer for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the New
Discount Notes, to take such other actions (including participating as a
member, voting or otherwise, of any official committee of creditors
appointed in such matter) and to file such other papers or documents and
take such other actions as the Trustee (including, participation as a
member of any creditors committee) may deem necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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 New
Discount Notes or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of such Holders, vote for the election
of a trustee in bankruptcy or other similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of New
----------------------------------------------------
Discount Notes.
--------------
All rights of action and claims under this Indenture or the New
Discount Notes may be prosecuted and enforced by the Trustee without the
possession of any of the New Discount Notes or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the New Discount Notes
in respect of which such judgment has been recovered.
-46-
SECTION 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article 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 (or premium,
if any) or interest, upon presentation of the New Discount Notes and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the New Discount Notes
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 New Discount Notes for principal
(and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Issuer or any other obligor on the New Discount
Notes, as their interests may appear or as a court of competent
jurisdiction may direct, provided that all sums due and owing to the
Holders and the Trustee have been paid in full as required by this
Indenture.
SECTION 507. Limitation on Suits.
-------------------
Except to enforce the right to receive payment of principal (or if
prior to June 30, 2003, the Accreted Value of), premium, if any, or
interest when due, no holder may pursue any remedy with respect to the
Indenture or the New Discount Notes unless:
(i) such holder has previously given the Trustee notice that an
Event of Default is continuing;
(ii) holders of at least 25% in principal amount of the
outstanding New Discount Notes have requested the Trustee to pursue the
remedy;
(iii) such holders have offered the Trustee reasonable security
or indemnity against any loss, liability or expense;
(iv) the Trustee has not complied with such request within 60
days after the receipt of the request and the offer of security or
indemnity; and
(v) the holders of a majority in principal amount of the
outstanding New Discount Notes have not given the Trustee a direction that,
in the opinion of the Trustee, is inconsistent with such request within
such 60-day period.
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any New Discount Note to affect, 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
or any New Discount Note, except in the manner herein provided and for the equal
and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture the Holder of
any New Discount Note shall have the right, which is absolute and unconditional,
to receive payment, as provided herein (including, if applicable, Article
Eleven) and in such New Discount Note of the principal of (and premium, if any)
and (subject to Section 311) interest on such New Discount Note on the
respective Stated Maturities expressed in such New Discount Note (or, in the
case of redemption or repurchase, on the Redemption Date or
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repurchase) and to institute suit for the enforcement of any such payment, and
such rights shall not be impaired without the consent of such Holder.
SECTION 509. 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 such case, subject to any
determination in such proceeding, the Issuer, any other obligor on the New
Discount Notes, 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.
SECTION 510. Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen New Discount Notes in the last
paragraph of Section 310, 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 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article 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.
SECTION 512. Control by Holders.
------------------
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding New Discount Notes are given the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee, provided that
(i) such direction shall not be in conflict with any rule of
law or the Indenture;
(ii) the Trustee need not take any action which might be unduly
prejudicial to the rights of any other Holder or would involve the Trustee
in personal liability; and
(iii) subject to the provisions of Section 315 of the Trust
Indenture Act, the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Prior to taking any action under the Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 513. Waiver of Past Defaults.
-----------------------
Subject to Sections 508 and 902, the Holders of a majority in
aggregate principal amount of the outstanding New Discount Notes (including
consents obtained in connection with a tender offer or exchange offer for the
New Discount Notes) may on behalf of the Holders of all the New Discount Notes,
by written notice to the Trustee, waive any existing Default or Event of Default
and its consequences under this
-48-
Indenture except a continuing Default or Event of Default in the payment of
interest on, premium, if any, or the principal of (or if prior to June 30, 2003,
the Accreted Value), any such New Discount Note held by a non-consenting Holder,
or in respect of a covenant or a provision which cannot be amended or modified
without the consent of all Holders.
In the event that any Event of Default specified in Section 501(v)
shall have occurred and be continuing, such Event of Default and all
consequences thereof (including without limitation any acceleration or resulting
payment default) shall be annulled, waived and rescinded, automatically and
without any action by the Trustee or the Holders of the New Discount Notes, if
within 30 days after such Event of Default arose (i) the Indebtedness that is
the basis for such Event of Default has been discharged, or (ii) the holders
thereof have rescinded or waived the acceleration, notice or action (as the case
may be) giving rise to such Event of Default, or (iii) if the Default that is
the basis for such Event of Default has been cured.
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 Event of Default or impair any right consequent thereon.
SECTION 514. [Intentionally Omitted].
SECTION 515. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any New
Discount Note by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, 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 by it as Trustee, 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 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 principal amount of the
outstanding New Discount Notes, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or Accreted Value of) (or
premium, if any) or interest on any New Discount Note on or after the respective
Stated Maturities expressed in such New Discount Note (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX. THE TRUSTEE
600.
SECTION 601. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of a Default or an Event of
Default.
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and the Trustee
should not be liable except for the performance of such duties as
specifically set forth in the Indenture and no others; and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith or willful misconduct on its
part, the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but not to verify
the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Trust Officer of the Trustee has actual knowledge or of
which written notice of such Default or Event of Default shall have been given
to the Trustee of the Issuer, any other obligor of the New Discount Notes or by
any
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Holder, 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 man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in aggregate principal amount of the
outstanding New Discount Notes relating to 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, under this
Indenture.
(iv) the Trustee shall not be required to examine any of the
reports, information or documents filed with it pursuant to Section 1017 to
determine whether there has been any breach of the covenants of the Issuer
set forth in Sections 1004 through 1016.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section and to the TIA.
SECTION 602. Notice of Defaults.
------------------
Within 90 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such Default hereunder actually known to a Trust Officer of
the Trustee, unless such Default shall have been cured or waived; provided,
however, that, except in the case of a Default in the payment of the principal
of (or premium, if any) or interest on any New Discount Note, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Trust Officers of the Trustee in good faith determine that the withholding of
such notice is in the interest of the Holders. Notwithstanding anything to the
contrary expressed in this Indenture, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default hereunder unless and until the
Trustee shall have received written notice thereof from the Issuer at its
principal Corporate Trust Office as specified in Section 105, except in the case
of an Event of Default under Sections 501(i) or 501(ii) (provided that the
Trustee is the Paying Agent).
SECTION 603. Certain Rights of Trustee.
-------------------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Subject to the provisions of TIA Sections 315(a) through
315(d):
(i) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon (whether in its original or facsimile
form) any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties
and the Trustee need not investigate any fact or matter stated in the
documents;
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(ii) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by a the Issuer Request or Authentication
Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(iii) 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 or willful misconduct on its part, request and rely
upon an Officers' Certificate or an Opinion of Counsel and shall not liable
for any action it takes or omits to take in good faith reliance on such
Officer's Certificate or Opinion of Counsel;
(iv) the Trustee may consult with counsel of its selection and
any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
satisfactory to the Trustee against the costs, expenses, losses and
liabilities which might be incurred by it in compliance with such request
or direction;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness 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 Issuer,
personally or by agent or attorney;
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(viii) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(c) The Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
---------------------------------------------------
New Discount Notes.
------------------
The recitals contained herein and in the New Discount Notes, except
for the Trustee's certificates of authentication, shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for their
correctness and it shall not be responsible for the Issuer's use of the proceeds
from the New Discount Notes. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the New Discount Notes, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the New Discount Notes and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility on
Form T-1 supplied to the Issuer are true and accurate, subject to the
qualifications set forth therein. The Trustee shall not be accountable for the
use or application by the Issuer of the proceeds of the New Discount Notes.
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SECTION 605. May Hold New Discount Notes.
---------------------------
The Trustee, any Paying Agent, any Note Registrar, any Authenticating
Agent or any other agent of the Issuer or of the Trustee, in its individual or
any other capacity, may become the owner or pledgee of New Discount Notes and,
subject to TIA Sections 310(b) and 311, may otherwise deal with the Issuer with
the same rights it would have if it were not Trustee, Paying Agent, Note
Registrar, Authenticating Agent or such other agent.
SECTION 606. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Issuer.
SECTION 607. Compensation and Reimbursement.
