Exhibit 4.2
-----------
The MAXIM Group, INC., AS ISSUER,
THE MAXIM GROUP, INC.
IMAGE INDUSTRIES, INC.
XXXXXXXX & XXXXXXX INTERIORS, INC.
XXXXXXXX & XXXXXXX DRAPERY CO., INC.
FIRST QUALITY, INC.
XXXXX XXXXXXXX INTERIORS & ASSOCIATES, INC.
BAY AREA CARPETS, INC.
CARPET WORLD, INC.
RNA ENTERPRISES, INC.
GCO, INC.
XXXXXX CARPETS & FLOORS, INC.
RUGS N REMNANTS, INC.
CARPET GALLERY, INC. (GEORGIA)
LOSANTVILLE CARPET OUTLET, INC.
AMERICAN CARPETS & INTERIORS, INC.
INVESTOR MANAGEMENT, INC.
GCO CARPET OUTLET, INC.
MAXIM RETAIL GROUP, INC.
CARPET COUNTRY, INC.
CARPETMAX, L.P.
TRI-R OF ORLANDO, INC.
CARPETMAX OF PALM BEACH, INC.
CREDITMAX CORP.
CARPETMAX OF NEW MEXICO, INC
CARPETMAX OF CHARLOTTE, INC.
CLOUD CARPETS, INC.
CARPETMAX ALABAMA CONTRACT, INC.
XXXXXX & XXXXXXX CARPETMAX OF TENNESSEE, INC.
MAXIM EQUIPMENT LEASING COMPANY, INC.
AS GUARANTORS, AND
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE
________
INDENTURE
DATED AS OF OCTOBER 16, 1997
$100,000,000
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007
Reconciliation and tie between Trust Indenture Act of 1939,
as amended, and Indenture, dated as of October 16, 1997
Trust Indenture Indenture
Act Section Section
--------------- ---------
(S) 310 (a)(1).................................... 609
(a)(2).................................... 609
(b)....................................... 607, 610
(S) 311 (a)....................................... 613
(S) 312 (a)....................................... 701
(c)....................................... 702
(S) 313 (a)....................................... 703
(c)....................................... 703, 704
(S) 314 (a)....................................... 704
(a)(4).................................... 1020
(c)(1).................................... 103
(c)(2).................................... 103
(e)....................................... 103
(S) 315 (a)....................................... 601(b)
(b)....................................... 602
(c)....................................... 601(a)
(d)....................................... 601(c), 603
(e)....................................... 514
(S) 316 (a)(last sentence)........................ 101 ("Outstanding")
(a)(1)(A)................................. 502, 512
(a)(1)(B)................................. 513
(b)....................................... 508
(c)....................................... 105
(S) 317 (a)(1).................................... 503
(a)(2).................................... 504
(b)....................................... 1003
(S) 318 (a)....................................... 108
-----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
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PAGE
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PARTIES.................................................................. 1
RECITALS................................................................. 1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...... 2
Section 101. Definitions................................................. 2
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"Acquired Indebtedness"................................... 2
"Administrative Agent".................................... 3
"Affiliate"............................................... 3
"Asset Sale".............................................. 3
"Average Life to Stated Maturity"......................... 3
"Bankruptcy Law".......................................... 3
"Board of Directors"...................................... 4
"Board Resolution"........................................ 4
"Book-Entry Security"..................................... 4
"Business Day"............................................ 4
"Capital Lease Obligation"................................ 4
"Capital Stock"........................................... 4
"Change of Control"....................................... 4
"Commission".............................................. 5
"Commodity Price Protection Agreement".................... 5
"Common Stock"............................................ 5
"Company"................................................. 5
"Company Request" or "Company Order"...................... 5
"Consolidated Fixed Charge Coverage Ratio"................ 6
"Consolidated Income Tax Expense"......................... 6
"Consolidated Interest Expense"........................... 6
"Consolidated Net Income (Loss)".......................... 6
"Consolidated Net Worth".................................. 7
"Consolidated Non-cash Charges"........................... 7
"Consolidation"........................................... 7
"Corporate Trust Office".................................. 7
"Credit Facility"......................................... 7
"Currency Hedging Arrangements"........................... 8
"Default"................................................. 8
"Depositary".............................................. 8
(i)
"Designated Senior Indebtedness".......................... 8
"Disinterested Director".................................. 8
"Event of Default"........................................ 9
"Exchange Act"............................................ 9
"Exchange Offer".......................................... 9
"Exchange Offer Registration Statement"................... 9
"Fair Market Value"....................................... 9
"Generally Accepted Accounting Principles" or
"GAAP"............................................... 9
"Global Securities"....................................... 9
"Guarantee"............................................... 9
"Guaranteed Debt"......................................... 9
"Guarantor"............................................... 10
"Guarantor Senior Indebtedness"........................... 10
"Holder".................................................. 10
"Indebtedness"............................................ 10
"Indenture"............................................... 11
"Indenture Obligations"................................... 11
"Initial Securities"...................................... 12
"Initial Purchasers"...................................... 12
"Interest Payment Date"................................... 12
"Interest Rate Agreements"................................ 12
"Investment".............................................. 12
"Issue Date".............................................. 12
"Lien".................................................... 12
"Maturity"................................................ 12
"Xxxxx'x"................................................. 13
"Net Cash Proceeds"....................................... 13
"Non-U.S. Person"......................................... 13
"Non-U.S. Subsidiaries"................................... 13
"Officers' Certificate"................................... 14
"Opinion of Counsel"...................................... 14
"Opinion of Independent Counsel".......................... 14
"Outstanding"............................................. 14
"Pari Passu Indebtedness"................................. 15
"Paying Agent"............................................ 15
"Permitted Investment".................................... 15
"Person".................................................. 16
"Predecessor Security".................................... 16
"Preferred Stock"......................................... 16
"Prospectus".............................................. 16
"Public Equity Offering".................................. 16
(ii)
"Purchase Money Obligation".............................. 16
"QIB".................................................... 17
"Qualified Capital Stock"................................ 17
"Redeemable Capital Stock"............................... 17
"Redemption Date"........................................ 17
"Redemption Price"....................................... 17
"Registration Rights Agreement".......................... 17
"Registration Statement"................................. 17
"Regular Record Date".................................... 18
"Regulation S Global Securities"......................... 18
"Responsible Officer".................................... 18
"Restricted Subsidiary".................................. 18
"Rule 144A Global Securities"............................ 18
"Sale and Leaseback Transaction"......................... 18
"S&P".................................................... 18
"Securities Act"......................................... 18
"Senior Indebtedness".................................... 18
"Senior Representative".................................. 19
"Series B Global Securities"............................. 19
"Shelf Registration Statement"........................... 19
"Significant Restricted Subsidiary"...................... 19
"Special Purpose Letter of Credit"....................... 19
"Special Record Date".................................... 20
"Stated Maturity"........................................ 20
"Subordinated Indebtedness".............................. 20
"Subsidiary"............................................. 20
"Temporary Cash Investments"............................. 20
"Trustee"................................................ 20
"Trust Indenture Act".................................... 20
"Unrestricted Subsidiary"................................ 20
"Unrestricted Subsidiary Indebtedness"................... 21
"Voting Stock"........................................... 22
"Wholly Owned Restricted Subsidiary"..................... 22
Section 102. Other Definitions.......................................... 22
-----------------
Section 103. Compliance Certificates and Opinions....................... 23
------------------------------------
Section 104. Form of Documents Delivered to Trustee..................... 24
--------------------------------------
Section 105. Acts of Holders............................................ 25
---------------
Section 106. Notices, etc., to the Trustee, the Company and any
--------------------------------------------------
Guarantor........................................... 26
---------
Section 107. Notice to Holders; Waiver.................................. 27
-------------------------
Section 108. Conflict with Trust Indenture Act.......................... 28
---------------------------------
Section 109. Effect of Headings and Table of Contents................... 28
----------------------------------------
(iii)
Section 110. Successors and Assigns..................................... 28
----------------------
Section 111. Separability Clause........................................ 28
-------------------
Section 112. Benefits of Indenture...................................... 28
---------------------
Section 113. GOVERNING LAW.............................................. 29
-------------
Section 114. Legal Holidays............................................. 29
--------------
Section 115. Independence of Covenants.................................. 29
-------------------------
Section 116. Schedules and Exhibits..................................... 29
----------------------
Section 117. Counterparts............................................... 29
------------
ARTICLE TWO SECURITY FORMS............................................. 30
Section 201. Forms Generally............................................ 30
---------------
Section 202. Form of Face of Security................................... 30
------------------------
Section 203. Form of Reverse of Securities.............................. 47
-----------------------------
Section 204. Form of Trustee's Certificate of Authentication............ 55
-----------------------------------------------
Section 205. Form of Guarantee of Each of the Guarantors................ 56
-------------------------------------------
Section 206. Form of Option of Holder to Elect Purchase................. 60
------------------------------------------
ARTICLE THREE THE SECURITIES........................................... 61
Section 301. Title and Terms............................................ 61
---------------
Section 302. Denominations.............................................. 62
-------------
Section 303. Execution, Authentication, Delivery and Dating............. 62
----------------------------------------------
Section 304. Temporary Securities....................................... 64
--------------------
Section 305. Registration, Registration of Transfer and Exchange........ 64
---------------------------------------------------
Section 306. Book-Entry Provisions for Global Securities................ 66
-------------------------------------------
Section 307. Special Transfer Provisions................................ 68
---------------------------
Section 308. Mutilated, Destroyed, Lost and Stolen Securities........... 71
------------------------------------------------
Section 309. Payment of Interest; Interest Rights Preserved............. 72
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Section 310. CUSIP Numbers.............................................. 74
-------------
Section 311. Persons Deemed Owners...................................... 74
---------------------
Section 312. Cancellation............................................... 74
------------
Section 313. Computation of Interest.................................... 74
-----------------------
ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE........................ 75
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.......................................... 75
----------
Section 402. Defeasance and Discharge................................... 75
------------------------
Section 403. Covenant Defeasance........................................ 75
-------------------
Section 404. Conditions to Defeasance or Covenant Defeasance............ 76
-----------------------------------------------
(iv)
Section 405. Deposited Money and U.S. Government Obligations to Be
-----------------------------------------------------
Held in Trust; Other Miscellaneous Provisions....... 78
---------------------------------------------
Section 406. Reinstatement.............................................. 79
-------------
ARTICLE FIVE REMEDIES.................................................. 80
Section 501. Events of Default.......................................... 80
-----------------
Section 502. Acceleration of Maturity; Rescission and Annulment......... 82
--------------------------------------------------
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee............................................. 83
-------
Section 504. Trustee May File Proofs of Claim........................... 84
--------------------------------
Section 505. Trustee May Enforce Claims without Possession of
------------------------------------------------
Securities.......................................... 85
----------
Section 506. Application of Money Collected............................. 85
------------------------------
Section 507. Limitation on Suits........................................ 86
-------------------
Section 508. Unconditional Right of Holders to Receive Principal,
---------------------------------------------------
Premium and Interest................................ 86
--------------------
Section 509. Restoration of Rights and Remedies......................... 87
----------------------------------
Section 510. Rights and Remedies Cumulative............................. 87
------------------------------
Section 511. Delay or Omission Not Waiver............................... 87
----------------------------
Section 512. Control by Holders......................................... 87
------------------
Section 513. Waiver of Past Defaults.................................... 88
-----------------------
Section 514. Undertaking for Costs...................................... 88
---------------------
Section 515. Waiver of Stay, Extension or Usury Laws.................... 89
---------------------------------------
Section 516. Remedies Subject to Applicable Law......................... 89
----------------------------------
ARTICLE SIX THE TRUSTEE................................................ 89
Section 601. Duties of Trustee.......................................... 89
-----------------
Section 602. Notice of Defaults......................................... 91
------------------
Section 603. Certain Rights of Trustee.................................. 91
-------------------------
Section 604. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Securities or Application of Proceeds Thereof....... 92
---------------------------------------------
Section 605. Trustee and Agents May Hold Securities; Collections; etc... 93
--------------------------------------------------------
Section 606. Money Held in Trust........................................ 93
-------------------
Section 607. Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim............................................... 93
-----
Section 608. Conflicting Interests...................................... 94
---------------------
Section 609. Trustee Eligibility........................................ 94
-------------------
Section 610. Resignation and Removal; Appointment of Successor
-------------------------------------------------
Trustee............................................. 95
-------
(v)
Section 611. Acceptance of Appointment by Successor.................... 96
--------------------------------------
Section 612. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business........................................... 97
--------
Section 613. Preferential Collection of Claims Against Company......... 98
-------------------------------------------------
Section 614. Appointment of Authenticating Agent....................... 98
-----------------------------------
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY........ 100
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders............................................ 100
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Section 702. Disclosure of Names and Addresses of Holders.............. 101
--------------------------------------------
Section 703. Reports by Trustee........................................ 101
------------------
Section 704. Reports by Company and Guarantors......................... 101
---------------------------------
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..... 102
Section 801. Company and Guarantors May Consolidate, etc., Only on
-----------------------------------------------------
Certain Terms...................................... 102
-------------
Section 802. Successor Substituted..................................... 105
---------------------
ARTICLE NINE SUPPLEMENTAL INDENTURES.................................. 106
Section 901. Supplemental Indentures and Agreements without Consent
------------------------------------------------------
of Holders......................................... 106
----------
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders............................................ 107
-------
Section 903. Execution of Supplemental Indentures and Agreements....... 108
---------------------------------------------------
Section 904. Effect of Supplemental Indentures......................... 109
---------------------------------
Section 905. Conformity with Trust Indenture Act....................... 109
-----------------------------------
Section 906. Reference in Securities to Supplemental Indentures........ 109
--------------------------------------------------
Section 907. Notice of Supplemental Indentures......................... 109
---------------------------------
Section 908. Revocation and Effects of Consents........................ 109
----------------------------------
Section 909. Effect on Senior Indebtedness............................. 110
-----------------------------
ARTICLE TEN COVENANTS................................................. 110
Section 1001. Payment of Principal, Premium and Interest............... 110
------------------------------------------
Section 1002. Maintenance of Office or Agency.......................... 110
-------------------------------
Section 1003. Money for Security Payments to Be Held in Trust.......... 110
-----------------------------------------------
(vi)
Section 1004. Corporate Existence...................................... 112
-------------------
Section 1005. Payment of Taxes and Other Claims........................ 112
---------------------------------
Section 1006. Maintenance of Properties................................ 113
-------------------------
Section 1007. Insurance................................................ 113
---------
Section 1008. Limitation on Indebtedness............................... 114
--------------------------
Section 1009. Limitation on Restricted Payments........................ 117
---------------------------------
Section 1010. Limitation on Transactions with Affiliates............... 121
------------------------------------------
Section 1011. Limitation on Liens...................................... 121
-------------------
Section 1012. Limitation on Senior Subordinated Indebtedness........... 122
----------------------------------------------
Section 1013. Limitation on Sale of Assets............................. 123
----------------------------
Section 1014. Limitation on Issuances of Guarantees of Indebtedness.... 128
-----------------------------------------------------