------------------------------
The Issuer agrees:
(i) to pay to the Trustee from time to time such compensation as
shall be agreed to in writing between the Issuer and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(ii) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents, consultants and counsel and costs and
expenses of collection), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(iii) to indemnify each of the Trustee or any predecessor Trustee
(and their respective directors, officers, stockholders, employees and
agents) for, and to hold them harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based on the
income of the Trustee) incurred without negligence, willful misconduct or
bad faith on their part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of the Trustee's powers
or duties hereunder.
The obligations of the Issuer under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Issuer, the Trustee shall have a lien prior to the Holders of the New
Discount Notes upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular New Discount Notes.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(vi) or (vii), the expenses
(including the reasonable charges and expenses of its counsel) of and the
compensation for such services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
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SECTION 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall be at all times a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1), and which may have an
office in The City of New York and shall have a combined capital and surplus of
at least $50,000,000. If the Trustee does not have an office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to the Issuer to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section 608,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 608, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of this Section.
(b) Trustee may resign at any time by giving written notice
thereof to the Issuer. Upon receiving such notice of resignation, the Issuer
shall promptly appoint a successor trustee by written instrument executed by
authority of the Board of Directors, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance required by this Section shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition, at the expense of the Issuer, any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders
of not less than a majority in principal amount of the outstanding New Discount
Notes, delivered to the Trustee and to the Issuer. The Trustee so removed may,
at the expense of the Issuer, petition any court of competent jurisdiction for
the appointment of a successor Trustee if no successor Trustee is appointed
within 30 days of such removal.
(d) If at any time:
(i) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Issuer or by any
Holder who has been a bona fide Holder of a New Discount Note for at least
six months, or
(ii) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Issuer or by any
Holder who has been a bona fide Holder of a New Discount Note for at least
six months, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a Custodian of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (A) the Issuer, by a Board Resolution, may remove the
Trustee, or (B) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a New Discount Note for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Issuer, by a Board Resolution, shall promptly appoint a successor Trustee.
If, within one year after such resignation, removal or incapability, or the
occurrence of
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such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the outstanding New Discount Notes delivered to
the Issuer and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Issuer. If no successor
Trustee shall have been so appointed by the Issuer or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a New Discount Note for at least six months may, at the expense
of the Issuer on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to the Holders of New
Discount Notes in the manner provided for in Section 106. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 610. Acceptance of Appointment by Successor.
-------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Issuer or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Notwithstanding the replacement of the Trustee
pursuant to this Section 610, the Issuer's obligations under Section 607 shall
continue for the benefit of the retiring Trustee with regard to expenses and
liabilities incurred by it and compensation earned by it prior to such
replacement or otherwise under the Indenture. Upon request of any such
successor Trustee, the Issuer shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
--------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any New Discount Notes shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the New Discount Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such New Discount Notes. In case at that time any of the New
Discount Notes shall not have been authenticated, any successor Trustee may
authenticate such New Discount Notes either in the name of any predecessor
hereunder or in the name of the successor Trustee. In all such cases such
certificates shall have the full force and effect which this Indenture provides
for the certificate of authentication of the Trustee shall have; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate New Discount Notes in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
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SECTION 612. Trustee's Application for Instructions from the Issuer.
------------------------------------------------------
Any application by the Trustee for written instructions from the
Issuer may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. Subject to Section 610, the Trustee shall not be liable for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three Business Days after the date any
officer of the Issuer actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted.
ARTICLE SEVEN. HOLDERS LISTS AND REPORTS BY TRUSTEE AND THE ISSUER
700.
SECTION 701. the Issuer to Furnish Trustee Names and Addresses.
-------------------------------------------------
The Issuer will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Issuer of any such request, a list
of similar form and content to that in Subsection (a) hereof as of a date not
more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished.
SECTION 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Every Holder of New Discount Notes, by receiving and holding the same,
agrees with the Issuer and the Trustee that none of the Issuer or the Trustee or
any agent of either of them shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the Holders
in accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 703. Reports by Trustee.
------------------
Within 60 days after June 30 of each year commencing with the first
June 30 after the first issuance of New Discount Notes, the Trustee shall
transmit to the Holders, in the manner and to the extent provided in TIA Section
313(c), a brief report dated as of such June 30 if required by TIA Section
313(a). Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to conclusively rely exclusively on Officer's Certificates).
The Trustee also shall comply with TIA (S) 313(b). A copy of each
report at the time of its mailing to Holders shall be filed by the Trustee with
the SEC and each stock exchange (if any) on which the New Discount Notes are
listed. The Issuer agrees to notify promptly the Trustee whenever the New
Discount Notes become listed on any stock exchange and of any delisting thereof.
ARTICLE EIGHT. MERGER, CONSOLIDATION, OR SALE OF ASSETS
800.
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SECTION 801. the Issuer May Consolidate, Etc., Only on Certain Terms.
-------------------------------------------------------
The Issuer will not in a single transaction or series of related
transactions consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation, partnership, trust or limited liability
company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor
Company (if not the Issuer) shall expressly assume, by supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to
the Trustee, all the obligations of the Issuer under the New Discount Notes
and hereunder;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the Issuer
or the Successor Company if the Issuer is not the continuing obligor under
this Indenture would at the time of such transaction or series of
transactions, after giving pro forma effect to such transaction have a
Consolidated Net Worth not less than that of the Issuer immediately prior
to the transaction; and
(iv) the Issuer shall have delivered to the Trustee (A) an Officers'
Certificate, stating that (1) such Officers are not aware of any Default or
Event of Default that shall have happened and be continuing and (2) such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture; provided that no Officers' Certificate will be
required as to matters described in clause (A)(1) of this clause (iv) for a
consolidation, merger or transfer described in the last paragraph of this
Section 801, and (B) an Opinion of Counsel, stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture, both in the form required by this Indenture; provided
that (1) in giving such opinion such counsel may rely on such officer's
certificate as to any matters of fact (including without limitation as to
compliance with the foregoing clauses (ii) and (iii)), and (2) no Opinion
of Counsel will be required for a consolidation, merger or transfer
described in the last paragraph of this Section 801.
Notwithstanding the foregoing clauses (ii) and (iii), (w) the Issuer
may contribute all of the capital stock of Dynamic Circuits, Inc. held by it to
a Wholly Owned Restricted Subsidiary, (x) the Issuer may consolidate with or
merge with or into, or convey or transfer all or substantially all its assets,
subject to all liabilities, including the New Discount Notes, to a Wholly-Owned
Restricted Subsidiary of the Issuer in which case, such Wholly-Owned Restricted
Subsidiary will succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under the Indenture and thereafter the Issuer shall be
released from all obligations and covenants thereunder, (y) any Restricted
Subsidiary of the Issuer may consolidate with, merge into or transfer all or
part of its properties and assets to the Issuer and (z) the Issuer may merge
with an Affiliate incorporated solely for the purpose of reincorporating the
Issuer in another jurisdiction to realize tax or other benefits.
SECTION 802. Successor Substituted.
---------------------
Upon any consolidation of the Issuer with or merger of the Issuer with
or into any other corporation or any conveyance, transfer, lease or other
disposition of all or substantially all of the assets of the Issuer to any
Person in accordance with Section 801, the Successor Company will succeed to,
and be substituted for, and may exercise every right and power of, the Issuer
hereunder and thereafter the predecessor shall be released from all obligations
and covenants hereunder, but, in the case of conveyance, transfer or lease of
all or substantially all its assets (other than pursuant to the last paragraph
under Section 801), the predecessor will not be released from the obligation to
pay the principal of and interest on the New Discount Notes.
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ARTICLE NINE. SUPPLEMENTS AND AMENDMENTS TO INDENTURE
900.
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Issuer 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:
(i) to cure any ambiguity, omission, defect or inconsistency;
or
(ii) to provide for uncertificated New Discount Notes in
addition to or in place of certificated New Discount Notes (provided that
the uncertificated New Discount Notes are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated New Discount Notes are described in Section 163(f)(2)(B) of
the Code); or
(iii) to add Guarantees with respect to the New Discount Notes;
or
(iv) to provide for the assumption by a successor corporation,
partnership, trust or limited liability company of the obligations of the
Issuer hereunder; or
(v) to secure the New Discount Notes; or
(vi) to add to the covenants of the Issuer for the benefit of
the Holders or to surrender any right or power conferred upon the Issuer;
or
(vii) to make any other change that does not adversely affect
the rights of any Holder; or
(viii) to comply with any requirement of the SEC in connection
with the qualification of this Indenture under the Trust Indenture
Act.
SECTION 902. Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of at least a majority in principal
amount of the outstanding New Discount Notes (including consents obtained in
connection with a tender offer or exchange offer for the New Discount Notes),
the Issuer, and the Trustee may 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 of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each outstanding New Discount Note affected thereby
(with respect to any New Discount Notes held by a nonconsenting Holder of the
New Discount Notes):
(i) reduce the amount of New Discount Notes whose Holders must
consent to an amendment; or
(ii) reduce the stated rate of or extend the stated time for
payment of interest on any New Discount Note; or
(iii) reduce the principal of or extend the Stated Maturity of
any New Discount Note; or
(iv) reduce the premium payable upon the redemption or
repurchase of any Discount Note or change the time at which any Note may be
redeemed as described in Section 1101; or
(v) make any New Discount Note payable in money other than that
stated in the Discount Note; or
-57-
(vi) impair the right of any Holder to receive payment of principal
of and interest on such Holder's New Discount Notes on or after the due
dates therefor or to institute suit for the enforcement of any payment on
or with respect to such Holder's New Discount Notes; or
(vii) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions.
The consent of the Holders is not necessary under this Indenture to
approve the particular form of any proposed amendment or supplemental indenture.
It is sufficient if such consent approves the substance of the proposed
amendment or supplemental indenture.
SECTION 903. Execution of Supplemental Indentures.
------------------------------------
The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities, as determined by the Trustee in its sole discretion under this
Indenture or otherwise. In signing or refusing to sign any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture.
SECTION 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of New Discount Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby (except as provided in Section 902).
SECTION 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to the Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in New Discount Notes to Supplemental
-----------------------------------------------
Indentures.
----------
New Discount Notes authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Trustee shall
so determine, new New Discount Notes so modified as to conform to any such
supplemental indenture may be prepared and executed by the Issuer, and the
Issuer shall issue and the Trustee shall authenticate a new New Discount Note
that reflects the changed terms, the cost and expense of which will be borne by
the Issuer in exchange for outstanding New Discount Notes.
SECTION 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Issuer
shall give notice thereof to the Holders of each outstanding New Discount Note
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture. The failure to give such
notice to all the Holders, or any defect therein, will not impair or affect the
validity of the supplemental indenture.
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ARTICLE TEN. COVENANTS
1000.
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
---------------------------------------------------
The Issuer covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium, if any) and interest
on the New Discount Notes in accordance with the terms of the New Discount Notes
and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
-------------------------------
The Issuer will maintain in The City of New York, an office or agency
where the New Discount Notes may be presented or surrendered for payment, where,
if applicable, the New Discount Notes may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Issuer in
respect of the New Discount Notes and this Indenture may be served. The
corporate trust office of the Trustee [address], New York, New York, [zip code]
shall be such office or agency of the Issuer, unless the Issuer shall designate
and maintain some other office or agency for one or more of such purposes. The
Issuer will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Issuer shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Issuer hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the New
Discount Notes may be presented or surrendered for any or all such purposes and
may from time to time rescind any such designation; provided, however, that no
such designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Issuer will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
-------------------------------------------
If the Issuer shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the New Discount Notes, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay the principal of (or
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure to so act.
Whenever the Issuer shall have one or more Paying Agents for the New
Discount Notes, it will, on or before each due date of the principal of (or
premium, if any) or interest on any New Discount Notes, deposit with a Paying
Agent a sum in same day funds (or New York Clearing House funds if such deposit
is made prior to the date on which such deposit is required to be made) that
shall be available to the Trustee by 10:00 a.m. Eastern Standard Time on such
due date sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Issuer will promptly notify the Trustee of such action or
any failure to so act.
The Issuer will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(i) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest on New Discount Notes in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(ii) give the Trustee notice of any default by the Issuer (or any
other obligor upon the New Discount Notes) in the making of any payment of
principal (and premium, if any) or interest; and
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(iii) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Authentication Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Issuer or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of (or premium, if any)
or interest on any New Discount Note and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall be paid to
the Issuer on the Issuer Request, or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such New Discount Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer as trustee thereof,
shall thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment to the Issuer, may at the
expense of the Issuer cause to be published once, in a leading daily newspaper
(if practicable, The Wall Street Journal (Eastern Edition)) printed in the
English language and of general circulation in New York City, 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 publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer.
SECTION 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Issuer will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and that of each Restricted Subsidiary and the corporate rights
(charter and statutory) licenses and franchises of the Issuer and each
Restricted Subsidiary; provided, however, that the Issuer shall not be required
to preserve any such existence (except the Issuer) right, license or franchise
if the Board of Directors of the Issuer shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Issuer and
each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not, and will not be, disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
---------------------------------
The Issuer will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Issuer or any Subsidiary or upon
the income, profits or property of the Issuer or any Subsidiary and (ii) all
lawful claims for labor, materials and supplies, which, if unpaid, might by law
become a material liability or lien upon the property of the Issuer or any
Restricted Subsidiary; provided, however, that the Issuer shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Issuer) are being
maintained in accordance with GAAP.
SECTION 1006. [Intentionally Omitted].
-----------------------
SECTION 1007. [Intentionally Omitted].
-----------------------
SECTION 1008. Compliance with Statutes.
------------------------
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The Issuer shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental regulatory authority, in respect of the conduct
of their respective businesses and the ownership of their respective properties,
except for such noncompliances as would not in the aggregate have a material
adverse effect on the financial condition or results of operations of the Issuer
and its Restricted Subsidiaries, taken as a whole.
SECTION 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries, directly or indirectly, to (i) declare or pay any dividend or make
any distribution on or in respect of its Capital Stock except (A) dividends or
distributions payable in its Capital Stock (other than Disqualified Stock) and
(B) dividends or distributions payable to the Issuer or a Restricted Subsidiary
of the Issuer (and if such Restricted Subsidiary is not a Wholly-Owned
Subsidiary, to its other holders of Capital Stock on a pro rata basis), (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of the
Issuer held by Persons other than a Restricted Subsidiary of the Issuer or any
Capital Stock of a Restricted Subsidiary of the Issuer held by any Affiliate of
the Issuer, other than another Restricted Subsidiary (in either case, other than
in exchange for its Capital Stock (other than Disqualified Stock)), (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for value,
prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Subordinated Obligations (other than the purchase, repurchase or
other acquisition of Subordinated Obligations purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of purchase, repurchase or
acquisition) or (iv) make any Investment (other than a Permitted Investment) in
any Person (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement or Investment being herein referred to
in clauses (i) through (iv) as a "Restricted Payment"), if at the time the
Issuer or such Restricted Subsidiary makes such Restricted Payment: (1) a
Default shall have occurred and be continuing (or would result therefrom); or
(2) the Company is not able to incur an additional $1.00 of Indebtedness
pursuant to Section 1011; or (3) the aggregate amount of such Restricted Payment
and all other Restricted Payments declared or made subsequent to the Issue Date
would exceed the sum of: (A) 50% of the Consolidated Net Income (x) of the
Issuer in the case of any Restricted Payment made by the Issuer or (y) of the
Company and its Restricted Subsidiaries in the case of any Restricted Payment
made by the Company or any of its Restricted Subsidiaries accrued during the
period (treated as one accounting period) from, but excluding, the Issue Date
to, but excluding, the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit); (B) the
aggregate net proceeds, including the fair market value of property other than
cash (determined in good faith by the Board of Directors as evidenced by a
certificate filed with the Trustee, except that in the event the value of any
non-cash consideration shall be $10 million or more, the value shall be as
determined in writing by an Independent Appraiser) received by the Issuer from
the issue or sale of its Capital Stock (other than Disqualified Stock) or other
capital contributions subsequent to the Issue Date (other than net proceeds
received from an issuance or sale of such Capital Stock to a Subsidiary of the
Issuer or an employee stock ownership plan or similar trust to the extent such
sale to an employee stock ownership plan or similar trust is financed by loans
from the Issuer or any Restricted Subsidiary unless such loans have been repaid
with cash on or prior to the date of determination); (C) the amount by which
Indebtedness of the Issuer is reduced on the Issuer's balance sheet upon the
conversion or exchange (other than by a Subsidiary of the Issuer) subsequent to
the Issue Date of any Indebtedness of the Issuer convertible or exchangeable for
Capital Stock of the Issuer (less the amount of any cash, or other property,
distributed by the Issuer upon such conversion or exchange); (D) the amount
equal to the net reduction in Investments made by the Issuer or any of its
Restricted Subsidiaries in any Person resulting from (i) repurchases or
redemptions of such Investments by such Person, proceeds realized upon the sale
of such Investment to an unaffiliated purchaser, repayments of loans or advances
or other transfers of assets (including by way of dividend or distribution) by
such Person to the Issuer or any Restricted Subsidiary of the Issuer or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in
each case as provided in the definition of "Investment") not to exceed, in the
case of any Unrestricted Subsidiary, the amount of Investments previously made
by the Issuer or any Restricted Subsidiary in such Unrestricted Subsidiary,
which amount was included in the calculation of the amount of Restricted
Payments; provided, however, that no amount shall be included under this clause
(D) to the extent it is already included in Consolidated Net Income.