Section 1015. Restriction on Transfer of Assets........................ 129
---------------------------------
Section 1016. Purchase of Securities Upon a Change of Control.......... 129
-----------------------------------------------
Section 1017. Limitation on Restricted Subsidiary Capital Stock........ 133
-------------------------------------------------
Section 1018. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Restricted Subsidiaries.................. 133
---------------------------------
Section 1019. Limitations on Unrestricted Subsidiaries................. 134
----------------------------------------
Section 1020. Provision of Financial Statements........................ 134
---------------------------------
Section 1021. Statement by Officers as to Default...................... 135
-----------------------------------
Section 1022. Waiver of Certain Covenants.............................. 135
---------------------------
ARTICLE ELEVEN REDEMPTION OF SECURITIES............................... 136
Section 1101. Rights of Redemption..................................... 136
--------------------
Section 1102. Applicability of Article................................. 136
------------------------
Section 1103. Election to Redeem; Notice to Trustee.................... 136
-------------------------------------
Section 1104. Selection by Trustee of Securities to Be Redeemed........ 136
-------------------------------------------------
Section 1105. Notice of Redemption..................................... 137
--------------------
Section 1106. Deposit of Redemption Price.............................. 138
---------------------------
Section 1107. Securities Payable on Redemption Date.................... 138
-------------------------------------
Section 1108. Securities Redeemed or Purchased in Part................. 139
----------------------------------------
ARTICLE TWELVE SATISFACTION AND DISCHARGE............................. 139
Section 1201. Satisfaction and Discharge of Indenture.................. 139
---------------------------------------
Section 1202. Application of Trust Money............................... 140
--------------------------
ARTICLE THIRTEEN SUBORDINATION OF SECURITIES.......................... 141
Section 1301. Securities Subordinate to Senior Indebtedness............ 141
---------------------------------------------
Section 1302. Payment Over of Proceeds Upon Dissolution, etc........... 141
----------------------------------------------
(Vii)
Section 1303. Suspension of Payment When Designated Senior
--------------------------------------------
Indebtedness in Default............................ 143
-----------------------
1304. Payment Permitted if No Default.................................. 145
-----------------------
Section 1305. Subrogation to Rights of Holders of Senior Indebtedness.. 145
-------------------------------------------------------
Section 1306. Provisions Solely to Define Relative Rights.............. 145
-------------------------------------------
Section 1307. Trustee to Effectuate Subordination...................... 146
-----------------------------------
Section 1308. No Waiver of Subordination Provisions.................... 146
-------------------------------------
Section 1309. Notice to Trustee........................................ 147
-----------------
Section 1310. Reliance on Judicial Orders or Certificates.............. 148
-------------------------------------------
Section 1311. Rights of Trustee as a Holder of Senior Indebtedness;
----------------------------------------------------
Preservation of Trustee's Rights................... 148
--------------------------------
Section 1312. Article Applicable to Paying Agents...................... 148
-----------------------------------
Section 1313. No Suspension of Remedies................................ 148
-------------------------
Section 1314. Trustee's Relation to Senior Indebtedness................ 149
-----------------------------------------
ARTICLE FOURTEEN GUARANTEES............................................ 149
Section 1401. Guarantors' Guarantee.................................... 149
---------------------
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
------------------------------------------------------
Obligation......................................... 149
----------
Section 1403. Guarantee Absolute....................................... 151
------------------
Section 1404. Right to Demand Full Performance......................... 153
--------------------------------
Section 1405. Waivers.................................................. 154
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Section 1406. The Guarantors Remain Obligated in Event the Company is
-------------------------------------------------------
No Longer Obligated to Discharge Indenture
------------------------------------------
Obligations........................................ 155
-----------
Section 1407. Fraudulent Conveyance; Contribution; Subrogation........ 155
-------------------------------------------------
Section 1408. Guarantee is in Addition to Other Security............... 156
------------------------------------------
Section 1409. Release of Security Interests............................ 156
-----------------------------
Section 1410. No Bar to Further Actions................................ 156
-------------------------
Section 1411. Failure to Exercise Rights Shall Not Operate as a
-------------------------------------------------
Waiver; No Suspension of Remedies.................. 156
---------------------------------
Section 1412. Trustee's Duties; Notice to Trustee...................... 157
-----------------------------------
Section 1413. Successors and Assigns................................... 157
----------------------
Section 1414. Release of Guarantee..................................... 157
--------------------
Section 1415. Execution of Guarantee; Additional Guarantors........... 158
----------------------------------------------
Section 1416. Guarantee Subordinate to Guarantor Senior Indebtedness... 158
------------------------------------------------------
Section 1417. Payment Over of Proceeds Upon Dissolution of the
------------------------------------------------
Guarantor, etc..................................... 159
--------------
Section 1418. Default on Guarantor Senior Indebtedness................. 161
----------------------------------------
Section 1419. Payment Permitted by Each of the Guarantors if No
-------------------------------------------------
Default............................................ 161
-------
(Viii)
Section 1420. Subrogation to Rights of Holders of Guarantor Senior
----------------------------------------------------
Indebtedness...................................... 161
------------
Section 1421. Provisions Solely to Define Relative Rights.............. 162
-------------------------------------------
Section 1422. Trustee to Effectuate Subordination...................... 162
-----------------------------------
Section 1423. No Waiver of Subordination Provisions.................... 163
-------------------------------------
Section 1424. Notice to Trustee by Each of the Guarantors.............. 163
-------------------------------------------
Section 1425. Reliance on Judicial Orders or Certificates.............. 164
-------------------------------------------
Section 1426. Rights of Trustee as a Holder of Guarantor Senior
-------------------------------------------------
Indebtedness; Preservation of Trustee's Rights..... 165
----------------------------------------------
Section 1427. Article Applicable to Paying Agents...................... 165
-----------------------------------
Section 1428. No Suspension of Remedies................................ 165
-------------------------
Section 1429. Trustee's Relation to Guarantor Senior Indebtedness...... 165
---------------------------------------------------
TESTIMONIUM............................................................ 167
SIGNATURES............................................................. 167
ACKNOWLEDGMENTS
SCHEDULE I Existing Indebtedness
SCHEDULE II Dividend and Other Payments Affecting Subsidiaries
EXHIBIT A Form of Intercompany Note
EXHIBIT B Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Rule 144(k)
EXHIBIT C Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S
APPENDIX I Form of Transferee Certificate for Series A Securities
APPENDIX II Form of Transferee Certificate for Series B Securities
(ix)
INDENTURE, dated as of October 16, 1997, among The Maxim Group, Inc.,
a Delaware corporation (the "Company"), and Image Industries, Inc., Xxxxxxxx &
Xxxxxxx Interiors, Inc., Xxxxxxxx & Xxxxxxx Drapery Co., Inc., First Quality,
Inc., Xxxxx Xxxxxxxx Interiors & Associates, Inc., Bay Area Carpets, Inc.,
Carpet World, Inc., RNA Enterprises, Inc., GCO, Inc., Xxxxxx Carpets & Floors,
Inc., Rugs N Remnants, Inc., Carpet Gallery, Inc. (Georgia), Losantville Carpet
Outlet, Inc., American Carpets & Interiors, Inc., Investor Management, Inc., GCO
Carpet Outlet, Inc., Maxim Retail Group, Inc., First Quality of North Carolina,
Inc., Carpet Country, Inc., Carpetmax, L.P., Tri-R of Orlando, Inc., Carpetmax
of Palm Beach, Inc., Creditmax Corp., Carpetmax of New Mexico, Inc., Carpetmax
of Charlotte, Inc., Cloud Carpets, Inc., Carpetmax Alabama Contract, Inc.,
Xxxxxx & Xxxxxxx Carpetmax of Tennessee, Inc., Maxim Equipment Leasing Company,
Inc., as guarantors (collectively, the "Guarantors"), and State Street Bank and
Trust Company, a Massachusetts banking and trust company, as trustee (the
"Trustee").
RECITALS OF THE COMPANY AND THE GUARANTORS
The Company has duly authorized the creation of an issue of 9 1/4%
Senior Subordinated Notes due 2007, Series A (together with all such Series A
Securities issued in replacement of or exchange for any other Series A
Securities, the "Series A Securities" or the "Initial Securities"), and an issue
of 9 1/4% Senior Subordinated Notes due 2007, Series B (together with all such
Series B Securities issued in replacement of or exchange for any other Series B
Securities, the "Series B Securities" and, together with the Series A
Securities, the "Securities"), of substantially the tenor and amount hereinafter
set forth, and to provide therefor the Company has duly authorized the execution
and delivery of this Indenture and the Securities;
Each Guarantor has duly authorized the issuance of a Guarantee of the
Securities, of substantially the tenor hereinafter set forth, and to provide
therefor, each Guarantor has duly authorized the execution and delivery of this
Indenture and its Guarantee;
This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act that are required to be part of and to govern
indentures qualified under the Trust Indenture Act;
All acts and things necessary have been done to make (i) the
Securities, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid obligations of the Company, (ii) the Guarantees,
when executed by each of the Guarantors and delivered hereunder, the valid
obligation of each of the
Guarantors and (iii) this Indenture a valid agreement of the Company and each of
the Guarantors in accordance with the terms of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
-----------
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 include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(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) all references to $, US$, dollars or United States dollars shall
refer to the lawful currency of the United States of America; and
(f) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated.
Certain terms used principally in Article Four are defined in Article
Four.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Restricted Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary or
2
such acquisition, as the case may be. Acquired Indebtedness shall be deemed to
be incurred on the date of the related acquisition of assets from any Person or
the date the acquired Person becomes a Restricted Subsidiary, as the case may
be.
"Administrative Agent" means First Union National Bank, as
Administrative Agent under the Credit Facility.
"Affiliate" means, with respect to any specified Person: (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person; (ii) any other Person that
owns, directly or indirectly, 5% or more of such specified Person's Capital
Stock or any officer or director of any such specified Person or other Person
or, with respect to any natural Person, any person having a relationship with
such Person by blood, marriage or adoption not more remote than first cousin; or
(iii) any other Person 5% or more of the Voting Stock of which is beneficially
owned or held directly or indirectly by such specified Person. For the purposes
of this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all or substantially all of the properties
and assets of any division or line of business of the Company or its
Subsidiaries; or (iii) any other properties or assets of the Company or any
Subsidiary other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (A) that is governed by the provisions described under
Article 8 of this Indenture, (B) that is by the Company to any Guarantor, or by
any Subsidiary to the Company or any Wholly Owned Subsidiary in accordance with
the terms of this Indenture, (C) that is damaged, worn-out or obsolete equipment
in the ordinary course of business or (D) the Fair Market Value of which in the
aggregate does not exceed $1,000,000.
"Average Life to Stated Maturity" means, as of the date of
determination with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date of
determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such principal
payment by (ii) the sum of all such principal payments.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating to
bankruptcy,
3
insolvency, receivership, winding up, liquidation, reorganization or relief of
debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or
any Guarantor, as the case may be, or any duly authorized committee of such
board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or any Guarantor, as the case
may be, to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Book-Entry Security" means any Global Securities bearing the legend
specified in Section 202 evidencing all or part of a series of Securities,
authenticated and delivered to the Depositary for such series or its nominee,
and registered in the name of such Depositary or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions or trust companies in
The City of New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law, regulation or executive
order to close.
"Capital Lease Obligation" of any Person means any obligation of such
Person and its Subsidiaries on a Consolidated basis under any capital lease of
real or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of such Person's
capital stock or other equity interests whether now outstanding or issued after
the date hereof.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 50% of the total
outstanding Voting Stock of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election to such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved), cease
for any reason to constitute a majority of
4
such Board of Directors then in office; (iii) the Company consolidates with or
merges with or into any Person or conveys, transfers or leases all or
substantially all of its assets to any Person, or any corporation consolidates
with or merges into or with the Company in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is changed into
or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company or where (A) the outstanding Voting
Stock of the Company is changed into or exchanged for (x) Voting Stock of the
surviving corporation which is not Redeemable Capital Stock or (y) cash,
securities and other property (other than Capital Stock of the surviving
corporation) in an amount which could be paid by the Company as a Restricted
Payment as described under Section 1009 of this Indenture (and such amount shall
be treated as a Restricted Payment subject to the provisions in the Indenture
described under Section 1009) and (B) no "person" or "group" owns immediately
after such transaction, directly or indirectly, more than 50% of the total
outstanding Voting Stock of the surviving corporation; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation or dissolution other
than in a transaction which complies with the provisions described under Article
Eight.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act then the
body performing such duties at such time.
"Commodity Price Protection Agreement" means any forward contract,
commodity swap, commodity option or other similar financial agreement or
arrangement relating to, or the value of which is dependent upon, fluctuations
in commodity prices.
"Common Stock" means the common stock, $.001 par value per share, of
the Company.
"Company" means The Maxim Group, Inc., a corporation incorporated
under the laws of Delaware, until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
President, its Chief Executive Officer, its Chief Financial Officer or a Vice
President (regardless of Vice Presidential designation), and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
5
"Consolidated Fixed Charge Coverage Ratio" of any Person means, for
any period, the ratio of (a) the sum of Consolidated Net Income (Loss),
Consolidated Interest Expense, Consolidated Income Tax Expense and Consolidated
Non-cash Charges deducted in computing Consolidated Net Income (Loss) in each
case, for such period, of such Person and its Restricted Subsidiaries on a
Consolidated basis, all determined in accordance with GAAP to (b) the sum of
Consolidated Interest Expense for such period and cash and non-cash dividends
paid on any Preferred Stock of such Person during such period; provided that (i)
in making such computation, the Consolidated Interest Expense attributable to
interest on any Indebtedness computed on a pro forma basis and (A) bearing a
floating interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period and (B) which was
not outstanding during the period for which the computation is being made but
which bears, at the option of such Person, a fixed or floating rate of interest,
shall be computed by applying at the option of such Person either the fixed or
floating rate and (ii) in making such computation, the Consolidated Interest
Expense of such Person attributable to interest on any Indebtedness under a
revolving credit facility computed on a pro forma basis shall be computed based
upon the average daily balance of such Indebtedness during the applicable
period.
"Consolidated Income Tax Expense" of any Person means, for any period,
the provision for federal, state, local and foreign income taxes of such Person
and its Consolidated Restricted Subsidiaries for such period as determined in
accordance with GAAP.
"Consolidated Interest Expense" of any Person means, without
duplication, for any period, the sum of (a) the interest expense of such Person
and its Restricted Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt discount, (ii) the net
costs associated with Interest Rate Agreements, Currency Hedging Arrangements
and Commodity Price Protection Agreements (including amortization of discounts),
(iii) the interest portion of any deferred payment obligation and (iv) accrued
interest, plus (b) (i) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person and its
Subsidiaries during such period and (ii) all capitalized interest of such Person
and its Subsidiaries plus (c) the interest expense under any Guaranteed Debt of
such Person and any Restricted Subsidiary to the extent not included under
clause (a)(iv) above.
"Consolidated Net Income (Loss)" of any Person means, for any period,
the Consolidated net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a Consolidated basis as determined in accordance
with GAAP, adjusted, to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) all extraordinary gains or losses,
net of taxes (less all fees and expenses
6
relating thereto), (ii) the portion of net income (or loss) of such Person and
its Restricted Subsidiaries on a Consolidated basis allocable to minority
interests in unconsolidated Persons to the extent that cash dividends or
distributions have not actually been received by such Person or one of its
Consolidated Restricted Subsidiaries, (iii) net income (or loss) of any Person
combined with such Person or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(iv) any gain or loss, net of taxes, realized upon the termination of any
employee pension benefit plan, (v) net gains (or losses), net of taxes (less all
fees and expenses relating thereto), in respect of dispositions of assets other
than in the ordinary course of business, (vi) the net income of any Restricted
Subsidiary to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (vii) any restoration to income of any contingency reserve, net of
taxes, except to the extent provision for such reserve was made out of income
accrued at any time following the date of the Indenture, or (viii) any gain, net
of taxes, arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness of such Person.
"Consolidated Net Worth" of any Person, as of a date, means the
Consolidated stockholders' equity (excluding Redeemable Capital Stock) of such
Person and its Restricted Subsidiaries, as of such date, as determined in
accordance with GAAP.