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(b) The provisions of paragraph (a) shall not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Issuer or any Restricted Subsidiary made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock of the Issuer (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans from the
Issuer or any Restricted Subsidiary unless such loans have been repaid with cash
on or prior to the date of determination); provided, however, that (A) such
purchase or redemption shall be excluded in subsequent calculations of the
amount of Restricted Payments and (B) the aggregate net proceeds from such sale
shall be excluded from clause (3) (B) of paragraph (a); (ii) any purchase or
redemption of Subordinated Obligations of the Issuer made by exchange for, or
out of the proceeds of the substantially concurrent sale of, Subordinated
Obligations of the Issuer; provided, however, that such purchase or redemption
shall be excluded in subsequent calculations of the amount of Restricted
Payments; (iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 1016; provided, however,
that such purchase or redemption shall be excluded in subsequent calculations of
the amount of Restricted Payments; (iv) dividends paid within 60 days after the
date of declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividend shall be
included in subsequent calculations of the amount of Restricted Payments; (v)
payments for the purpose of, and in amounts equal to, amounts required to permit
the Issuer to redeem or repurchase Capital Stock of the Issuer or the Parent
from existing or former employees or management of the Issuer or any Parent
thereof or any Subsidiary or their assigns, estates or heirs, in each case in
connection with the repurchase provisions under employee stock option or stock
purchase agreements or other agreements to compensate management employees;
provided that such redemption or repurchases pursuant to this clause shall not
exceed $5.0 million (and such maximum amount shall be increased by the amount of
any proceeds to the Company, Parent or the Issuer from (x) sales of Capital
Stock of the Issuer to management employees subsequent to the Issue Date and (y)
any "key-man" life insurance policies which are used to make such redemptions or
repurchases) in the aggregate; provided, however, that such payments shall be
included in the calculation of the amount of Restricted Payments; provided,
further, that the cancellation of Indebtedness owing to the Issuer, any Parent
thereof or the Company from members of management in connection with a
repurchase of Capital Stock of the Issuer, Parent or the Company will not be
deemed to constitute a Restricted Payment under the Indenture; (vi) loans or
advances made after the Issue Date to employees or directors of the Issuer,
Parent or any Subsidiary the proceeds of which are used to purchase Capital
Stock of the Issuer or any Parent thereof, in an aggregate amount not in excess
of $1.0 million at any one time outstanding; provided, however, that such
payments shall be included in the calculation of the amount of Restricted
Payments; (vii) cash dividends to the Parent, if any, in amounts equal to (A)
the amounts required for the Issuer or the Parent to pay any Federal, state or
local income taxes to the extent that such income taxes are attributable to the
income of the Issuer and its Subsidiaries, (B) the amounts required for the
Issuer or the Parent to pay franchise taxes and other fees required to maintain
its legal existence, (C) an amount not to exceed $250,000 in any fiscal year to
permit the Issuer or the Parent to pay its corporate overhead expenses incurred
in the ordinary course of business, and to pay salaries or other compensation of
employees who perform services for both the Parent and the Issuer, (D) so long
as no Default or Event of Default shall have occurred and be continuing, an
amount not to exceed $100,000 in the aggregate, to enable the Issuer or the
Parent to make payments to holders of its Capital Stock in lieu of issuance of
fractional shares of its Capital Stock; provided, however, that such payments
shall not be included in the calculation of the amount of Restricted Payments,
and (E) the amounts required for Parent to make indemnification payments under
the Recapitalization Agreement; (viii) repurchases of Capital Stock deemed to
occur upon the exercise of stock options if such Capital Stock represents a
portion of the exercise price hereof; provided, however, that such repurchases
shall not be included in the calculation of the amount of Restricted Payments;
(ix) any redemption of the Series B Preferred Stock of Dynamic Circuits, Inc.
(the "DCI B Preferred") by Dynamic Circuits, Inc. or any purchase of the DCI B
Preferred by the Issuer or any of its Subsidiaries at the redemption price of
the DCI B Preferred; provided, however, that such redemptions and purchases
shall not be included in the calculation of the amount of Restricted Payments;
(x) cash payments to holders of options to purchase capital stock of Dynamic
Circuits, Inc. as contemplated by the DCI Contribution Agreement (including,
without limitation, the deferred cash payments to be paid to holders of such
options pursuant to the DCI Contribution Agreement); provided, however, that
such payments shall not be included in the calculation of the amount of
Restricted Payments; and (xi) any other payments or actions contemplated by
the DCI
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Contribution Agreement or which otherwise occur in connection with the DCI
Transactions; provided, however, that any such payments or actions shall not be
included in the calculation of the amount of Restricted Payments.
(c) Not later than the date of making any Restricted Payment, the
Issuer shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 1009 were computed, which calculations may
be based upon the Issuer's latest available financial statements. The Trustee
shall have no duty to recompute or recalculate or verify the accuracy of the
information set forth in such Officers' Certificate.
(d) The Issuer will not permit any Unrestricted Subsidiary to become
a Restricted Subsidiary except in compliance with the second to last sentence of
the definition of "Unrestricted Subsidiary."
SECTION 1010. Limitation on Indebtedness by the Issuer.
----------------------------------------
The Issuer shall not Incur any Indebtedness, other than the
Indebtedness represented by (i) the Discount Notes, (ii) any Refinancing
Indebtedness incurred in connection with the Discount Notes, (iii) Guarantees of
Indebtedness for borrowed money Incurred by Non-Capital Subsidiaries or their
Restricted Subsidiaries as to which recourse is limited to the capital stock of
such Non-Capital Subsidiaries or their Restricted Subsidiaries and (iv)
Indebtedness of the Issuer owing to and held by any Wholly-Owned Subsidiary if
such Indebtedness is subordinated in right of payment to the Discount Notes and
the proceeds thereof are not used to pay dividends to the Issuer's stockholders;
provided, however, that any subsequent issuance or transfer of any Capital Stock
or any other event which results in any such Wholly-Owned Subsidiary ceasing to
be a Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Issuer or a Wholly-Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the Issuer.
SECTION 1010A. Limitations on Indebtedness by Details Capital.
----------------------------------------------
Details Capital shall not Incur any Indebtedness, other than the
Indebtedness represented by (i) the Capital Discount Notes, (ii) any Refinancing
Indebtedness incurred in connection with the Capital Discount Notes, (iii) the
Guarantee of the Bank Indebtedness, and (iv) Indebtedness of Details Capital
owing to and held by any Wholly-Owned Subsidiary; provided, however, that any
subsequent issuance or transfer of any Capital Stock or any other event which
results in any such Wholly-Owned Subsidiary ceasing to be a Wholly-Owned
Subsidiary or any subsequent transfer of any such Indebtedness (except to the
Issuer or a Wholly-Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by Details Capital.
SECTION 1010B. Limitation on Indebtedness by Non-Capital Subsidiaries.
------------------------------------------------------
(a) Each Non-Capital Subsidiary shall not, and shall not permit any
of its Restricted Subsidiaries to, Incur any Indebtedness; provided, however,
that a Non-Capital Subsidiary and its Restricted Subsidiaries may Incur
Indebtedness if on the date thereof the Consolidated Coverage Ratio for such
Non-Capital Subsidiary and its Restricted Subsidiaries is at least 2.00 to 1.00.
(b) Notwithstanding the foregoing paragraph (a), each Non-Capital
Subsidiary and its Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness of such Non-Capital Subsidiary owing to and held by any Wholly-
Owned Subsidiary of such Non-Capital Subsidiary or Indebtedness of a Restricted
Subsidiary of such Non-Capital Subsidiary owing to and held by such Non-Capital
Subsidiary or any Wholly-Owned Subsidiary of such Non-Capital Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital Stock
or any other event which results in any such Wholly-Owned Subsidiary of such
Non-Capital Subsidiary ceasing to be a Wholly-Owned Subsidiary of such Non-
Capital Subsidiary or any subsequent transfer of any such Indebtedness (except
to such Non-Capital Subsidiary or a Wholly-Owned Subsidiary of such Non-Capital
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof; (ii) Indebtedness under Currency Agreements
and Interest Rate Agreements; provided, however, that in the case of Currency
Agreements and Interest Rate Agreements, such Currency Agreements and Interest
Rate
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Agreements are entered into for bona fide hedging purposes of such Non-Capital
Subsidiary or its Restricted Subsidiaries (as determined in good faith by the
Board of Directors or senior management of such Non-Capital Subsidiary) and
correspond in terms of notional amount, duration, currencies and interest rates,
as applicable, to Indebtedness of such Non-Capital Subsidiary or its Restricted
Subsidiaries Incurred without violation of the Note Purchase Agreement or to
business transactions of such Non-Capital Subsidiary or its Restricted
Subsidiaries on customary terms entered into in the ordinary course of business;
(iii) Indebtedness incurred by such Non-Capital Subsidiary or any of its
Restricted Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; (iv) Indebtedness arising
from agreements of such Non-Capital Subsidiary or a Restricted Subsidiary of
such Non-Capital Subsidiary providing for indemnification, adjustment of
purchase price, earn out or other similar obligations, in each case, incurred or
assumed in connection with the disposition of any business, assets or a
Restricted Subsidiary of such Non-Capital Subsidiary, provided that the maximum
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by such Non-Capital Subsidiary and its Restricted
Subsidiaries in connection with such disposition; and (v) obligations in respect
of performance and surety bonds and completion guarantees provided by such Non-
Capital Subsidiary or any Restricted Subsidiary of such Non-Capital Subsidiary
in the ordinary course of business.
SECTION 1011. Limitation on Indebtedness by the Company.
-----------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness; provided, however, that the Company and
its Restricted Subsidiaries may Incur Indebtedness if on the date thereof the
Consolidated Coverage Ratio for the Company and its Restricted Subsidiaries is
at least 2.00 to 1.00.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to the Senior Credit Agreement; provided, however, that the
aggregate principal amount of all Indebtedness Incurred pursuant to this clause
(i) does not exceed $350 million at any time outstanding, less the aggregate
principal amount of all mandatory prepayments of principal thereof with the
proceeds of Asset Dispositions; (ii) the Subsidiary Guarantees and Guarantees of
Indebtedness Incurred pursuant to clause (i); (iii) Indebtedness of the Company
owing to and held by any Wholly-Owned Subsidiary or Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Wholly-Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any Capital Stock
or any other event which results in any such Wholly-Owned Subsidiary ceasing to
be a Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer thereof;
(iv) Indebtedness represented by (x) the Senior Subordinated Notes, (y) any
Indebtedness (other than the Indebtedness described in clauses (i), (ii) and
(iii)) outstanding on the Issue Date and (z) any Refinancing Indebtedness
Incurred in respect of any Indebtedness described in this clause (iv) or clause
(v) or Incurred pursuant to paragraph (a) of this Section; (v) Indebtedness of a
Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company (other than Indebtedness Incurred to provide all or any portion of the
funds utilized to consummate the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Subsidiary or was
otherwise acquired by the Company); provided, however, that at the time such
Restricted Subsidiary is acquired by the Company, the Company would have been
able to Incur $1.00 of additional Indebtedness under this Section 1011 after
giving effect to the Incurrence of such Indebtedness pursuant to this clause
(v); (vi) Indebtedness under Currency Agreements and Interest Rate Agreements;
provided, however, that in the case of Currency Agreements and Interest Rate
Agreements, such Currency Agreements and Interest Rate Agreements are entered
into for bona fide hedging purposes of the Company or its Restricted
Subsidiaries (as determined in good faith by the Board of Directors or senior
management of the Company) and correspond in terms of notional amount, duration,
currencies and interest rates, as applicable, to Indebtedness of the Company or
its Restricted Subsidiaries Incurred without violation of the Indenture or to
business transactions of the Company or its Restricted Subsidiaries on customary
terms entered into in the ordinary course of business;
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(vii) Indebtedness of foreign Restricted Subsidiaries under working capital
facilities; provided that the aggregate principal amount of such Indebtedness
outstanding at any time does not exceed 5% of Consolidated Tangible Assets of
the Company; (viii) Indebtedness (including Capital Lease Obligations) incurred
by the Company or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person owning
such assets) in an aggregate principal amount outstanding not to exceed the
greater of (A) $5.0 million or (B) 5% of Consolidated Tangible Assets of the
Company at the time of any Incurrence thereof (including any Refinancing
Indebtedness with respect thereto); (ix) Indebtedness incurred by the Company or
any of its Restricted Subsidiaries constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including, without limitation, letters of credit in respect of workers'
compensation claims or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation claims; (x)
Indebtedness arising from agreements of the Company or a Restricted Subsidiary
of the Company providing for indemnification, adjustment of purchase price, earn
out or other similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Restricted
Subsidiary of the Company, provided that the maximum liability in respect of all
such Indebtedness shall at no time exceed the gross proceeds actually received
by the Company and its Restricted Subsidiaries in connection with such
disposition; (xi) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary of
the Company in the ordinary course of business; and (xii) Indebtedness (other
than Indebtedness described in clauses (i) through (xi)) in a principal amount
which, when taken together with the principal amount of all other Indebtedness
Incurred pursuant to this clause (xii) and then outstanding, will not exceed the
greater of (A) $5.0 million or (B) 5% of Consolidated Tangible Assets of the
Company.
SECTION 1012. Limitation on Affiliate Transactions.
------------------------------------
(a) The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or conduct any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Issuer (an "Affiliate
Transaction") unless: (i) the terms of such Affiliate Transaction are no less
favorable to the Issuer or such Restricted Subsidiary, as the case may be, than
those that could be obtained at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate; (ii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $2 million, the
terms of such transaction have been approved by a majority of the members of the
Board of Directors of the Issuer and by a majority of the members of such Board
having no personal stake in such transaction, if any (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in (i) above); and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $15 million, the Issuer
has received a written opinion from an independent investment banking firm of
nationally recognized standing that such Affiliate Transaction is not materially
less favorable than those that might reasonably have been obtained in a
comparable transaction at such time on an arms-length basis from a Person that
is not an Affiliate.
(b) The foregoing paragraph (a) shall not apply to (i) any Restricted
Payment permitted to be made pursuant to Section 1009, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors of the Issuer, (iii) the
payment of compensation and directors' fees and the performance of
indemnification or contribution obligations in the ordinary course of business,
(iv) loans or advances to employees in the ordinary course of business of the
Issuer or any of its Restricted Subsidiaries, (v) the execution, delivery and
performance of the Management Agreement, or (vi) any transaction between the
Issuer and a Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries.
SECTION 1013. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries.