"Consolidated Non-cash Charges" of any Person means, for any period,
the aggregate depreciation, amortization and other non-cash charges of such
Person and its Restricted Subsidiaries on a Consolidated basis for such period,
as determined in accordance with GAAP (excluding any non-cash charge which
requires an accrual or reserve for cash charges for any future period).
"Consolidation" means, with respect to any Person, the consolidation
of the accounts of such Person and each of its Restricted Subsidiaries if and to
the extent the accounts of such Person and each of its Restricted Subsidiaries
would normally be consolidated with those of such Person, all in accordance with
GAAP. The term "Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an
affiliate or agent thereof at which at any particular time the corporate trust
business for the purposes of this Indenture shall be principally administered,
which office at the date of execution of this Indenture is located at 000 Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
"Credit Facility" means the Credit Agreement dated as of August 26,
1997 by and among the Company and the Guarantors, as co-borrowers, and First
Union
7
National Bank, Fleet National Bank and the other lenders named therein,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, as such credit agreement and/or
related documents may be amended, restated, supplemented, renewed, replaced or
otherwise modified from time to time whether or not with the same agent,
trustee, lenders or holders, and, subject to the provisos to the next sentence,
irrespective of any changes in the terms and conditions thereof. Without
limiting the generality of the foregoing, the term "Credit Facility" shall
include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to the Credit Facility and all
refundings, refinancings and replacements of the Credit Facility, including any
agreement (i) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, so long as borrowers and issuers include the Company and its
successors and assigns, (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder, provided that on the date
such Indebtedness is incurred it would not exceed the amount permitted to be
incurred by clause (i) of paragraph (b) of Section 1008 or (iv) otherwise
altering the terms and conditions thereof; provided, further, that in the case
of clauses (i) through (iv), any such agreement is not prohibited by the terms
of this Indenture
"Currency Hedging Arrangements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
foreign exchange contracts, currency swap agreements or other similar agreements
or arrangements designed to protect against the fluctuations in currency values.
"Default" means any event which is, or after notice or passage of any
time or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form
of one or more Book-Entry Securities, The Depository Trust Company ("DTC"), its
nominees and successors, or another Person designated as Depositary by the
Company, which must be a clearing agency registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
under, or in respect of, the Credit Facility, and (ii) any other Senior
Indebtedness which at the time of determination has an aggregate principal
amount outstanding of at least $10 million and is specifically designated in the
instrument evidencing such Senior Indebtedness or the agreement under which such
Senior Indebtedness arises as "Designated Senior Indebtedness" by the Company.
"Disinterested Director" means, with respect to any transaction or
series of related transactions, a member of the Board of Directors of the
Company who does not have any material direct or indirect financial interest in
or with respect to such transaction
8
or series of related transactions. No non-management director shall be deemed
not to be a Disinterested Director by reason of his or her receipt of reasonable
and customary director's fees or the participation in reasonable and customary
director's stock grant, stock option or stock benefit plans, or such other form
of director remuneration as is reasonable and customary.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exchange Offer" means the exchange offer by the Company and the
Guarantors of Series B Securities for Series A Securities to be effected
pursuant to Section 2.1 of the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the registration
statement under the Securities Act contemplated by Section 2.1 of the
Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date hereof.
"Global Securities" means the Rule 144A Global Securities, the
Regulation S Global Securities and the Series B Global Securities to be issued
as Book-Entry Securities issued to the Depositary in accordance with Section
306.
"Guarantee" means the guarantee by any Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
below guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (i)
to pay or purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, (iii) to supply
9
funds to, or in any other manner invest in, the debtor (including any agreement
to pay for property or services without requiring that such property be received
or such services be rendered), (iv) to maintain working capital or equity
capital of the debtor, or otherwise to maintain the net worth, solvency or other
financial condition of the debtor or (v) otherwise to assure a creditor against
loss; provided that the term "guarantee" shall not include endorsements for
collection or deposit, in either case in the ordinary course of business.
"Guarantor" means the Subsidiaries listed as guarantors in this
Indenture and any other Subsidiary which is a guarantor of the Securities,
including any Person that is required after the date of this Indenture to
execute a guarantee of the Securities pursuant to Section 1011 or Section 1014
of this Indenture until a successor replaces such party pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor.
"Guarantor Senior Indebtedness" means the principal of, premium, if
any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy laws
whether or not allowable as a claim in such proceeding) and all other monetary
obligations (including fees) on any Indebtedness of any Guarantor (other than as
otherwise provided in this definition), whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, and whether at any time
owing, actually or contingent, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to any Guarantee. Notwithstanding the
foregoing, "Guarantor Senior Indebtedness" shall not include (i) Indebtedness
evidenced by the Guarantees, (ii) Indebtedness that is subordinate or junior in
right of payment to any Indebtedness of any Guarantor, (iii) Indebtedness which
when incurred and without respect to any election under Section 1111(b) of Title
11 of the United States Code, is without recourse to any Guarantor, (iv)
Indebtedness which is represented by Redeemable Capital Stock, (v) any liability
for foreign, federal, state, local or other taxes owed or owing by any Guarantor
to the extent such liability constitutes Indebtedness, (vi) Indebtedness of any
Guarantor to a Subsidiary or any other Affiliate of the Company or any of such
Affiliate's subsidiaries, (vii) Indebtedness evidenced by any guarantee of any
Subordinated Indebtedness or Pari Passu Indebtedness and (viii) that portion of
any Indebtedness which at the time of issuance is issued in violation of this
Indenture.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price
10
of property or services, excluding any trade payables and other accrued current
liabilities arising in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements, Currency
Hedging Arrangements or Commodity Price Protection Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness; provided,
however, that the amount determined to be Indebtedness of such Person due to
such Lien under this clause (vi) shall not exceed the Fair Market Value of the
property (including, without limitation, accounts and contract rights) subject
to such Lien, (vii) all Guaranteed Debt of such Person, (viii) all Redeemable
Capital Stock issued by such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends,
and (ix) any amendment, supplement, modification, deferral, renewal, extension,
refunding or refinancing of any liability of the types referred to in clauses
(i) through (viii) above. For purposes hereof, the "maximum fixed repurchase
price" of any Redeemable Capital Stock which does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Redeemable
Capital Stock as if such Redeemable Capital Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value to be determined
in good faith by the board of directors of the issuer of such Redeemable Capital
Stock.
"Indenture" means this instrument as originally executed (including
all exhibits and schedules thereto) and as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities including any
Guarantor, to pay principal of, premium, if any, and interest when due and
payable, and all other amounts
11
due or to become due under or in connection with this Indenture, the Securities
and the performance of all other obligations to the Trustee and the Holders
under this Indenture and the Securities, according to the respective terms
hereof and thereof.
"Initial Securities" has the meaning stated in the first recital of
this Indenture.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, First Union Capital Markets Corp. and Wheat, First Securities,
Inc.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means one or more of the following
agreements which shall be entered into by one or more financial institutions:
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of
interest rate hedging agreements from time to time.
"Investment" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit 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, acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities issued or owned by
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP.
"Issue Date" means the date on which the Securities are originally
issued under this Indenture.
"Lien" means any mortgage or deed of trust, charge, pledge, lien
(statutory or otherwise), privilege, security interest, assignment, deposit,
arrangement, easement, hypothecation, claim, preference, priority or other
encumbrance upon or with respect to any property of any kind (including any
conditional sale, capital lease or other title retention agreement, any leases
in the nature thereof, and any agreement to give any security interest), real or
personal, movable or immovable, now owned or hereafter acquired.
"Maturity" means, when used with respect to the Securities, the date
on which the principal of the Securities becomes due and payable as therein
provided or as provided in this Indenture, whether at Stated Maturity, the Offer
Date or the Redemption Date and whether by declaration of acceleration, Offer in
respect of Excess Proceeds,
12
Change of Control Offer in respect of a Change of Control, call for redemption
or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor
rating agency.
Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof (without duplication in respect of all Asset Sales)
in the form of cash or Temporary Cash Investments including payments in respect
of deferred payment obligations when received in the form of, or stock or other
assets when disposed of for, cash or Temporary Cash Investments (except to the
extent that such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary) net of (i) brokerage commissions and other
reasonable fees and expenses (including fees and expenses of counsel and
investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the assets or
properties the subject of such Asset Sale, (iv) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Subsidiary, as the case may be, as
a reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary, as the case
may be, after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officers' Certificate delivered to the
Trustee and (b) with respect to any issuance or sale of Capital Stock or
options, warrants or rights to purchase Capital Stock, or debt securities or
Capital Stock that have been converted into or exchanged for Capital Stock as
referred to under Section 1009 of this Indenture, the proceeds of such issuance
or sale in the form of cash or Temporary Cash Investments including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed of for, cash or Temporary Cash Investments (except
to the extent that such obligations are financed or sold with recourse to the
Company or any Restricted Subsidiary), net of attorneys' fees, accountants' fees
and brokerage, consultation, underwriting and other fees and expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Non-U.S. Person" means a Person that is not a "U.S. person" as
defined in Regulation S under the Securities Act.
"Non-U.S. Subsidiaries" means Subsidiaries organized under the laws of
jurisdictions other than the United States and the states and territories
thereof.
13
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, the Chief Executive Officer, the Chief Financial
Officer or a Vice President (regardless of Vice Presidential designation), and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company or any Guarantor, as the case may be, and delivered to
the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or any Guarantor unless an Opinion of Independent
Counsel is required pursuant to the terms of this Indenture, and who shall be
acceptable to the Trustee.
"Opinion of Independent Counsel" means a written opinion of counsel
which is issued by a Person who is not an employee, director or consultant
(other than non-employee legal counsel) of the Company or any Guarantor and who
shall be reasonably acceptable to the Trustee.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company or any Affiliate thereof) in trust or
set aside and segregated in trust by the Company or any Affiliate thereof (if
the Company or any Affiliate thereof shall act as its own Paying Agent) for the
Holders of such Securities; provided that if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor reasonably satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 402 and
403, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee and the Company proof reasonably satisfactory to each of them that such
Securities are held by a bona fide purchaser in whose hands the Securities are
valid obligations of the Company; provided, however, that in determining whether
the Holders of the requisite principal amount of Outstanding Securities have
given any request, demand, authorization,
14
direction, notice, consent or waiver hereunder, Securities owned by the Company,
any Guarantor, or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Securities and that the pledgee is not the Company, any
Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor.
"Pari Passu Indebtedness" means (a) any Indebtedness of the Company
which ranks pari passu in right of payment to the Securities and (b) with
respect to any Guarantee, Indebtedness which ranks pari passu in right of
payment to such Guarantee.
"Paying Agent" means any Person (including the Company) authorized by
the Company to pay the principal of, premium, if any, or interest on, any
Securities on behalf of the Company.
"Permitted Investment" means (i) Investments in any Wholly Owned
Restricted Subsidiary or any Person which, as a result of such Investment, (a)
becomes a Wholly Owned Restricted Subsidiary or (b) is merged or consolidated
with or into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or any Wholly Owned Restricted Subsidiary; (ii)
Indebtedness of the Company or a Restricted Subsidiary described under clauses
(iv), (v), (vi) and (vii) of paragraph (b) of Section 1008; (iii) Temporary
Cash Investments; (iv) Investments in any of the Securities; (v) Investments
acquired by the Company or any Restricted Subsidiary in connection with an Asset
Sale permitted under Section 1013 of this Indenture to the extent such
Investments are non-cash proceeds as permitted under such covenant; (vi)
Investments in existence on the date of this Indenture; (vii) guarantees of
Indebtedness of a Wholly Owned Restricted Subsidiary given by the Company or
another Wholly Owned Restricted Subsidiary and guarantees of Indebtedness of the
Company given by any Restricted Subsidiary, in each case, in accordance with the
terms of this Indenture; (viii) Investments in prepaid expenses; (ix)
Investments represented by accounts receivable created or required in the
ordinary course of business; (x) loans or advances to the Company's franchisees
in the ordinary course of business in an aggregate amount of $20 million at any
one time outstanding; and (xi) loans to executive officers of the Company in the
ordinary course of business, not to exceed, together with loans to executive
officers of the Company then outstanding, $1 million; and (xii) any other
Investments in the aggregate amount of $1 million at any one time outstanding.
15
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 308 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any Capital Stock
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over the
Capital Stock of any other class in such Person.
"Prospectus" means the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Series A Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"Public Equity Offering" means an underwritten offering of equity
securities with gross proceeds to the Company of at least $25 million pursuant
to a registration statement that has been declared effective by the Commission
(other than a registration statement on Form S-8 or otherwise relating to equity
securities issuable under any employee benefit plan of the Company).
"Purchase Money Obligation" means any Indebtedness secured by a Lien
on assets related to the business of the Company and its Restricted Subsidiaries
and any additions and accessions thereto, which are purchased by the Company and
its Restricted Subsidiaries at any time after the Securities are issued;
provided that (i) the security agreement or conditional sales or other title
retention contract pursuant to which the Lien on such assets is created
(collectively a "Purchase Money Security Agreement") shall be entered into
within 90 days after the purchase or substantial completion of the construction
of such assets and shall at all times be confined solely to the assets so
purchased or acquired, any additions and accessions thereto and any proceeds
therefrom, (ii) at no time shall the aggregate principal amount of the
outstanding Indebtedness secured thereby be increased, except in connection with
the purchase of additions and
16
accession thereto and except in respect of fees and other obligations in respect
of such Indebtedness and (iii) (A) the aggregate outstanding principal amount of
Indebtedness secured thereby (determined on a per asset basis in the case of any
additions and accessions) shall not at the time such Purchase Money Security
Agreement is entered into exceed 100% of the purchase price to the Company and
its Restricted Subsidiaries of the assets subject thereto or (B) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased or acquired, any additions and accessions thereto and any proceeds
therefrom.
"QIB" means a "Qualified Institutional Buyer" under Rule 144A under
the Securities Act.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any Capital Stock that, either by its terms or
by the terms of any security into which it is convertible or exchangeable or
otherwise, is or upon the happening of an event or passage of time would be,
required to be redeemed prior to any Stated Maturity of the principal of the
Securities or is redeemable at the option of the holder thereof at any time
prior to any such Stated Maturity, or is convertible into or exchangeable for
debt securities at any time prior to any such Stated Maturity at the option of
the holder thereof.
"Redemption Date" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the date fixed for
such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be
redeemed pursuant to any provision in this Indenture means the price at which it
is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of October 16, 1997, among the Company, the Guarantors and
the Initial Purchasers.
"Registration Statement" means any registration statement of the
Company and the Guarantors which covers any of the Series A Securities (and
related guarantees) or Series B Securities (and related guarantees) pursuant to
the provisions of the Registration Rights Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
17
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 1 or October 1 (whether or not a Business Day) next
preceding such Interest Payment Date.
"Regulation S Global Securities" means one or more permanent global
Securities in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S under the Securities Act.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or any other officer of the
Trustee to whom any corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means any Person, a majority of the equity
ownership or the Voting Stock of which is at the time owned, directly or
indirectly, by the Company or by one or more other Restricted Subsidiaries, or
by the Company and one or more other Restricted Subsidiaries; provided that any
Unrestricted Subsidiary shall not be deemed a Restricted Subsidiary under the
Securities.
"Rule 144A Global Securities" means one or more permanent global
Securities in registered form representing the aggregate principal amount of
Securities sold in reliance on Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property or asset in connection with the leasing, or the
resale against installment payments, of such property or asset to the seller or
transferor.