-----------------------
The Issuer will not, and will not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual
encumbrance or consensual restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Issuer, (ii) make
any loans or advances to the Issuer or (iii) transfer any of its property or
assets to the Issuer, except (a) any encumbrance or restriction pursuant to an
agreement in effect at or entered into on the date of the Note Purchase
Agreement (including, without limitation, the Senior Credit Agreement, the
Capital Discount Notes and the Senior Subordinated Notes); (b) any encumbrance
or restriction with respect to a Restricted Subsidiary pursuant to
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an agreement relating to any Indebtedness Incurred by a Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was acquired by the
Issuer (other than Indebtedness Incurred to provide all or any portion of the
funds utilized to consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was acquired by the Issuer) and outstanding on such date; (c) any encumbrance or
restriction with respect to a Restricted Subsidiary pursuant to an agreement
effecting a refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (a) or (b) of this covenant or this clause (c) or
contained in any amendment to an agreement referred to in clause (a) or (b) of
this covenant or this clause (c); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any such
agreement or amendment are no less favorable to the Holders of the New Discount
Notes than encumbrances and restrictions contained in such agreements; (d) in
the case of clause (iii) above, any encumbrance or restriction (A) that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar contract, or
the assignment or transfer of any such lease, license or other contract, (B) by
virtue of any transfer of, agreement to transfer, option or right with respect
to, or Lien on, any property or assets of the Issuer or any Restricted
Subsidiary not otherwise prohibited by the Indenture, (C) contained in
mortgages, pledges or other security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements or (D) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Issuer or any Restricted Subsidiary; (e) any restriction with
respect to a Restricted Subsidiary (or any of its property or assets) imposed
pursuant to an agreement entered into for the direct or indirect sale or
disposition of all or substantially all the Capital Stock or assets of such
Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; (f) encumbrances
or restrictions arising or existing by reason of applicable law; (g) any
restrictions pursuant to the Indenture and the Senior Subordinated Notes; (h)
restrictions imposed by any agreement or instrument governing Capital Stock of
any Person that is acquired; and (i) restrictions on cash or other deposits or
net worth imposed by customers under contracts entered into in the ordinary
course of business.
SECTION 1014. Limitation on the Sale or Issuance of Preferred Stock
-----------------------------------------------------
of Restricted Subsidiaries.
--------------------------
The Issuer shall not sell any shares of Preferred Stock of a
Restricted Subsidiary and shall not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell any shares of its Preferred Stock to any Person
(other than to the Issuer or a Wholly-Owned Subsidiary).
SECTION 1015. Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each holder will have
the right to require the Issuer to repurchase all or any part of such holder's
New Discount Notes with respect to which the Issuer has not exercised its right
to redeem the New Discount Notes as described in Section 1101 at a purchase
price in cash equal to 101% of the outstanding principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (subject to the
right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date) or, in the case of purchases of New
Discount Notes prior to June 30, 2003, at a purchase price equal to 101% of the
Accreted Value thereof as of the date of purchase.
(b) Within 30 days following any Change of Control, unless the Issuer
has mailed a redemption notice with respect to all the outstanding New Discount
Notes in connection with such Change of Control as described in Section 1105,
the Issuer shall mail a notice to each holder with a copy to the Trustee
stating:
(i) that a Change of Control has occurred and that such holder
has the right to require the Issuer to purchase such holder's New Discount Notes
at a purchase price in cash equal to 101% of the outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of holders of record on a record date to receive interest
on the relevant interest payment date) or,
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in the case of purchases of New Discount Notes prior to June 30, 2003, at a
purchase price equal to 101% of the Accreted Value thereof as of the date of
purchase;
(ii) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(iii) the procedures determined by the Issuer, consistent with
the Indenture, that a holder must follow in order to have its New Discount Notes
purchased.
(c) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of New Discount Notes pursuant
to this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the Indenture, the Issuer will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in the Indenture by virtue thereof.
SECTION 1015A. Qualifying Public Offering.
--------------------------
(a) Upon the occurrence of a Qualifying Public Offering, each holder
will have the right to require the Issuer to repurchase all or any part of such
holder's New Discount Notes with respect to which the Issuer has not exercised
its right to redeem the New Discount Notes as described in Section 1101 at a
purchase price in cash equal to the purchase price the Issuer would pay had it
elected to redeem such Discount Notes pursuant to Section 1101 hereof (subject
to the right of holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
(b) Unless the Issuer has mailed a redemption notice with respect to
all the outstanding New Discount Notes in connection with such Qualifying Public
Offering as described in Section 1105, whenever the Parent proposes to register
any shares of its common stock under the Securities Act for a public offering
which the Issuer believes is reasonably likely to be a Qualifying Public
Offering, the Issuer shall not later than thirty days prior to the expected date
of the consummation of the offering (or the date on which the Issuer becomes
aware of a proposed offering which is reasonably likely to be a Qualifying
Public Offering, if such date is less than thirty days prior to the expected
date of the consummation of the offering) the Issuer shall mail a notice (which
may be revoked as set forth in clause (iii) below) to each holder with a copy to
the Trustee stating:
(i) that a public offering which the Issuer believes is
reasonably likely to be a Qualifying Public Offering is proposed and that if
such offering occurs and is a Qualifying Public Offering such holder will have
the right to require the Issuer to purchase such holder's New Discount Notes at
a purchase price in cash equal to the purchase price the Issuer would pay had it
elected to redeem such Discount Notes pursuant to Section 1101 hereof (subject
to the right of holders of record on a record date to receive interest on the
relevant interest payment date);
(ii) the expected approximate date for the consummation of the
offering;
(iii) that the sending of such notice creates no obligation of
the Parent or the Issuer to effect the proposed offering and that such notice
may be revoked by the Issuer at any time it reasonably believes that the
proposed public offering will not occur or that the proposed public offering
will not be a Qualifying Public Offering; and
(iv) the procedures determined by the Issuer, consistent with the
Indenture, that a holder must follow in order to have its New Discount Notes
purchased.
(c) The Issuer shall use all reasonable efforts to repurchase all New
Discount Notes that have been requested to be repurchased pursuant to the
procedures referred to in clause (b)(iv) above concurrently with the
consummation of the Qualifying Public Offering. If it is not practicable for the
Issuer to repurchase such New Discount Notes concurrently with consummation of
the Qualifying Public Offering, it shall do so as soon thereafter as
practicable.
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(d) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of New Discount Notes pursuant
to this covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the Indenture, the Issuer will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in the Indenture by virtue thereof.
SECTION 1016. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless (i) the Issuer or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value, as determined in good faith
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition, (ii)
at least 75% of the consideration thereof received by the Issuer or such
Restricted Subsidiary is in the form of cash or Cash Equivalents and (iii) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Issuer (or such Restricted Subsidiary, as the case may be) (A)
first, to the extent the Issuer or any Restricted Subsidiary, as the case may
-----
be, elects (or is required by the terms of any Senior Indebtedness), to prepay,
repay or purchase Senior Indebtedness or Indebtedness (other than any Preferred
Stock) of a Wholly-Owned Subsidiary (in each case other than Indebtedness owed
to the Issuer or an Affiliate of the Issuer) within 180 days from the later of
the date of such Asset Disposition or the receipt of such Net Available Cash;
(B) second, to the extent of the balance of such Net Available Cash after
------
application in accordance with clause (A), at the Issuer's election to the
investment in Additional Assets within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; (C) third, to
-----
the extent of the balance of such Net Available Cash after application and in
accordance with clauses (A) and (B), to make an offer to purchase Senior
Subordinated Notes and other pari passu debt obligations subject to a similar
covenant at par plus accrued and unpaid interest, if any, thereon; (D) fourth,
------
to the extent of the balance of such Net Available Cash after application and in
accordance with clauses (A), (B) and (C), to make an offer to purchase the
Capital Discount Notes and other pari passu debt obligations subject to a
similar covenant at par plus accrued and unpaid interest, if any, thereon; (E)
fifth, to the extent of the balance of such Net Available Cash after application
and in accordance with clauses (A), (B), (C) and (D) to make an offer to
purchase (an "Offer") the New Discount Notes at a price in cash equal to, prior
to June 30, 2003, 100% of the Accreted Value thereof on the purchase date and,
thereafter, 100% of the Accreted Value thereof plus accrued and unpaid interest
to the purchase date; and (F) sixth, to the extent of the balance of such Net
Available Cash after application in accordance with clauses (A), (B), (C), (D)
and (E) for other general corporate purposes not prohibited by the Indenture;
provided, however, that, in connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (A) above, the Issuer or such
Restricted Subsidiary shall retire such Indebtedness and shall cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions, the Issuer and its Restricted Subsidiaries shall not be required to
apply any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this covenant exceed $5 million. the Issuer shall not
be required to make an Offer for the New Discount Notes pursuant to this
covenant if the Net Available Cash available therefor (after application of the
proceeds as provided in clauses (A), (B), (C)and (D)) are less than $5 million
for any particular Asset Disposition (which lesser amounts shall be carried
forward for purposes of determining whether an Offer is required with respect to
the Net Available Cash from any subsequent Asset Disposition).