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., or any successor rating agency.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition initiating
any proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) and all other monetary obligations
(including fees) on any Indebtedness of the Company (other than as otherwise
provided in this definition), whether outstanding on the date of this Indenture
or thereafter created, incurred or assumed, and whether at any time owing,
actually or contingently, unless, in the case of any particular Indebtedness,
the instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of
18
payment to the Securities. Notwithstanding the foregoing, "Senior Indebtedness"
shall not include (i) Indebtedness evidenced by the Securities, (ii)
Indebtedness that is by its terms subordinate or junior in right of payment to
any Indebtedness of the Company, (iii) Indebtedness which, when incurred and
without respect to any election under Section 1111(b) of Title 11 of the United
States Code, is without recourse to the Company, (iv) Indebtedness which is
represented by Redeemable Capital Stock, (v) any liability for foreign, federal,
state, local or other tax owed or owing by the Company to the extent such
liability constitutes Indebtedness, (vi) Indebtedness of the Company to a
Subsidiary or any other Affiliate of the Company or any of such Affiliate's
subsidiaries and (vii) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture.
"Senior Representative" means the agent, indenture trustee or other
trustee or representative for any Senior Indebtedness.
"Series B Global Securities" means one or more permanent global
Securities in registered form representing the aggregate principal amount of
Series B Securities exchanged for Series A Securities pursuant to the Exchange
Offer.
"Shelf Registration Statement" means a "shelf" registration statement
of the Company and the Guarantors pursuant to Section 2.2 of the Registration
Rights Agreement, which covers all of the Registrable Securities (as defined in
the Registration Rights Agreement) on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the Commission,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Significant Restricted Subsidiary" means, at any particular time, any
Restricted Subsidiary that, together with the Subsidiaries of such Restricted
Subsidiary, (i) for the most recent fiscal year of the Company accounted for
more than 10% of the Consolidated revenues of the Company and its Subsidiaries
or (ii) at the end of such fiscal year, was the owner (beneficial or otherwise)
of more than 10% of the Consolidated assets of the Company and its Restricted
Subsidiaries, all as calculated in accordance with GAAP and shown on the
Consolidated financial statements of the Company and its Restricted
Subsidiaries.
"Special Purpose Letter of Credit" means the letter of credit of up to
$31 million issued by First Union National Bank under the Credit Facility
pursuant to the terms of the Reimbursement Agreement dated as of September 1,
1997, among the Company, the Guarantors and First Union National Bank.
19
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" means, when used with respect to any Indebtedness or
any installment of interest thereon, the dates specified in such Indebtedness as
the fixed date on which the principal of such Indebtedness or such installment
of interest, as the case may be, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Guarantor subordinated in right of payment to the Securities or the Guarantee of
such Guarantor, as the case may be.
"Subsidiary" means any Restricted Subsidiary or Unrestricted
Subsidiary.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof, and
guaranteed fully as to principal, premium, if any, and interest by the United
States of America, (ii) any certificate of deposit, maturing not more than one
year after the date of acquisition, issued by, or time deposit of, a commercial
banking institution that is a member of the Federal Reserve System and that has
combined capital and surplus and undivided profits of not less than $500
million, whose debt has a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or any successor rating
agency or "A-1" (or higher) according to S&P or any successor rating agency,
(iii) commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate or Subsidiary of
the Company) organized and existing under the laws of 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 Moody's or "A-1" (or higher) according to S&P
and (iv) any money market deposit accounts issued or offered by a domestic
commercial bank having capital and surplus in excess of $500 million; provided
that the short term debt of such commercial bank has a rating, at the time of
Investment, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, or any successor statute.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an
20
Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary if all of the following conditions
apply: (a) neither the Company nor any of its Restricted Subsidiaries provides
credit support for Indebtedness of such Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness), except Restricted
Payments permitted to be made pursuant to the Section 1009 hereof, to the extent
the provision of such credit support is deemed to be a Restricted Payment at the
time of the provision of such credit support (b) such Subsidiary is not liable,
directly or indirectly, with respect to any Indebtedness other than Unrestricted
Subsidiary Indebtedness, except Restricted Payments permitted to be made
pursuant to Section 1009 hereof, to the extent such Subsidiary's liability,
direct or indirect, is deemed to be a Restricted Payment, (c) any Investment in
such Subsidiary made as a result of designating such Subsidiary an Unrestricted
Subsidiary shall not violate the provisions of Section 1019 of this Indenture
and such Unrestricted Subsidiary is not party to any agreement, contract,
arrangement or understanding at such time with the Company or any Restricted
Subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Company or, in the event such condition is not
satisfied, the value of such agreement, contract, arrangement or understanding
to such Unrestricted Subsidiary shall be deemed a Restricted Payment, and (d)
such Unrestricted Subsidiary does not own any Capital Stock in any Restricted
Subsidiary of the Company which is not simultaneously being designated an
Unrestricted Subsidiary. Any such designation by the Board of Directors of the
Company shall be evidenced to the Trustee by filing with the Trustee a Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions and
shall be deemed a Restricted Payment on the date of designation in an amount
equal to the greater of (1) the net book value of such Investment or (2) the
Fair Market Value of such Investment as determined in good faith by the
Company's Board of Directors. The Board of Directors of the Company may
designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that
(i) immediately after giving effect to such designation, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
the restrictions under Section 1008 of this Indenture and (ii) all Indebtedness
of such Unrestricted Subsidiary shall be deemed to be incurred on the date such
Unrestricted Subsidiary becomes a Restricted Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary
means Indebtedness of such Unrestricted Subsidiary (i) as to which neither the
Company nor any Restricted Subsidiary is directly or indirectly liable (by
virtue of the Company or any such Restricted Subsidiary being the primary
obligor on, guarantor of, or otherwise liable in any respect to, such
Indebtedness), except Guaranteed Debt of the Company or
21
any Restricted Subsidiary to any Affiliate, in which case (unless the incurrence
of such Guaranteed Debt resulted in a Restricted Payment at the time of
incurrence) the Company shall be deemed to have made a Restricted Payment equal
to the principal amount of any such Indebtedness to the extent guaranteed at the
time such Affiliate is designated an Unrestricted Subsidiary and (ii) which,
upon the occurrence of a default with respect thereto, does not result in, or
permit any holder of any Indebtedness of the Company or any Restricted
Subsidiary to declare, a default on such Indebtedness of the Company or any
Subsidiary or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Voting Stock" means Capital Stock of the class or classes pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of a corporation (irrespective of whether or not at the time Capital
Stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which is owned by the Company or another Wholly Owned
Restricted Subsidiary.
Section 102. Other Definitions.
------------------
Term Defined in Section
---- ------------------
"Act" 105
"Agent Members" 306
"Change of Control Offer" 1016
"Change of Control Purchase Date" 1016
"Change of Control Purchase Notice" 1016
"Change of Control Purchase Price" 1016
"covenant defeasance" 403
"Defaulted Interest" 309
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Excess Proceeds" 1013
"incur" 1008
"Initial Period" 1303
"Initial Securities" Recitals
"Non-payment Default" 1303
"Offer" 1013
"Offer Date" 1013
22
"Offered Price" 1013
"Pari Passu Debt Xxxxxx" 0000
"Pari Passu Offer" 1013
"Payment Blockage Period" 1303
"Payment Default" 1303
"Permitted Guarantor Junior Securities" 1417
"Permitted Indebtedness" 1008
"Permitted Junior Securities" 1302
"Permitted Payment" 1009
"Physical Securities" 306
"Private Placement Legend" 202
"Purchase Money Security Agreement" 101
"refinancing" 1009
"Registration Default" 202
"Required Filing Date" 1020
"Restricted Payments" 1009
"Rule 144A" 201
"Securities" Recitals
"Security Xxxxxx" 0000
"Security Register" 305
"Security Registrar" 305
"Series A Securities" Recitals
"Series B Securities" Recitals
"Special Payment Date" 309
"Surviving Entity" 801
"Surviving Guarantor Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company and any Guarantor
(if applicable) and any other obligor on the Securities (if applicable) shall
furnish to the Trustee an Officers' Certificate in a 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 in a form and substance reasonably
acceptable to the Trustee 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
certificates or opinions is specifically required by any provision of this
Indenture relating
23
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
individual or firm signing such opinion has read such covenant or condition and
the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of 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
(d) a statement as to whether, in the opinion of each such individual
or such firm, such condition or covenant has been complied with.
Section 104. 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 Company, any Guarantor
or other obligor on the Securities 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 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 Company, any Guarantor or other obligor on the Securities stating that
the information with respect to such factual matters is in the possession of the
Company, any Guarantor or other obligor on the Securities, unless such officer
or counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or
24
representations with respect to such matters are erroneous. Opinions of Counsel
required to be delivered to the Trustee may have qualifications customary for
opinions of the type required and counsel delivering such Opinions of Counsel
may rely on certificates of the Company or government or other officials
customary for opinions of the type required, including certificates certifying
as to matters of fact, including that various financial covenants have been
complied with.
Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor on the Securities may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of, or representations by, an
accountant or firm of accountants in the employ of the Company, unless such
officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate or opinion may be based are erroneous. Any
certificate or opinion of any independent firm of public accountants filed with
the Trustee shall contain a statement that such firm is independent with respect
to the Company.
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 105. 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 an agent 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 Company. 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 Company, if made in the
manner provided in this Section 105.
(b) The ownership of Securities shall be proved by the Security
Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act by the Holder of any Security shall bind every future Holder
of the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be
25
done by the Trustee, any Paying Agent or the Company, any Guarantor or any other
obligor of the Securities in reliance thereon, whether or not notation of such
action is made upon such Security.
(d) 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 his 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 which the Trustee deems sufficient.
(e) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of such Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding Trust
Indenture Act Section 316(c), any such record date shall be the record date
specified in or pursuant to such Board Resolution, which shall be a date not
more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than the date such first 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 or their designated proxies shall be deemed to be Holders for
purposes of determining whether Holders of the requisite proportion of
Securities then Outstanding have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act
(or their duly designated proxies), and for this purpose the Securities then
Outstanding shall be computed as of such record date; provided that no such
request, demand, authorization, direction, notice, consent, waiver or other Act
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 such record date.
Section 106. Notices, etc., to the Trustee, the Company and any Guarantor.
------------------------------------------------------------
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:
26
(a) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor on the Securities shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder if in writing and mailed,
first-class postage prepaid, or delivered by a nationally recognized overnight
courier, to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Department (The Maxim Group, Inc. 9 1/4% Senior Subordinated
Notes due 2007), or at any other address previously furnished in writing to the
Holders, the Company, any Guarantor or any other obligor on the Securities by
the Trustee; or
(b) the Company or any Guarantor by the Trustee or any Holder shall
be sufficient for every purpose (except as provided in Section 501(c)) hereunder
if in writing and mailed, first-class postage prepaid, or delivered by a
nationally recognized overnight courier, to the Company or such Guarantor
addressed to it c/o The Maxim Group, Inc., 000 XxxxXxxx Xxxxx, Xxxxxxxx, XX
00000, Attention: Chief Financial Officer, or at any other address previously
furnished in writing to the Trustee by the Company or such Guarantor.
Any notice required hereunder to be delivered to the lenders under the
Credit Facility shall be sufficient for every purpose hereunder if in writing
and mailed, first-class postage prepaid or delivered by a nationally recognized
courier, to the Administrative Agent at First Union National Bank, 12th floor,
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxxxx,
Facsimile No. (000) 000-0000, with a copy to First Union National Bank, 000
Xxxxx Xxxxxxx Xxxxxx, XX-00, Xxxxxxxxx, XX 00000-0000, Attention: Syndication
Agency Services, Facsimile No: (000) 000-0000.
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or delivered by a
nationally recognized overnight courier, to each Holder affected by such event,
at its address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, 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 when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. 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
27
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 regular mail service or by
reason of any other cause, it shall be impracticable to mail notice of any event
as required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 109. 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 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their respective successors and assigns, whether so
expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities or
Guarantees 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 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or Guarantees, express
or implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent, the Holders, the holders of Senior
Indebtedness and the holders of Senior Guarantor Indebtedness) any benefit or
any legal or equitable right, remedy or claim under this Indenture.
28
Section 113. GOVERNING LAW.
-------------
THIS INDENTURE, THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date, Maturity
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, 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 such Interest Payment Date or Redemption Date, or at
the Maturity or Stated Maturity and no interest shall accrue with respect to
such payment for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case may be, to the next
succeeding Business Day.
Section 115. Independence of Covenants.
-------------------------
All covenants and agreements in this Indenture shall be given
independent effect so that if a particular action or condition is not permitted
by any such covenants, the fact that it would be permitted by an exception to,
or be otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.
Section 116. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
Section 117. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be deemed an original; but all such counterparts shall together
constitute but one and the same instrument.
29
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities, the Guarantees and the Trustee's certificate of
authentication thereon shall be in substantially the forms set forth in this
Article Two, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted hereby 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 the rules of any securities exchange,
any organizational document or governing instrument or applicable law or as may,
consistently herewith, be determined by the officers executing such Securities
and Guarantees, as evidenced by their execution of the Securities and
Guarantees. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Securities
may be listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
Initial Securities offered and sold in reliance on Rule 144A under the
Securities Act ("Rule 144A") shall be issued initially in the form of one or
more Rule 144A Global Securities, substantially in the form set forth in Section
202, Initial Securities offered and sold in reliance on Regulation S under the
Securities Act ("Regulation S") shall be issued initially in the form of one or
more Regulation S Global Securities, substantially in the form set forth in
Section 202, and Series B Securities exchanged for Series A Securities pursuant
to the Exchange Offer shall be issued initially in the form of one or more
Series B Global Securities, substantially in the form set forth in Section 202,
in each case deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities 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.
Section 202. Form of Face of Security.
------------------------
(a) The form of the face of any Series A Securities authenticated and
delivered hereunder shall be substantially as follows:
30
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for a Series B
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, then such Initial Security shall
bear the legend set forth below (the "Private Placement Legend") on the face
thereof:
THE SECURITIES HAVE 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, REGISTRATION AS SET FORTH
BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")) OR (B) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 000X XXXXXX XXX
XXXXXX XXXXXX, 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)
OUTSIDE THE UNITED STATES PURSUANT TO
31
OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE
TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT
TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER
IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. AS
USED HEREIN, THE TERMS "UNITED STATES," "OFFSHORE
TRANSACTION," AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
[Legend if Series A Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY OR A
SUCCESSOR DEPOSITARY. 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR
32
PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
[Until all Senior Indebtedness is paid in full, each of the Series A
Securities at all times shall contain in a conspicuous manner the following
legend]
THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE
MANNER AND TO THE EXTENT SET FORTH IN ARTICLE THIRTEEN OF
THE INDENTURE TO THE OBLIGATIONS (INCLUDING INTEREST) OWED
BY THE COMPANY AND CERTAIN OF ITS SUBSIDIARIES TO ALL SENIOR
INDEBTEDNESS; AND EACH HOLDER HEREOF BY ITS ACCEPTANCE
HEREOF, SHALL BE BOUND BY THE PROVISIONS OF THE
SUBORDINATION AS SET FORTH IN SAID ARTICLE THIRTEEN OF THE
INDENTURE."
33
THE MAXIM GROUP, INC.
__________________
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
CUSIP NO. _____________
No. __________
$_______________________
The Maxim Group, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________ or registered assigns, the principal sum of _______________ United
States dollars [IF THE SERIES A SECURITY IS A GLOBAL SECURITY, THEN INSERT THE
FOLLOWING: , OR SUCH OTHER PRINCIPAL AMOUNT (WHICH, WHEN TAKEN TOGETHER WITH
THE PRINCIPAL AMOUNTS OF ALL OTHER OUTSTANDING SECURITIES, SHALL NOT EXCEED $100
MILLION LESS THE PRINCIPAL AMOUNT OF SECURITIES REDEEMED BY THE COMPANY IN
ACCORDANCE WITH THE INDENTURE) AS MAY BE SET FORTH BY THE SECURITY REGISTRAR ON
APPENDIX A HERETO IN ACCORDANCE WITH THE INDENTURE,] on October 15, 2007, at the
office or agency of the Company referred to below, and to pay interest thereon
from October 16, 1997, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on April 15 and
October 15 in each year, commencing April 15, 1998 at the rate of 9 1/4% per
annum, subject to adjustments as described in the second following paragraph, in
United States dollars, until the principal hereof is paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
The Holder of this Series A Security is entitled to the benefits of
the Registration Rights Agreement among the Company, the Guarantors and the
Initial Purchasers, dated October 16, 1997, pursuant to which, subject to the
terms and conditions thereof, the Company and the Guarantors are obligated to
consummate the Exchange Offer pursuant to which the Holder of this Security (and
the related Guarantees) shall have the right to exchange this Security (and the
related Guarantees) for 9 1/4% Senior Subordinated Notes due 2007, Series B and
related guarantees (herein called the "Series B Securities") in like principal
amount as provided therein. The Series A Securities and the Series B Securities
are together (including related Guarantees) referred to as the "Securities."
The Series A Securities rank pari passu in right of payment with the Series B
Securities.
In the event that either (a) the Exchange Offer Registration Statement
is not filed with the Commission on or prior to the 30th calendar day following
the date of original issue of the Series A Securities, (b) the Exchange Offer
Registration Statement
34
has not been declared effective on or prior to the 90th calendar day following
the date of original issue of the Series A Securities or (c) the Exchange Offer
is not consummated on or prior to the 120th calendar day following the date of
original issue of the Series A Securities or a Shelf Registration Statement is
not declared effective on or prior to the 120th calendar day following the date
of original issue of the Series A Securities (each such event referred to in
clauses (a) through (c) above, a "Registration Default"), the interest rate
borne by the Series A Securities shall be increased ("Additional Interest") by
one-quarter of one percent per annum upon the occurrence of each Registration
Default, which rate (as increased as aforesaid) will increase by one quarter of
one percent each 90-day period that such Additional Interest continues to accrue
under any such circumstance, provided that the maximum aggregate increase in the
interest rate will in no event exceed one percent (1%) per annum. Following the
cure of all Registration Defaults the accrual of Additional Interest will cease
and the interest rate will revert to the original rate; provided, however, that,
if after any such reduction in interest rate, a different event specified in
clause (a), (b) or (c) above occurs, the interest rate shall again be increased
pursuant to the foregoing provisions.
If the Shelf Registration Statement is unusable by the Holders for any
reason, and the aggregate number of days in any consecutive twelve-month period
for which the Shelf Registration Statement shall not be usable exceeds 30 days
in the aggregate, then the interest rate borne by the Securities will be
increased by 0.25% per annum of the principal amount of the Securities for the
first 90-day period (or portion thereof) beginning on the 31st such date that
such Shelf Registration Statement ceases to be usable, which rate shall be
increased by an additional 0.25% per annum of the principal amount of the
Securities at the beginning of each subsequent 90-day period, provided that the
maximum aggregate increase in the interest rate will in no event exceed one
percent (1%) per annum. Upon the Shelf Registration Statement once again
becoming usable, the interest rate borne by the Securities will be reduced to
the original interest rate if the Company is otherwise in compliance with this
Agreement at such time. Additional Interest shall be computed based on the
actual number of days elapsed in each 90-day period in which the Shelf
Registration Statement is unusable.
The Issuers shall notify the Trustee within three Business Days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid by depositing with the Trustee, in trust, for the benefit of the Holders of
Registrable Securities, on or before the applicable semiannual Interest Payment
Date, immediately available funds in sums sufficient to pay the Additional
Interest then due. The Additional Interest due shall be payable on each
Interest Payment Date to the record Holder of Securities entitled to receive the
interest payment to be paid on such date as set forth in the Indenture. Each
obligation to pay Additional Interest shall be deemed to accrue from and
including the day following the applicable Event Date.
35
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Security) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Series A Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may either be paid to the Person in whose name this Security (or any
Predecessor Security) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, this
Security, and exchange or transfer of the Security, will be made at the office
or agency of the Company in The City of New York maintained for that purpose, or
at such other office or agency as may be maintained for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Payment of interest will
be made (i) in respect of Securities held by the Depositary or its nominee, in
same day funds on or prior to the respective Interest Payment Dates and (ii) in
respect of Securities held of record by Holders other than the Depositary or its
nominee, in same day funds at the office of the Trustee in New York, New York or
at such other office or agency of the Company as it shall maintain for that
purpose pursuant to Section 1002; provided, however, that, at the option of the
Company, interest on any Security held of record by Holders other than the
Depositary or its nominee may be paid by mailing checks to the addresses of the
Holders thereof as such address appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor of the Trustee for the benefit of the Holders. Reference is hereby made
to Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of
the Guarantors.
36
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated: THE MAXIM GROUP, INC.
By:___________________________
Title:________________________
Attest:
____________________________
Authorized Officer
37
[IF THE SERIES A SECURITY IS A GLOBAL SECURITY,
THEN INSERT THE FOLLOWING AS APPENDIX A THERETO]
APPENDIX A
----------
EXCHANGES FOR GLOBAL NOTES OR PHYSICAL NOTES
--------------------------------------------
The following increases or decreases in the principal amount of this
Global Note in accordance with the Indenture have been made:
Increase (decrease) in the New principal amount of Notation made by or on
principal amount of this this Global Note following behalf of the Security
Date Made Global Note such increase or decrease Registrar
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38
(b) The form of the face of any Series B Securities authenticated and
delivered hereunder shall be substantially as follows:
To the extent that any Series B Security is a Private Exchange
Security (as defined in the Registration Rights Agreement) and until such Series
B Security is freely tradable without registration under the Securities Act,
then such Series B Security shall bear the legend set forth below (the "Private
Placement Legend") on the face thereof;
THE SECURITIES HAVE 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, REGISTRATION AS SET FORTH BELOW.
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A")) OR (B) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION,
(2) AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY
OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 000X XXXXXX
XXX XXXXXX XXXXXX, 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
39
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE
UNITED STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN
AN OFFSHORE TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D) OR
(E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE
OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE. AS USED HEREIN, THE TERMS "UNITED STATES," "OFFSHORE
TRANSACTION," AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS
GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
[Legend if Series B Security is a Global Security]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR
DEPOSITORY. 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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION
40
("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
[Until all Senior Indebtedness is paid in full, each of the Series B
Securities at all times shall contain in a conspicuous manner the following
legend]
THE OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER
AND TO THE EXTENT SET FORTH IN ARTICLE THIRTEEN OF THE INDENTURE
TO THE OBLIGATIONS (INCLUDING INTEREST) OWED BY THE COMPANY AND
CERTAIN OF ITS SUBSIDIARIES TO ALL SENIOR INDEBTEDNESS; AND EACH
HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, SHALL BE BOUND BY THE
PROVISIONS OF THE SUBORDINATION AS SET FORTH IN SAID ARTICLE
THIRTEEN OF THE INDENTURE.
41
THE MAXIM GROUP, INC.
__________________
9 1/4% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
CUSIP NO. ______________
______________
No. __________
$_______________________
The Maxim Group, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________ or registered assigns, the principal sum of _______________ United
States dollars [IF THE SERIES B SECURITY IS A GLOBAL SECURITY, THEN INSERT THE
FOLLOWING: , OR SUCH OTHER PRINCIPAL AMOUNT (WHICH, WHEN TAKEN TOGETHER WITH
THE PRINCIPAL AMOUNTS OF ALL OTHER OUTSTANDING SECURITIES, SHALL NOT EXCEED $100
MILLION LESS THE PRINCIPAL AMOUNT OF SECURITIES REDEEMED BY THE COMPANY IN
ACCORDANCE WITH THE INDENTURE) AS MAY BE SET FORTH BY THE SECURITY REGISTRAR ON
APPENDIX A HERETO IN ACCORDANCE WITH THE INDENTURE,] on October 15, 2007, at the
office or agency of the Company referred to below, and to pay interest thereon
from October 16, 1997, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on April 15 and
October 15 in each year, commencing April 15, 1998 at the rate of 9 1/4% per
annum, in United States dollars, until the principal hereof is paid or duly
provided for; provided that to the extent interest has not been paid or duly
provided for with respect to the Series A Security exchanged for this Series B
Security, interest on this Series B Security shall accrue from the most recent
Interest Payment Date to which interest on the Series A Security which was
exchanged for this Series B Security has been paid or duly provided for.
Interest shall be computed on the basis of a 360-day year comprised of twelve
30-day months.
This Series B Security was issued pursuant to the Exchange Offer
pursuant to which the 9 1/4% Senior Subordinated Notes due 2007, Series A, and
related Guarantees (herein called the "Series A Securities") in like principal
amount were exchanged for the Series B Securities and related Guarantees. The
Series B Securities rank pari passu in right of payment with the Series A
Securities.
In addition, for any period in which the Series A Security exchanged
for this Series B Security was outstanding, in the event that either (a) the
Exchange Offer Registration Statement is not filed with the Commission on or
prior to the 30th calendar day following the date of original issue of the
Series A Security, (b) the Exchange Offer
42
Registration Statement has not been declared effective on or prior to the 90th
calendar day following the date of original issue of the Series A Security or
(c) the Exchange Offer is not consummated on or prior to the 120th calendar day
following the date of original issue of the Series A Security or a Shelf
Registration Statement is not declared effective on or prior to the 120th
calendar day following the date of original issue of the Series A Security (each
such event referred to in clauses (a) through (c) above, a "Registration
Default"), the interest rate borne by the Series A Securities shall be increased
by one-quarter of one percent per annum upon the occurrence of each Registration
Default, which rate (as increased as aforesaid) will increase by one quarter of
one percent each 90-day period that such additional interest continues to accrue
under any such circumstance, provided that the maximum aggregate increase in the
interest rate will in no event exceed one percent (1%) per annum. Following the
cure of all Registration Defaults the accrual of additional interest will cease
and the interest rate will revert to the original rate; provided that, to the
extent interest at such increased interest rate has been paid or duly provided
for with respect to the Series A Security, interest at such increased interest
rate, if any, on this Series B Security shall accrue from the most recent
Interest Payment Date to which such interest on the Series A Security has been
paid or duly provided for; provided, however, that, if after any such reduction
in interest rate, a different event specified in clause (a), (b) or (c) above
occurs, the interest rate shall again be increased pursuant to the foregoing
provisions.
If the Shelf Registration Statement is unusable by the Holders for any
reason, and the aggregate number of days in any consecutive twelve-month period
for which the Shelf Registration Statement shall not be usable exceeds 30 days
in the aggregate, then the interest rate borne by the Securities will be
increased by 0.25% per annum of the principal amount of the Securities for the
first 90-day period (or portion thereof) beginning on the 31st such date that
such Shelf Registration Statement ceases to be usable, which rate shall be
increased by an additional 0.25% per annum of the principal amount of the
Securities at the beginning of each subsequent 90-day period, provided that the
maximum aggregate increase in the interest rate will in no event exceed one
percent (1%) per annum. Upon the Shelf Registration Statement once again
becoming usable, the interest rate borne by the Securities will be reduced to
the original interest rate if the Company is otherwise in compliance with this
Agreement at such time. Additional Interest shall be computed based on the
actual number of days elapsed in each 90-day period in which the Shelf
Registration Statement is unusable.
The Issuers shall notify the Trustee within three Business Days after
each and every date on which an event occurs in respect of which Additional
Interest is required to be paid (an "Event Date"). Additional Interest shall be
paid by depositing with the Trustee, in trust, for the benefit of the Holders of
Registrable Securities, on or before the applicable semiannual Interest Payment
Date, immediately available funds in sums sufficient to pay the Additional
Interest then due. The Additional Interest due shall
43
be payable on each Interest Payment Date to the record Holder of Securities
entitled to receive the interest payment to be paid on such date as set forth in
the Indenture. Each obligation to pay Additional Interest shall be deemed to
accrue from and including the day following the applicable Event Date.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Security) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the April 1 or October 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid, or duly provided for, and interest on such defaulted interest
at the interest rate borne by the Series B Securities, to the extent lawful,
shall forthwith cease to be payable to the Holder on such Regular Record Date,
and may either be paid to the Person in whose name this Security (or any
Predecessor Security) is registered at the close of business on a Special Record
Date for the payment of such defaulted interest to be fixed by the Trustee,
notice whereof shall be given to Holders of Securities not less than 10 days
prior to such Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in this Indenture.
Payment of the principal of, premium, if any, and interest on, this
Security, and exchange or transfer of the Security, will be made at the office
or agency of the Company in The City of New York maintained for such purpose, or
at such other office or agency as may be maintained for such purpose, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Payment of interest will
be made (i) in respect of Securities held by the Depositary or its nominee, in
same day funds on or prior to the respective Interest Payment Dates and (ii) in
respect of Securities held of record by Holders other than the Depositary or its
nominee, in same day funds at the office of the Trustee in New York, New York or
at such other office or agency of the Company as it shall maintain for that
purpose pursuant to Section 1002, provided, however, that, at the option of the
Company, interest on any Security held of record by Holders other than the
Depositary or its nominee may be paid by mailing checks to the addresses of the
Holders thereof as such addresses appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Security is entitled to the benefits of Guarantees by each of the
Guarantors of the punctual payment when due of the Indenture Obligations made in
favor
44
of the Trustee for the benefit of the Holders. Reference is hereby made to
Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of
the Guarantors.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: THE MAXIM GROUP, INC.
By:___________________________________
Title:________________________________
Attest:
____________________________
Authorized Officer
45
[IF THE SERIES B SECURITY IS A GLOBAL SECURITY,
THEN INSERT THE FOLLOWING AS APPENDIX A THERETO]
APPENDIX A
----------
EXCHANGES FOR GLOBAL NOTES OR PHYSICAL NOTES
--------------------------------------------
The following increases or decreases in the principal amount of this
Global Note in accordance with the Indenture have been made:
Increase (decrease) in the New principal amount of Notation made by or on
principal amount of this this Global Note following behalf of the Security
Date Made Global Note such increase or decrease Registrar
------------------------ ---------------------------- --------------------------- --------------------------
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------------------------ ---------------------------- --------------------------- --------------------------
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46
Section 203. Form of Reverse of Securities.
-----------------------------
(a) The form of the reverse of the Series A Securities shall
be substantially as follows:
THE MAXIM GROUP, INC.
9 1/4% Senior Subordinated Note due 2007, Series A
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9 1/4% Senior Subordinated Notes due 2007, Series A
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $100,000,000,
issued under and subject to the terms of an indenture (herein called the
"Indenture") dated as of October 16, 1997, among the Company, the Guarantors and
State Street Bank and Trust Company, as trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities and (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Securities are subject to redemption at any time on or after
October 15, 2002, at the option of the Company, in whole or in part, on not less
than 30 nor more than 60 days' prior notice to the Holders by first-class mail,
in amounts of $1,000 or an integral multiple thereof, at the following
redemption prices (expressed as percentages of the principal amount), if
redeemed during the 12-month period beginning October 15 of the years indicated
below:
Redemption
Year Price
---- -----------
2002.......................... 104.625%
2003.......................... 102.313%
2004.......................... 101.156%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to but not including the Redemption Date
(subject to the rights of Holders of record on relevant Regular Record Dates or
Special Record Dates to receive interest due on an Interest Payment Date).