(b) For the purposes of this covenant, the following will be deemed
to be cash: (x) the assumption by the transferee of Indebtedness of any
Restricted Subsidiary of the Issuer and the release of the Issuer or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Disposition (in which case the Issuer shall, without further action,
be deemed to have applied such assumed Indebtedness in accordance with clause
(A) of the preceding paragraph), (y) securities received by the Issuer or any
Restricted Subsidiary of the Issuer from the transferee that are promptly
converted by the Issuer or such Restricted Subsidiary into cash and (z) any
Designated Noncash Consideration received by the Issuer or any of its Restricted
Subsidiaries in such Asset Disposition having an aggregate fair market value,
taken together with all other Designated Noncash Consideration received pursuant
to this clause (z) that is at that time outstanding, not to exceed 10% of
Consolidated Tangible Assets of the Issuer at the time of the receipt
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of such Designated Noncash Consideration (with the fair market value of each
item of Designated Noncash Consideration being measured at the time received and
without giving effect to subsequent changes in value).
(c) In the event of an Asset Disposition that requires the purchase
of New Discount Notes pursuant to clause (a)(iii)(E), the Issuer will be
required to purchase New Discount Notes tendered pursuant to an offer by the
Issuer for the New Discount Notes at a price in cash equal to, prior to June 30,
2003, 100% of the Accreted Value thereof on the purchase date and, thereafter,
100% of the Accreted Value thereof plus accrued and unpaid interest, if any, to
the purchase date in accordance with the procedures (including prorating in the
event of oversubscription) set forth in the Indenture. If the aggregate purchase
price of the New Discount Notes tendered pursuant to the offer is less than the
Net Available Cash allotted to the purchase of the New Discount Notes, the
Issuer will apply the remaining Net Available Cash in accordance with clause
(a)(iii)(F) above.
(d) The Issuer will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of New Discount Notes pursuant
to the Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Indenture by virtue thereof.
SECTION 1017. SEC Reports.
-----------
Notwithstanding that the Issuer may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, to the extent permitted
by the Exchange Act, the Issuer will file with the SEC and provide, within 15
days after the Issuer is required to file the same with the SEC, the Trustee and
the holders of the New Discount Notes with the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that are
specified in Section 13 or 15(d) of the Exchange Act. In the event that the
Issuer is not permitted to file such reports, documents and information with the
SEC pursuant to the Exchange Act, the Issuer will nevertheless deliver such
Exchange Act information to the holders of the New Discount Notes as if the
Issuer were subject to the reporting requirements of Section 13 and 15(d) of the
Exchange Act.
SECTION 1018. Limitation on Lines of Business.
-------------------------------
The Issuer will not, and will not permit any Restricted Subsidiary to,
engage in any business other than a Related Business.
SECTION 1019. Statement by Officers as to Default.
-----------------------------------
(a) The Issuer will deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Issuer and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing officers with a
view to determining whether it has kept, observed, performed and fulfilled, and
has caused each of its Restricted Subsidiaries to keep, observe, perform and
fulfill its obligations under this Indenture and further stating, as to each
such officer signing such certificate, that, to the best of his or her
knowledge, the Issuer during such preceding fiscal year has kept, observed,
performed and fulfilled, and has caused each of its Restricted Subsidiaries to
keep, observe, perform and fulfill each and every such covenant contained in
this Indenture and no Default or Event of Default occurred during such year and
at the date of such certificate there is no Default or Event of Default which
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe its status, with particularity
and that, to the best of his or her knowledge, no event has occurred and remains
by reason of which payments on the account of the principal of or interest, if
any, on the New Discount Notes is prohibited or if such event has occurred, a
description of the event and what action each is taking or proposes to take with
respect thereto. The Officers' Certificate shall also notify the Trustee should
the Issuer elect to change the manner in which it fixes its fiscal year end. For
purposes of this Section 1019(a), such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Issuer or any Significant Subsidiary
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gives any notice or takes any other action with respect to a claimed Default
(other than with respect to Indebtedness in the principal amount of less than
$10 million), the Issuer shall deliver to the Trustee by registered or certified
mail or facsimile transmission an Officers' Certificate specifying such event,
notice or other action within five Business Days of its occurrence.
1100.
ARTICLE ELEVEN. REDEMPTION OF NEW DISCOUNT NOTES
SECTION 1101. Optional Redemption.
-------------------
The New Discount Notes may or shall, as the case may be, be redeemed,
as a whole or from time to time in part, subject to the conditions and at the
Redemption Prices specified in the Form of New Discount Note (Section 203),
together with accrued interest to the redemption date. Exhibit F to the Note
Purchase Agreement sets forth examples of Redemption Prices as of certain dates
for illustrative purposes only.
SECTION 1102. Applicability of Article.
------------------------
Redemption of New Discount Notes at the election of the Issuer or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Issuer to redeem any New Discount Notes pursuant
to Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Issuer, the Issuer shall, at least 90 days
prior to the Redemption Date fixed by the Issuer (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of (or in the case of redemption prior to June 30, 2003,
the Accreted Value of) New Discount Notes to be redeemed and shall deliver to
the Trustee such documentation and records as shall enable the Trustee to select
the New Discount Notes to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of New Discount Notes to Be
------------------------------------------------
Redeemed.
--------
If less than all the New Discount Notes are to be redeemed at any time
pursuant to an optional redemption, the particular New Discount Notes to be
redeemed shall be selected not more than 90 days prior to the Redemption Date by
the Trustee, from the outstanding New Discount Notes not previously called for
redemption, in compliance with the requirements of the principal securities
exchange, if any, on which such New Discount Notes are listed, or, if such New
Discount Notes are not so listed, on a pro rata basis and which may provide for
the selection for redemption of portions of the principal of (or Accreted Value
of) the New Discount Notes; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of (or Accreted Value of) a New
Discount Note not redeemed to less than $100,000.
The Trustee shall promptly notify the Issuer in writing of the New
Discount Notes selected for redemption and, in the case of any New Discount
Notes selected for partial redemption, the principal amount thereof (or Accreted
Value thereof) to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of New Discount Notes shall
relate, in the case of any New Discount Note redeemed or to be redeemed only in
part, to the portion of the principal amount of (or Accreted Value of) such New
Discount Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 90 days prior to the Redemption Date,
to each Holder of New Discount Notes to be redeemed. The Trustee shall give
notice of redemption in the Issuer's name and at the Issuer's expense; provided,
however, that the Issuer shall deliver to the Trustee, at least 45 days prior to
the Redemption Date,
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an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
following items.
All notices of redemption shall state:
(i) the Redemption Date,
(ii) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 1107, if any,
(iii) if less than all outstanding New Discount Notes are to be
redeemed, the identification of the particular New Discount Notes (or
portion thereof) to be redeemed, as well as the aggregate principal amount
of (or Accreted Value of) New Discount Notes to be redeemed and the
aggregate principal amount of (or Accreted Value of) New Discount Notes to
be outstanding after such partial redemption,
(iv) in case any New Discount Note is to be redeemed in part
only, the notice which relates to such New Discount Note shall state that
on and after the Redemption Date, upon surrender of such New Discount Note,
the holder will receive, without charge, a new New Discount Note or New
Discount Notes of authorized denominations for the principal amount thereof
(or Accreted Value thereof) remaining unredeemed,
(v) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such New Discount Note, or the
portion thereof, to be redeemed, and, unless the Issuer defaults in making
the redemption payment, that interest on New Discount Notes called for
redemption (or the portion thereof) will cease to accrue on and after said
date,
(vi) the place or places where such New Discount Notes are to be
surrendered for payment of the Redemption Price and accrued interest, if
any,
(vii) the name and address of the Paying Agent,
(viii) that New Discount Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price,
(ix) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any, listed in such
notice or printed on the New Discount Notes, and
(x) the paragraph of the New Discount Notes or Section of the
Indenture pursuant to which the New Discount Notes are to be redeemed.