47
At any time prior to October 15, 2000, the Company may, at its option,
use the net proceeds of one or more Public Equity Offerings to redeem up to an
aggregate of 30% of the aggregate principal amount of Securities originally
issued under the Indenture at a redemption price equal to 109.25% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the Redemption Date; provided that at least $70 million of the principal
amount of Securities remains outstanding immediately after the occurrence of
such redemption. In order to effect the foregoing redemption, the Company must
mail a notice of redemption no later than 60 days after the closing of the
related Public Equity Offering and must consummate such redemption within 90
days of the closing of the Public Equity Offering.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities or portions thereof to be redeemed pro rata or by
lot.
Upon the occurrence of a Change of Control, each Holder may require
the Company to purchase such Holder's Securities in whole or in part in integral
multiples of $1,000, at a purchase price in cash in an amount equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay Senior Indebtedness or invested in capital expenditures, properties or
other assets or inventories that replace the properties and assets that were the
subject of the Asset Sale or which will be used in the business of the Company
or its Subsidiaries existing on the date of the Indenture or in businesses
reasonably related thereto, exceeds a specified amount the Company will be
required to apply such proceeds to the repayment of the Securities and certain
Indebtedness ranking pari passu in right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
48
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Securities and the Guarantees at any time by the Company and the Trustee
with the consent of the Holders of a specified percentage in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Securities and the
Guarantees and certain past Defaults under the Indenture and the Securities and
the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
The Series A Securities are, to the extent and manner provided in
Article Thirteen of the Indenture, subordinated and subject in right of payment
to the prior payment in full of all Senior Indebtedness.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
such other obligor is obligated to make payments in respect of the Securities),
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on, this Security at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
If this Series A Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose in The City of New York or at such
other office or agency of the Company as may be maintained for such purpose,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or its attorney duly authorized in writing, and thereupon
49
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
If this Series A Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the Holder,
provided it is a Qualified Institutional Buyer or a Non-U.S. Person, may
exchange this Series A Security for a Book-Entry Security by instructing the
Trustee (by completing the Transferee Certificate in the form in Appendix I) to
arrange for such Series A Security to be represented by a beneficial interest in
a Rule 144A Global Security or a Regulation S Global Security, as the case may
be, in accordance with the customary procedures of the Depository, unless the
Company has elected not to issue a Rule 144A Global Security or a Regulation S
Global Security, as the case may be.
If this Series A Security is a Rule 144A Global Security, it is
exchangeable for a Series A Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in the Rule 144A
Global Securities or the Regulation S Global Securities if (x) the Depositary
notifies the Company that it is unwilling or unable to continue as depository
for such Global Security and a successor depositary is not appointed by the
Company within 90 days or (y) there shall have occurred and be continuing an
Event of Default and the Security Registrar has received a request from the
Depositary. Upon any such issuance, the Trustee is required to register such
certificated Series A Securities in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof). All such
certificated Series A Securities would be required to include the Private
Placement Legend.
Series A Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series A Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
At any time when the Company is not subject to Sections 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Series A Security,
the Company will promptly furnish or cause to be furnished such information as
is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) to such Holder or to a prospective purchaser of
such Series A Security who such Holder informs the Company is reasonably
believed to be a "Qualified Institutional Buyer" within the meaning of Rule 144A
under the Securities Act, as the case may be, in order to permit compliance by
such Holder with Rule 144A under the Securities Act.
50
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, any Guarantor, the Trustee and any agent of the Company,
any Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix I hereto, will be
attached to the Series A Security.]
(b) The form of the reverse of the Series B Securities shall be
substantially as follows:
THE MAXIM GROUP, INC.
9 1/4% Senior Subordinated Note due 2007, Series B
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9 1/4% Senior Subordinated Notes due 2007, Series B
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $100,000,000,
issued under and subject to the terms of an indenture (herein called the
"Indenture") dated as of October 16, 1997, among the Company, the Guarantors and
State Street Bank and Trust Company, as trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)
the entire Indebtedness on the Securities and (b) certain restrictive covenants
and related
51
Defaults and Events of Default, in each case upon compliance with certain
conditions set forth therein.
The Securities are subject to redemption at any time on or after
October 15, 2002, at the option of the Company, in whole or in part, on not less
than 30 nor more than 60 days' prior notice to the Holders by first-class mail,
in amounts of $1,000 or an integral multiple thereof, at the following
redemption prices (expressed as percentages of the principal amount), if
redeemed during the 12-month period beginning October 15 of the years indicated
below:
Redemption
Year Price
---- -----------
2002........................ 104.625%
2003........................ 102.313%
2004........................ 101.156%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to but not including the Redemption Date
(subject to the rights of Holders of record on relevant Regular Record Dates or
Special Record Dates to receive interest due on an Interest Payment Date).
At any time prior to October 15, 2000, the Company may, at its option,
use the net proceeds of one or more Public Equity Offerings to redeem up to an
aggregate of 30% of the aggregate principal amount of Securities originally
issued under the Indenture at a redemption price equal to 109.25% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the Redemption Date; provided that at least $70 million of the principal
amount of Securities remains outstanding immediately after the occurrence of
such redemption. In order to effect the foregoing redemption, the Company must
mail a notice of redemption no later than 60 days after the closing of the
related Public Equity Offering and must consummate such redemption within 90
days of the closing of the Public Equity Offering.
If less than all of the Securities are to be redeemed, the Trustee
shall select the Securities or portions thereof to be redeemed pro rata or by
lot.
Upon the occurrence of a Change of Control, each Holder may require
the Company to purchase such Holder's Securities in whole or in part in integral
multiples of $1,000, at a purchase price in cash in an amount equal to 101% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase, pursuant to a Change of Control Offer in accordance with the
procedures set forth in the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company from any Asset Sale, which proceeds are not used to
repay Senior
52
Indebtedness or invested in capital expenditures, properties or other assets or
inventories that replace the properties and assets that were the subject of the
Asset Sale or which will be used in the business of the Company or its
Subsidiaries existing on the date of the Indenture or in businesses reasonably
related thereto, exceeds a specified amount the Company will be required to
apply such proceeds to the repayment of the Securities and certain Indebtedness
ranking pari passu in right of payment to the Securities.
In the case of any redemption or repurchase of Securities in
accordance with the Indenture, interest installments whose Stated Maturity is on
or prior to the Redemption Date will be payable to the Holders of such
Securities of record as of the close of business on the relevant Regular Record
Date or Special Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
Redemption Date.
In the event of redemption or repurchase of this Security in
accordance with the Indenture in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Securities and the Guarantees at any time by the Company and the Trustee
with the consent of the Holders of a specified percentage in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Securities and the
Guarantees and certain past Defaults under the Indenture and the Securities and
the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
53
The Series B Securities are, to the extent and manner provided in
Article Thirteen of the Indenture, subordinated and subject in right of payment
to the prior payment in full of all Senior Indebtedness.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor on the Securities (in the event such Guarantor or
such other obligor is obligated to make payments in respect of the Securities),
which is absolute and unconditional, to pay the principal of, and premium, if
any, and interest on, this Security at the times, place, and rate, and in the
coin or currency, herein prescribed, subject to the subordination provisions of
the Indenture.
If this Series B Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Series B Security is registrable on the Security Register of the
Company, upon surrender of this Series B Security for registration of transfer
at the office or agency of the Company maintained for such purpose in The City
of New York or at such other office or agency of the Company as may be
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or its attorney duly authorized in
writing, and thereupon one or more new Series B Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Series B Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the Holder
may exchange this Series B Security for a Book-Entry Security by instructing the
Trustee to arrange for such Series B Security to be represented by a beneficial
interest in a Series B Global Security in accordance with the customary
procedures of the Depository, unless the Company has elected not to issue a
Series B Global Security.
If this Series B Security is a Series B Global Security, it is
exchangeable for a Series B Security in certificated form as provided in the
Indenture and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in the Series B
Global Security if (x) the Depositary notifies the Company that it is unwilling
or unable to continue as depository for the Series B Global Security and a
successor depositary is not appointed by the Company within 90 days or (y) there
shall have occurred and be continuing an Event of Default and the Security
Registrar has received a request from the Depositary. Upon any such issuance,
the Trustee is required to register such certificated Series B Securities in the
name of, and cause the same to be delivered to, such Person or Persons (or the
nominee of any thereof).
54
Series B Securities in certificated form are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Series B Securities are exchangeable for a
like aggregate principal amount of Securities of a differing authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax, assessment or other governmental charge payable in connection
therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, any Guarantor, the Trustee and any agent of the Company,
any Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any such agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
[The Transferee Certificate, in the form of Appendix II hereto, will
be attached to the Series B Security.]
Section 204. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificate of authentication shall be included on the
form of the face of the Securities substantially in the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
[Series A Securities]
This is one of the 9 1/4% Senior Subordinated Notes due 2007, Series A
referred to in the within-mentioned Indenture.
00
Xxxxx Xxxxxx Bank and Trust Company,
as Trustee
By:______________________________________
Authorized Signer
[Series B Securities]
This is one of the 9 1/4% Senior Subordinated Notes due 2007, Series B
referred to in the within-mentioned Indenture.
State Street Bank and Trust Company,
as Trustee
By:______________________________________
Authorized Signer
Section 205. Form of Guarantee of Each of the Guarantors.
-------------------------------------------
The form of Guarantee shall be set forth on the Securities
substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby absolutely,
unconditionally and irrevocably guarantees, jointly and severally, to the
holder of this Security the payment of principal of, premium, if any, and
interest on this Security upon which these Guarantees are endorsed in the
amounts and at the time when due and payable whether by declaration thereof, or
otherwise, and interest on the overdue principal and interest, if any, of this
Security, if lawful, and the payment or performance of all other obligations of
the Company under the Indenture or the Securities, to the holder of this
Security and the Trustee, all in accordance with and subject to the terms and
limitations of this Security, Article Thirteen and Article Fourteen of the
Indenture. These Guarantees will not become effective until the Trustee duly
executes the certificate of authentication on this Security. This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to conflict of law
56
principles thereof. The Indebtedness evidenced by these Guarantees are, to the
extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of all Guarantor Senior
Indebtedness (as defined in the Indenture), whether outstanding on the date of
the Indenture or thereafter, and the Guarantees are issued subject to such
provisions.
Dated:
IMAGE INDUSTRIES, INC.
By:_________________________________
Name:
Title:
Attest:_________________________
Name:
Title:
00
XXXXXXXX & XXXXXXX INTERIORS, INC.
KINNAIRD & XXXXXXX DRAPERY CO., INC.
FIRST QUALITY, INC.
XXXXX XXXXXXXX INTERIORS &
ASSOCIATES, INC.
BAY AREA CARPETS, INC.
CARPET WORLD, INC.
RNA ENTERPRISES, INC.
XXXXXX CARPETS & FLOORS, INC.
RUGS N REMNANTS, INC.
CARPET GALLERY, INC. (GEORGIA)
LOSANTVILLE CARPET OUTLET, INC.
AMERICAN CARPETS & INTERIORS, INC.
CARPET COUNTRY, INC.
CARPETMAX OF NEW MEXICO, INC.
CARPETMAX ALABAMA CONTRACT, INC.
By:_____________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
Attest:____________________
Name:
Title:
MAXIM RETAIL GROUP, INC.
By:_____________________________________
Name: Xxxx Xxxx
Title: President
Attest:____________________
Name:
Title:
58
INVESTOR MANAGEMENT, INC.
TRI-R OF ORLANDO, INC.
CARPETMAX OF PALM BEACH, INC.
CREDITMAX CORP.
CARPETMAX OF CHARLOTTE, INC.
CLOUD CARPETS, INC.
MAXIM EQUIPMENT LEASING
COMPANY, INC.
By:_____________________________________
Name: X.X. Xxxxxx
Title: President
Attest:____________________
Name:
Title:
GCO, INC.
GCO CARPET OUTLET, INC.
XXXXXX & XXXXXXX CARPETMAX
OF TENNESSEE, INC.
By:_____________________________________
Name: X.X. Xxxxxx
Title: Chief Executive Officer
Attest:____________________
Name:
Title:
CARPETMAX, L.P.
By: The Maxim Group, Inc., as General Partner
By:_____________________________________
Name: X.X. Xxxxxx
Title: President and Chief Executive
Officer
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Section 206. Form of Option of Holder to Elect Purchase.
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The form of Option of Holder to Elect Purchase Form shall be set forth
on the Securities substantially as follows:
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 1013 or Section 1016, as applicable, of the Indenture, check the Box:
[ ].
If you wish to have a portion of this Security (which has an original
principal amount of $1,000 or an integral multiple thereof) purchased by the
Company pursuant to Section 1013 or Section 1016 as applicable, of the
Indenture, state the amount (in original principal amount):
$ _______________.
Date: ___________________ Your Signature: _____________________
Taxpayer Identification No.: ____________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee: __________________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
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ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
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The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $100,000,000 in
principal amount of Series A Securities and $100,000,000 in principal amount of
Series B Securities, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1013, 1016 or 1108.
The Series A Securities shall be known and designated as the "9 1/4%
Series A Senior Subordinated Notes due 2007, Series A" of the Company. The
Stated Maturity of the Series A Securities shall be October 15, 2007, and the
Series A Securities shall each bear interest at the rate of 9 1/4% per annum, as
such interest rate may be adjusted as set forth in the Series A Security, from
October 16, 1997, or from the most recent Interest Payment Date to which
interest has been paid, as the case may be, payable semiannually on April 15 and
October 15 in each year commencing April 15, 1998, 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.
The Series B Securities shall be known and designated as the "9 1/4%
Series B Senior Subordinated Notes due 2007, Series B" of the Company. The
Stated Maturity of the Series B Securities shall be October 15, 2007, and the
Series B Securities shall each bear interest at the rate of 9 1/4% per annum, as
such interest rate may be adjusted as set forth in the Series B Security, from
their issuance date or from the most recent Interest Payment Date to which
interest has been paid, as the case may be, payable semiannually on April 15 and
October 15, in each year commencing April 15, 1998, 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.
The principal of and premium, if any, and interest on the Securities
shall be payable (i) in respect of Securities held of record by the Depositary
or its nominee in same day funds on or prior to the respective payment dates and
(ii) in respect of Securities held of record by Holders other than the
Depositary or its nominee in same day funds at the office or agency of the
Company maintained for such purpose pursuant to Section 1002; provided, however,
that at the option of the Company payment of interest to Holders of record other
than the Depositary may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register. The
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Securities will be exchangeable and transferable at an office or agency of the
Company in The City of New York maintained for such purposes.
For all purposes hereunder, the Series A Securities and the Series B
Securities will be treated as one class and are together referred to as the
"Securities." The Series A Securities rank pari passu in right of payment with
the Series B Securities.
The Securities shall be subject to repurchase by the Company pursuant
to an Offer as provided in Section 1013.
Holders shall have the right to require the Company to purchase their
Securities, in whole or in part, in the event of a Change of Control pursuant to
Section 1016.
The Securities shall be redeemable as provided in Article Eleven and
in the Securities.
The Indebtedness evidenced by the Securities shall be subordinated in
right of payment to Senior Indebtedness as provided in Article Thirteen.
At the election of the Company, the entire Indebtedness on the
Securities or certain of the Company's obligations and covenants and certain
Events of Default thereunder may be defeased as provided in Article Four.
Section 302. Denominations.
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The Securities shall be issuable only in fully registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
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The Securities shall be executed on behalf of the Company by one of
its Chairman of the Board, its President, its Chief Executive Officer, its Chief
Financial Officer or one of its Vice Presidents attested by its Secretary or one
of its Assistant Secretaries. The signatures of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
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At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee (with Guarantees endorsed thereon) for authentication, together with
a Company Order for the authentication and delivery of such Securities; and the
Trustee in accordance with such Company Order shall authenticate and deliver
such Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security or Guarantee endorsed thereon shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein duly executed by the Trustee by manual signature of
an authorized officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder and is entitled to the benefits of this
Indenture.