SECTION 1106. Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Issuer shall deposit with the
Trustee or with a Paying Agent (or, if the Issuer is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and accrued interest on, all
the New Discount Notes which are to be redeemed on that date.
SECTION 1107. New Discount Notes Payable on Redemption Date.
---------------------------------------------
Notice of redemption having been given as aforesaid, the New Discount
Notes so to be redeemed shall, on the Redemption Date, become due and payable at
the Redemption Price therein specified (together with accrued interest, if any,
to the Redemption Date), and from and after such date (unless the Issuer shall
default in the payment of the Redemption Price and accrued interest) such New
Discount Notes shall cease to bear interest. Upon surrender of any such New
Discount Note for redemption in accordance with said notice, such New Discount
Note shall be paid by the Issuer at the Redemption Price, together with
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accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such New Discount Notes, or one or more
predecessor New Discount Notes, registered as such at the close of business on
the relevant Regular Record Date or Special Record Date, as the case may be,
according to their terms and the provisions of Section 311.
If any New Discount Note called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the New Discount Notes.
SECTION 1108. New Discount Notes Redeemed in Part.
-----------------------------------
Any New Discount Note which is to be redeemed only in part (pursuant
to the provisions of this Article) shall be surrendered at the office or agency
of the Issuer maintained for such purpose pursuant to Section 1002 (with, if the
Issuer or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing), and
the Issuer shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Note at the expense of the Issuer, a new New Discount Note or New
Discount Notes, of any authorized denomination as requested by such Holder, in
an aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the New Discount Note so surrendered, provided, that
each such new Note will be in a principal amount of $100,000 or integral
multiple thereof.
1200.
ARTICLE TWELVE. LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1201. the Issuer's Option to Effect Legal Defeasance or
-------------------------------------------------
Covenant Defeasance.
-------------------
The Issuer may, at its option, at any time, with respect to the New
Discount Notes, elect to have either Section 1202 or Section 1203 be applied to
all outstanding New Discount Notes upon compliance with the conditions set forth
in this Article Twelve. The Issuer in its sole discretion can defease the New
Discount Notes.
SECTION 1202. Legal Defeasance and Discharge.
------------------------------
Upon the Issuer's exercise under Section 1201 of the option applicable
to this Section 1202, the Issuer shall be deemed to have been discharged from
its obligations with respect to all outstanding New Discount Notes on the date
the conditions set forth in Section 1204 are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, such Legal Defeasance means that the Issuer
shall be deemed to have paid and discharged the entire Indebtedness represented
by the outstanding New Discount Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 1205 and the other Sections of
this Indenture referred to in (i) and (ii) below, and to have satisfied all its
other obligations under such New Discount Notes and this Indenture insofar as
such New Discount Notes are concerned (and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of outstanding New Discount Notes to
receive, solely from the trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any, on) and interest on such New Discount Notes when such payments are due,
(ii) the Issuer's obligations with respect to such New Discount Notes under
Sections 304, 305, 310, 1002 and 1003, (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, and the Issuer's obligations in
connection therewith and (iv) this Article Twelve.
If the Issuer exercises its Legal Defeasance Option, payment of the
New Discount Notes may not be accelerated because of an Event of Default.
Subject to compliance with this Article Twelve, the Issuer may
exercise its option under this Section 1202 notwithstanding the prior exercise
of its option under Section 1203 with respect to the New Discount Notes.
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SECTION 1203. Covenant Defeasance.
-------------------
Upon the Issuer's exercise under Section 1201 of the option applicable
to this Section 1203, the Issuer may terminate its obligations under any
covenant contained in Sections 1004 through 1019, the operation of Section
501(v), Section 501(vi) (with respect only to Significant Subsidiaries), Section
501(vii) (with respect only to Significant Subsidiaries) and 501(viii) and the
limitations contained in Sections 801(a)(iii) with respect to the outstanding
New Discount Notes on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the New Discount Notes shall
thereafter be deemed not to be "outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
New Discount Notes will not be outstanding for accounting purposes). If the
Issuer exercises its covenant defeasance option, payment of the New Discount
Notes may not be accelerated because of an Event of Default specified under
Section 501(iii), (v), (vi) (with respect only to Significant Subsidiaries),
(vii) (with respect only to Significant Subsidiaries) and (viii) or because of
the failure of the Issuer to comply with Section 801(a)(iii). For this purpose,
such Covenant Defeasance means that, with respect to the outstanding New
Discount Notes, the Issuer may omit to comply with and shall have no liability
in respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 501(iii),
but, except as specified above, the remainder of this Indenture and such New
Discount Notes shall be unaffected thereby.
SECTION 1204. Conditions to Legal Defeasance or Covenant Defeasance.
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The following shall be the conditions to application of either Section
1202 or Section 1203 to the outstanding New Discount Notes:
(i) the Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of this Indenture who shall agree to comply with the provisions of this
Article Twelve applicable to it) as trust funds in trust money or
Government Obligations, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants
selected by the Issuer, to pay the principal of, premium, if any, and
interest due on the outstanding New Discount Notes on the Stated Maturity
or on the applicable Redemption Date as the case may be, of such principal,
premium, if any, or interest on the outstanding New Discount Notes;
(ii) in the case of Legal Defeasance, the Issuer shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee (which opinion may be subject to
customary assumptions and exclusions) confirming that (A) the Issuer has
received from, or there has been published by, the United States Internal
Revenue Service a ruling or (B) since the Issue Date, there has been a
change in the applicable U.S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel in the United States
(which opinion may be subject to customary assumptions and exclusions)
shall confirm that the Holders of the outstanding New Discount Notes will
not recognize income, gain or loss for U.S. federal income tax purposes as
a result of such Legal Defeasance and will be subject to U.S. 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 Issuer shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that, subject to customary
assumptions and exclusions, the Holders of the outstanding New Discount
Notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
such 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;
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(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in the period
ending on the 123rd day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Issuer is
a party or by which the Issuer is bound;
(vi) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. federal or state law, and that the Trustee has a
perfected security interest in such trust funds for the ratable benefit of
the Holders;
(vii) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuer with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Issuer or others;
(viii) the Issuer shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel in the United States (which
Opinion of Counsel may be subject to customary assumptions and exclusions)
each stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance, as the case may be, have been
complied with; and
(ix) the Issuer shall have delivered to the Trustee the opinion
of a nationally recognized firm of independent public accountants stating
the matters set forth in paragraph (i) above.
SECTION 1205. Deposited Money and Government Obligations to Be Held
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in Trust; Other Miscellaneous Provisions.
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Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1205, the "Trustee") pursuant to Section 1204 in respect of the
outstanding New Discount Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such New Discount Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such New Discount Notes of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1204 or the principal and interest received in respect
thereof.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the Issuer
Request any money or Government Obligations held by it as provided in Section
1204 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
SECTION 1206. Reinstatement.
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If the Trustee or any Paying Agent is unable to apply any money or
Government Obligations in accordance with Section 1205 by reason of any legal
proceeding or by any reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Issuer's obligations under this Indenture and the New
Discount Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 1202 or 1203, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 1205; provided,
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however, that if the Issuer makes any payment of principal of (or premium, if
any) or interest on any New Discount Note following the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of such
New Discount Notes to receive such payment from the money and Government
Obligations held by the Trustee or Paying Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
DETAILS INTERMEDIATE HOLDINGS CORP.
By ________________________________
Name:
Title:
Attest:
By ________________________
Name:
Title:
___________________________________
as Trustee
By ________________________________
Name:
Title:
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