In case the Company or any Guarantor, pursuant to Article Eight,
shall, in a single transaction or through a series of related transactions, be
consolidated or merged with or into any other Person or shall sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to any Person, and the successor Person resulting from
such consolidation or surviving such merger, or into which the Company or such
Guarantor shall have been merged, or the successor Person which shall have
participated in the sale, assignment, conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article Eight, any of the Securities authenticated
or delivered prior to such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposition may, from time to time, at the request of
the successor Person, be exchanged for other Securities 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 Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Request of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities 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 Securities, such successor Person, at the
option of the Holders but without expense to them, shall provide for the
exchange of all Securities at the time Outstanding for Securities authenticated
and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities on behalf of the Trustee. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Securities whenever the
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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 Security Registrar or Paying Agent to deal with the Company
and its Affiliates.
Section 304. Temporary Securities.
--------------------
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities. Every such temporary Security shall be executed by
the Company and shall be authenticated and delivered by the Trustee upon the
same conditions and in substantially the same manner, and with the same effect,
as the definitive Security or Securities in lieu of which it is issued.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause the Trustee to keep, so long as it is the
Security Registrar, at the Corporate Trust Office of the Trustee, or such other
office as the Trustee may designate, a register (the register maintained in such
office or in any other office or agency designated pursuant to Section 1002
being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as the Security Registrar may prescribe, the
Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee shall initially be the "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided. The Company may appoint one or more co-Security Registrars. At all
reasonable times the Security Register shall be open for inspection by the
Company.
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Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denomination or denominations, of a like aggregate
principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of
such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
the Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in a Security shall be required to be reflected in a book
entry.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
Securities of the same series which the Holder making the exchange is entitled
to receive; provided that no exchange of Series A Securities for Series B
Securities shall occur until an Exchange Offer Registration Statement shall have
been declared effective by the Commission and that the Series A Securities
exchanged for the Series B Securities shall be canceled.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
Indebtedness, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer,
or for exchange, repurchase or redemption, shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer, exchange or redemption of Securities, except in certain circumstances
for any tax, assessment or other governmental charge that may be imposed in
connection therewith, other than exchanges pursuant to Sections 303, 304, 305,
308, 906, 1013, 1016 or 1108 not involving any transfer.
Neither the Company nor the Security Registrar shall be required (a)
to issue, register the transfer of or exchange any Security during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of the Securities
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selected for redemption under Section 1104 and ending at the close of business
on the day of such mailing or (b) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of Securities being redeemed in part.
Every Security shall be subject to the restrictions on transfer
provided in the legend required to be set forth on the face of each Security
pursuant to Section 202, and to the restrictions set forth in this Section 305,
and the Holder of each Security, by such Holder's acceptance thereof (or
interest therein), agrees to be bound by such restrictions on transfer.
The restrictions imposed by this Section 305 upon the transferability
of any particular Security shall cease and terminate on (a) the later of October
16, 1999 or two years after the last date on which the Company or any Affiliate
of the Company was the owner of such Security (or any predecessor of such
Security) or (b) (if earlier) if and when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
pursuant to Rule 144 or Rule 904 under the Securities Act (or any successor
provision), unless the Holder thereof is an affiliate of the Company within the
meaning of Rule 144 (or such successor provisions). Any Security as to which
such restrictions on transfer shall have expired in accordance with their terms
or shall have terminated may, upon surrender of such Security for exchange to
the Security Registrar in accordance with the provision of this Section 305
(accompanied, in the event that such restrictions on transfer have terminated
pursuant to Rule 144 or Rule 904 (or any successor provision), by an Opinion of
Counsel satisfactory to the Company and the Trustee, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or Rule 904
(or any such successor provision)), be exchanged for a new Security, of like
tenor and aggregate principal amount, which shall not bear the Private Placement
Legend. The Company shall inform the Trustee of the effective date of any
Registration Statement registering the Securities under the Securities Act no
later than two Business Days after such effective date.
Except as provided in the preceding paragraph, any Security
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, any U.S. Global Security, whether pursuant to this Section
305, Section 304, 308, 906 or 1108 or otherwise, shall also be a U.S. Global
Security and bear the legend specified in Section 202.
Section 306. Book-Entry Provisions for Global Securities.
-------------------------------------------
(a) Each Global Security initially shall (i) be registered in the
name of the Depositary for such Global Security or the nominee of such
Depositary, (ii) be deposited
66
with, or on behalf of, the Depositary or with 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 Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or 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 Security.
(b) Transfers of each Global Security shall be limited to transfers
of such Global Security in whole, but not in part, to the Depositary, its
successors or their respective nominees. Interests of beneficial owners in each
Global Security may be transferred in accordance with the rules and procedures
of the Depositary and the provisions of Section 307. Beneficial owners of
interests in the Rule 144A Global Securities and Series B Global Securities may
obtain Securities in certificated form (the "Physical Securities") in exchange
for their beneficial interests in the Rule 144A Global Securities or Series B
Global Securities, as applicable, upon request in accordance with the
Depositary's and the Security Registrar's procedures. In connection with the
execution, authentication and delivery of such Physical Securities, the Security
Registrar shall reflect on Appendix A to the relevant Global Security a decrease
in the principal amount of such Global Security equal to the principal amount of
such Physical Securities and the Company shall execute and the Trustee shall
authenticate and deliver one or more Physical Securities having an equal
aggregate principal amount. In addition, Physical Securities shall be issued to
all beneficial owners in exchange for their beneficial interests in any Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Security and a successor
Depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Security Registrar
has received a request from the Depositary.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (b) of this Section to
beneficial owners who are required to hold Physical Securities, the Security
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in such Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and amount.
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(d) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (b) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Security an equal aggregate principal amount
of Physical Securities of authorized denominations.
(e) Any Physical Security constituting a "restricted security" within
the meaning of Rule 144(a)(3) under the Securities Act delivered in exchange for
an interest in a Global Security pursuant to subsection (c) or subsection (d) of
this Section shall, except as otherwise provided by Section 307, bear the
Private Placement Legend.
(f) The registered holder of a Global Security 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 Securities.
Section 307. Special Transfer Provisions.
---------------------------
Unless and until (i) an Initial Security is sold under an effective
Registration Statement, or (ii) an Initial Security is exchanged for a Series B
Security in connection with the Exchange Offer, in each case pursuant to the
Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to QIBs. The following provisions shall apply with
-----------------
respect to the registration of any proposed transfer of an Initial Security to a
QIB (excluding Non-U.S. Persons):
(i) the Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private
Placement Legend, if (x) the requested transfer is after the second
anniversary of the Issue Date; provided, however, that neither the
Company nor any Affiliate of the Company has held any beneficial
interest in such Security, or portion thereof, at any time on or prior
to the second anniversary of the Issue Date and such transfer can
otherwise lawfully be made under the Securities Act without
registering such Initial Security thereunder or (y) such transfer is
being made by a proposed transferor who has checked the box provided
for on the form of Initial Security stating, or has otherwise advised
the Company and the Security Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to the
transferee who has signed the certification provided for on the form
of Initial Security stating, or has otherwise advised the Company and
the Security Registrar in writing,
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that it is purchasing the Initial Security for its own account or an
account with respect to which it exercises sole investment discretion
and that it, or the person on whose behalf it is acting with respect
to any such account, is a QIB within the meaning of Rule 144A, 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
Company as it 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) If the proposed transferee is an Agent Member, and the
Initial Security to be transferred consists of Physical Securities
which after transfer are to be evidenced by an interest in the Rule
144A Global Security, upon receipt by the Security Registrar of
instructions given in accordance with the Depositary's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on Appendix A to the Rule 144A Global Security the date and an
increase in the principal amount of the Rule 144A Global Security in
an amount equal to the principal amount of the Physical Securities to
be transferred, and the Trustee shall cancel the Physical Security so
transferred.
(iii) If the proposed transferor is an Agent Member seeking to
transfer an interest in a Global Security, upon receipt by the
Security Registrar of written instructions given in accordance with
the Depositary's and the Security Registrar's procedures, the Security
Registrar shall register the transfer and reflect (A) on Appendix A to
Global Security from which interests are to be transferred the date
and a decrease in the principal amount of the Global Security from
which interests are to be transferred in an amount equal to the
principal amount of the Securities to be transferred and (B) on
Appendix A to the Rule 144A Global Security the date and an increase
in the principal amount of the Rule 144A Global Security in an amount
equal to the principal amount of the Global Security to be
transferred.
(b) Transfers to Non-U.S. Persons. The following provisions shall
-----------------------------
apply with respect to any transfer of an Initial Security to a Non-U.S. Person:
(i) Prior to November 26, 1997, an owner of a beneficial
interest in the Regulation S Global Security may not transfer such
interest to a transferee that is a U.S. Person or for the account or
benefit of a U.S. Person within the meaning of Rule 902(o) under the
Securities Act. During such time, all beneficial interests in the
Regulation S Global Security shall be
69
transferred only through Cedel or Euroclear, either directly if the
transferor and transferee are participants in such system, or
indirectly through organizations that are participants.
(ii) The Security Registrar shall register the transfer of any
Initial Security, whether or not such Security bears the Private
Placement Legend, if (x) the proposed transferee has delivered to the
Security Registrar a certificate substantially in the form of Exhibit
B hereto or (y) the proposed transferor has delivered to the Security
Registrar a certificate substantially in the form of Exhibit C hereto.
(iii) If the proposed transferee is an Agent Member and the
Securities to be transferred consist of Physical Securities which
after transfer are to be evidenced by an interest in the Regulation S
Global Security, upon receipt by the Security Registrar of (x) written
instructions given in accordance with the Depositary's and the
Security Registrar's procedures and (y) the appropriate certificate
required by clause (y) of paragraph (ii) above, together with any
required legal opinions and certifications, the Security Registrar
shall register the transfer and reflect on Appendix A to the
Regulation S Global Security the date and an increase in the principal
amount of the Regulation S Global Security in an amount equal to the
principal amount of Physical Securities to be transferred, and the
Trustee shall cancel the Physical Securities so transferred.
(iv) If the proposed transferor is an Agent Member seeking to
transfer an interest in a Global Security, upon receipt by the
Security Registrar of (x) written instructions given in accordance
with the Depositary's and the Security Registrar's procedures and (y)
the appropriate certificate required by clause (y) of paragraph (ii)
above, together with any required legal opinions and certificates, the
Security Registrar shall register the transfer and reflect (A) on
Appendix A to the Global Security from which interests are to be
transferred the date and a decrease in the principal amount of the
Global Security from which such interests are to be transferred in an
amount equal to the principal amount of the Securities to be
transferred and (B) on Appendix A to the Regulation S Global Security
the date and an increase in the principal amount of the Regulation S
Global Security in an amount equal to the principal amount of the
Global Security to be transferred.
(c) Private Placement Legend. Upon the registration of transfer,
------------------------
exchange or replacement of Securities not bearing the Private Placement Legend,
the Security Registrar shall deliver Securities that do not bear the Private
Placement Legend.
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Upon the registration of transfer, exchange or replacement of Securities bearing
the Private Placement Legend, the Security Registrar shall deliver only
Securities that bear the Private Placement Legend unless there is delivered to
the Security Registrar an Opinion of Counsel reasonably satisfactory to the
Company 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.
(d) General. By its acceptance of any Security bearing the Private
-------
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 306 or this Section
307. The Company 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 Security Registrar.
In the event that Regulation S is amended during the term of this
Indenture to alter the applicable holding period, all reference in this
Indenture to a holding period for Non-U.S. Persons will be deemed to include
such amendment.
Section 308. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (a) any mutilated Security is surrendered to the Trustee, or (b)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, any Guarantor 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 Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company and the
Guarantors shall execute and upon a Company Request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a replacement Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company or any Guarantor in
its discretion may, instead of issuing a replacement Security, pay such
Security.
Upon the issuance of any replacement Securities under this Section,
the Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that may
be imposed in
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relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and any Guarantor, whether or not the
destroyed, lost or stolen Security 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 Securities 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 Securities.
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on the Stated Maturity of such interest shall be paid to the
Person in whose name the Security (or any Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest payment.
Payment of interest will be made (i) in respect of Securities held by the
Depositary or its nominee, in same day funds on or prior to the respective
Interest Payment Dates and (ii) in respect of Securities held of record by
Holders other than the Depositary or its nominee, in same day funds at the
office of the Trustee in New York, New York or at such other office or agency of
the Company as it shall maintain for that purpose pursuant to Section 1002;
provided, however, that, at the option of the Company, interest on any Security
held of record by Holders other than the Depositary or its nominee may be paid
by mailing checks to the addresses of the Holders thereof as such addresses
appear in the Security Register.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on the Stated Maturity of such interest, and interest
on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest"), shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or any relevant
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall
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notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date (not less than 30
days after such notice) of the proposed payment (the "Special Payment
Date"), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
Special Payment Date, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as
in this Subsection provided. Thereupon the Trustee shall fix a 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 date of
the Special 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 Company in writing of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall
cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at its address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date and Special Payment Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities are registered on such Special Record Date and
shall no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after written
notice given by the Company to the Trustee of the proposed payment
pursuant to this Subsection, such payment shall be deemed practicable
by the Trustee.
Subject to the foregoing provisions of this Section 309, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
73
Section 310. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and the Company, or the Trustee on behalf of the Company,
shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided, however, that any such notice shall state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or exchange and
that reliance may be placed only on the other identification numbers printed on
the Securities; and provided further, however, that failure to use CUSIP numbers
in any notice of redemption or exchange shall not affect the validity or
sufficiency of such notice.
Section 311. Persons Deemed Owners.
---------------------
Prior to due presentment of a Security for registration of transfer,
the Company, any Guarantor, the Trustee and any agent of the Company, any
Guarantor or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 309) interest on, such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Section 312. Cancellation.
------------
All Securities surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company or such
Guarantor may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section 312, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be destroyed and certification of
their destruction delivered to the Company, unless by a Company Order received
by the Trustee prior to such destruction, the Company shall direct that the
canceled Securities be returned to it. The Trustee shall provide the Company a
list of all Securities that have been canceled from time to time as requested by
the Company.
Section 313. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
74
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance.
------------------------------------------------------------
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 402 or Section 403 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 402, the Company, each Guarantor and any other obligor upon the
Securities, if any, shall be deemed to have been discharged from its obligations
with respect to the Defeased Securities on the date the conditions set forth in
Section 404 below are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company, each Guarantor and any other obligor
upon the Securities shall be deemed to have paid and discharged the entire
Indebtedness represented by the Defeased Securities, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 405 and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company and upon Company Request, shall execute proper instruments acknowledging
the same), except for the following which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of Defeased
Securities to receive, solely from the trust fund described in Section 404 and
as more fully set forth in such Section, payments in respect of the principal
of, premium, if any, and interest on, such Securities, when such payments are
due, (b) the Company's obligations with respect to such Defeased Securities
under Sections 304, 305, 308, 1002 and 1003, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including, without limitation,
the Trustee's rights under Section 607, and (d) this Article Four. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 402 notwithstanding the prior exercise of its option under Section
403 with respect to the Securities.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Sections
1005 through 1020, inclusive, and the provisions of clause (iii) of Section
801(a), with respect to the Defeased
75
Securities on and after the date the conditions set forth in Section 404 below
are satisfied (hereinafter, "covenant defeasance"), and the Defeased Securities
shall thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company and each Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Sections 501(c), (d) or (g), but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
402 or Section 403 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) United States dollars in
an amount, (b) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms and
with no further reinvestment will provide, not later than one day before the due
date of any payment, money in an amount, or (c) a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants or a nationally recognized investment banking
firm expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee to pay and
discharge, the principal of, premium, if any, and interest on, the Defeased
Securities, on the Stated Maturity of such principal or interest (or on any date
after October 15, 2002 (such date being referred to as the "Defeasance
Redemption Date") if at or prior to electing to exercise either its option
applicable to Section 402 or its option applicable to Section 403, the Company
has delivered to the Trustee an irrevocable notice to redeem all of the
Outstanding Securities on the Defeasance Redemption Date). For this purpose,
"U.S. Government Obligations" means securities that are (i) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of
76
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt;
(2) In the case of an election under Section 402, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date
hereof, there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Independent
Counsel in the United States shall confirm that, the Holders of the Outstanding
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred;
(3) In the case of an election under Section 403, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred;
(4) No Default or Event of Default (other than a Default or Event of
Default under this Indenture resulting from the borrowing of funds to be applied
to such deposit) shall have occurred and be continuing on the date of such
deposit or insofar as Section 501(h) or (i) is concerned, at any time during the
period ending on the 91st day after the date of deposit (it being understood
that this condition shall not be satisfied until the expiration of such period);
(5) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest for purposes of the
Trust Indenture Act with respect to any other securities of the Company or any
Guarantor;
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or any
other material
77
agreement or instrument to which the Company, any Guarantor or any Subsidiary is
a party or by which it is bound;
(7) Such defeasance or covenant defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such trust
shall be registered under such Act or exempt from registration thereunder;
(8) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(9) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Securities or any Guarantee over the other
creditors of the Company or any Guarantor with the intent of defeating,
hindering, delaying or defrauding creditors of the Company, any Guarantor or
others;
(10) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on the
Securities on the date of such deposit or at any time ending on the 91st day
after the date of such deposit; and
(11) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with.
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section shall be in form and substance reasonably
satisfactory to the Trustee and may have qualifications customary for opinions
of the type required and counsel delivering such opinions may rely on
certificates of the Company or government or other officials customary for
opinions of the type required, which certificates shall be limited as to matters
of fact, including that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 404 in respect of the
Defeased Securities
78
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (excluding the Company or any of its
Affiliates acting as Paying Agent), as the Trustee may determine, to the Holders
of such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, but such money need not be segregated
from other funds except to the extent required by law. Money so held in trust
shall not be subject to the provisions of Article Thirteen.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
imposed, assessed or for the account of the Holders of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 404 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 defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Securities and any
Guarantor's obligations under any Guarantee shall be revived and reinstated,
with present and prospective effect, as though no deposit had occurred pursuant
to Section 402 or 403, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such United States dollars or U.S.
Government Obligations in accordance with Section 402 or 403, as the case may
be; provided, however, that if the Company makes any payment to the Trustee or
Paying Agent of principal of, premium, if any, or interest on any Security
following the reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the Securities and the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the United States dollars and U.S. Government
Obligations held by the Trustee or Paying Agent.
79
ARTICLE FIVE
REMEDIES
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):
(a) there shall be a default in the payment of any interest on any
Security when it becomes due and payable, and such default shall continue for a
period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of
any covenant or agreement of the Company or any Guarantor under this Indenture
or any Guarantee (other than a default in the performance, or breach, of a
covenant or agreement which is specifically dealt with in clause (a) or (b) or
in clause (ii), (iii) or (iv) of this clause (c)) and such default or breach
shall continue for a period of 30 days after written notice has been given, by
certified mail, (x) to the Company by the Trustee or (y) to the Company and the
Trustee by the holders of at least 25% in aggregate principal amount of the
Outstanding Securities, which notice shall specify that it is a "notice of
default" and shall demand that such a default be remedied; (ii) there shall be a
default in the performance or breach of the provisions described in Article
Eight herein; (iii) the Company shall have failed to make or consummate an Offer
in accordance with the provisions of Section 1013 herein; or (iv) the Company
shall have failed to make or consummate a Change of Control Offer in accordance
with the provisions of Section 1016 herein;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary then has outstanding Indebtedness in excess of $5,000,000,
individually or in the aggregate, and either (i) such default results from the
failure to pay such Indebtedness at its stated final maturity or (ii) such
default or defaults have resulted in the acceleration of the maturity of such
Indebtedness;
(e) any Guarantee shall for any reason cease to be, or shall for any
reason be asserted in writing by any Guarantor or the Company not to be, in full
force and
80
effect and enforceable in accordance with its terms except to the extent
contemplated by this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $5,000,000, either individually or in the aggregate, shall be
rendered against the Company, any Guarantor or any Restricted Subsidiary or any
of their respective properties and shall not be discharged and either (a) any
creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (b) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $10,000,000 in aggregate
principal amount of Indebtedness of the Company, any Guarantor or any Restricted
Subsidiary after a default under such Indebtedness shall notify the Trustee of
the intended sale or disposition of any assets of the Company, any Guarantor or
any Subsidiary that have been pledged to or for the benefit of such holder or
holders to secure such Indebtedness or shall commence proceedings, or take any
action (including by way of set-off), to retain in satisfaction of such
Indebtedness or to collect on, seize, dispose of or apply in satisfaction of
Indebtedness, assets of the Company, any Guarantor or any Restricted Subsidiary
(including funds on deposit or held pursuant to lock-box and other similar
arrangements);
(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company, any
Guarantor or any Significant Restricted Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or (ii) a decree or order
adjudging the Company, any Guarantor or any Significant Restricted Subsidiary
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company, any Guarantor or any Significant
Restricted Subsidiary under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company, any Guarantor or any Significant Restricted
Subsidiary or of any substantial part of their respective properties, or
ordering the winding up or liquidation of their respective affairs, and any such
decree or order for relief shall continue to be in effect, or any such other
decree or order shall be unstayed and in effect, for a period of 60 consecutive
days; or
(i) (i) the Company, any Guarantor or any Significant Restricted
Subsidiary commences a voluntary case or proceeding under any applicable
Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or
insolvent, (ii) the Company, any Guarantor or any Significant Restricted
Subsidiary consents to the entry of a decree or order for relief in respect of
the Company, such Guarantor or such Significant Restricted Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or to the
commencement of any bankruptcy or insolvency case or
81
proceeding against it, (iii) the Company, any Guarantor or any Significant
Restricted Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (iv) the
Company, any Guarantor or any Significant Restricted Subsidiary (1) consents to
the filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company, any Guarantor or such Significant Restricted Subsidiary
or of any substantial part of their respective properties, (2) makes an
assignment for the benefit of creditors or (3) admits in writing its inability
to pay its debts generally as they become due, or (v) the Company, any Guarantor
or any Significant Restricted Subsidiary takes any corporate action in
furtherance of any such actions in this paragraph (i).
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(h) and (i)) shall occur and be continuing with respect to this
Indenture, the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities then Outstanding may, and the Trustee at the
request of such Holders shall, declare all unpaid principal of, premium, if any,
and accrued interest on all Securities to be due and payable, by a notice in
writing to the Company (and to the Trustee if given by the Holders of the
Securities) and upon any such declaration, such principal, premium, if any, and
interest shall become due and payable immediately. If an Event of Default
specified in clause (h) or (i) of Section 501 occurs with respect to the
Company, any Guarantor or any Significant Restricted Subsidiary and is
continuing, then all the Securities shall ipso facto become and be due and
payable immediately in an amount equal to the principal amount of the
Securities, together with accrued and unpaid interest, if any, to the date the
Securities become due and payable, without any declaration or other act on the
part of the Trustee or any Holder. Thereupon, the Trustee may, at his or her
discretion, proceed to protect and enforce the rights of the Holders of the
Securities by appropriate judicial proceedings.
At any time after such declaration of acceleration with respect to the
Securities, but before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in aggregate principal amount of the Securities
Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
82
(i) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Outstanding Securities,
(iii) the principal of and premium, if any, on any Outstanding
Securities which have become due otherwise than by such declaration of
acceleration and interest thereon at a rate borne by the Securities,
and
(iv) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities;
and
(b) all Events of Default, other than the non-payment of principal of
the Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513. No such rescission and
annulment shall affect any subsequent Default or impair any right consequent
thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company and each Guarantor covenant that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of, premium, if
any, on any Security at the Stated Maturity thereof,
the Company and such Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and premium, if any, and interest, with
interest upon the overdue principal and premium, if any, and, to the extent that
payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Securities; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such
amounts forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Securities
83
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company, any Guarantor or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or any Guarantee by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, 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 therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 512. No recovery of any such judgment upon any property of the Company
or any Guarantor 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 Company or any other obligor, including any
Guarantor, upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) 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 Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official 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
84
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 Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture, the Securities
or the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name 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 Securities in respect of which
such judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
Subject to Articles Thirteen and Fourteen of this Indenture, any money
collected by the Trustee pursuant to this Article or otherwise on behalf of the
Holders or the Trustee pursuant to this Article or through any proceeding or any
arrangement or restructuring in anticipation or in lieu of any proceeding
contemplated by this Article shall be applied, subject to applicable law, in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal, premium, if any, or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities for principal, premium, if any, and interest, 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 Securities for principal, premium, if any, and interest; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto, including the Company, provided that all sums due and owing to the
Holders and the Trustee have been paid in full as required by this Indenture.
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Section 507. Limitation on Suits.
-------------------
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Securities, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 15 days after its receipt of such notice, request
and offer (and if requested, provision) of indemnity has failed to institute any
such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 15-day period by the Holders of a majority in
principal amount of the Outstanding Securities;
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, any Security or any Guarantee 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,
any Security or any Guarantee, except in the manner provided in this Indenture
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 Security shall have the right based on the terms stated herein, which is
absolute and unconditional, to receive payment of the principal of, premium, if
any, and (subject to Section 309) interest on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or the repurchase date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder; provided, however, that
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such rights shall be subject to the subordination provisions contained in
Articles Thirteen and Fourteen of this Indenture.
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 or any Guarantee 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 the
Company, any Guarantor, any other obligor on the Securities, the Trustee and the
Holders shall, subject to any determination in such proceeding, 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 in Section 308 with respect to the
replacement or payment of multilated, destroyed, lost or stolen Securities, 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 of any Security
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.
------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities shall have the right to direct the time, method
and place of conducting any proceeding for exercising any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, provided
that
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(a) such direction shall not be in conflict with any rule of law or
with this Indenture (including, without limitation, Section 507) or any
Guarantee, expose the Trustee to personal liability, or be unduly prejudicial to
Holders not joining therein; and
(b) 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.
Section 513. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may on behalf of the Holders of all Outstanding
Securities waive any past Default hereunder and its consequences, except a
Default
(a) in the payment of the principal of, premium, if any, or interest
on any Security; or
(b) in respect of a covenant or a provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder of
each Security Outstanding affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that 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,
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
Company, 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 Securities, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of, premium, if any, or
interest on, any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption, on or after the Redemption
Date).
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Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities contemplated herein or in the Securities or which may affect
the covenants or the performance of this Indenture; and each of the Company and
the Guarantors (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 516. Remedies Subject to Applicable Law.
----------------------------------
All rights, remedies and powers provided by this Article Five may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Indenture invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
ARTICLE SIX
THE TRUSTEE
Section 601. Duties of Trustee.
-----------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) if a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs;
(b) except during the continuance of a Default or an Event of
Default:
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(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to the
Trustee; and
(2) 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. However, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture;
(c) the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this Subsection (c) does not limit the effect of Subsection
(b) of this Section 601;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith, in accordance with a
direction of the Holders of a majority in principal amount of
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power confirmed upon the Trustee under this
Indenture;
(d) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it;
(e) whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to Subsections
(a), (b), (c) and (d) of this Section 601; and
(f) the Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree with the Company. Assets
held in trust by the Trustee need not be segregated from other assets except to
the extent required by law.
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Section 602. Notice of Defaults.
------------------
Within 30 days after a Responsible Officer of the Trustee receives
notice of the occurrence of any Default, the Trustee shall transmit by mail to
all Holders and any other Persons entitled to receive reports pursuant to
Section 313(c) of the Trust Indenture Act, as their names and addresses appear
in the Security Register, notice of such Default hereunder known to 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, premium, if
any, or interest on any Security, the Trustee shall be protected in withholding
such notice if and so long as a trust committee of Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 603. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 601 hereof and Trust Indenture
Act Sections 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon 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;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written 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 in accordance with such advice
or Opinion of Counsel;
(d) 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 security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred therein or thereby
in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence, bad faith or willful misconduct of
the Trustee;
91
(f) 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, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document
unless requested in writing to do so by the Holders of not less than a majority
in aggregate principal amount of the Securities then Outstanding; provided that,
if the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation so requested by
the Holders of not less than 25% in aggregate principal amount of the Securities
Outstanding shall be paid by the Company or, if paid by the Trustee or any
predecessor Trustee, shall be repaid by the Company upon demand; provided,
further, the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate; and
(h) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 604. Trustee Not Responsible for Recitals, Dispositions of Securities
----------------------------------------------------------------
or Application of Proceeds Thereof.
----------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
Neither the Trustee nor any Authenticating Agent makes any representations as to
the validity or sufficiency of this Indenture or of the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder and
that the statements made by it in any Statement of Eligibility and Qualification
on Form T-1 supplied to the Company are or will be true and accurate subject to
the qualifications set forth therein. The Trustee shall not be accountable for
the
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use or application by the Company of Securities or the proceeds thereof nor
shall the Trustee be responsible for any statement in any registration statement
for the Securities under the Securities Act or responsible for the determination
as to which beneficial owners are entitled to receive notices hereunder.
Section 605. Trustee and Agents May Hold Securities; Collections; etc.
---------------------------------------------------------
The Trustee, any Authenticating Agent, any Paying Agent, Security
Registrar or any other agent of the Company, or any Guarantor in its individual
or any other capacity, may become the owner or pledgee of Securities, with the
same rights it would have if it were not the Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent and, subject to Sections
608 and 613 hereof and Trust Indenture Act Sections 310 and 311, may otherwise
deal with the Company or any Guarantor and receive, collect, hold and retain
collections from the Company or any Guarantor with the same rights it would have
if it were not the Trustee, Paying Agent, Security Registrar 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 for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Articles Four, Eleven and Twelve and Sections 1013 and 1016,
the Trustee shall be required to invest all moneys received by the Trustee,
until used or applied as herein provided, in Temporary Cash Investments in
accordance with the written directions of the Company.
Section 607. Compensation and Indemnification of Trustee and Its Prior Claim.
---------------------------------------------------------------
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation 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) and, except as otherwise expressly provided herein, the Company covenants
and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by or on behalf of the Trustee in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence, bad faith or willful misconduct. The Company also
covenants and agrees to indemnify the Trustee and each predecessor Trustee for,
and to hold it harmless against, any claim, loss, liability, tax, assessment or
other governmental charge (other than taxes
93
applicable to the Trustee's compensation hereunder) or expense incurred without
negligence, bad faith or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this Indenture or the trusts
hereunder and its duties hereunder, including enforcement of this Section 607
and also including any liability which the Trustee may incur as a result of
failure to withhold, pay or report any tax, assessment or other governmental
charge, and the costs and expenses of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligations of the Company under this
Section 607 to compensate and indemnify the Trustee and each predecessor Trustee
and to pay or reimburse the Trustee and each predecessor Trustee for reasonable
expenses, disbursements and advances shall constitute an additional obligation
hereunder and shall survive the satisfaction and discharge of this Indenture and
the resignation or removal of the Trustee and each predecessor Trustee. The
Company shall have the right to defend any claim or threatened claim asserted
against an indemnitee for which it may seek indemnity, and the indemnitee shall
cooperate in the defense unless, in the reasonable opinion of the indemnitee's
counsel, the indemnitee has an interest materially adverse to the Company or any
Guarantor or a potential conflict of interest exists between the indemnitee and
the Company or any Guarantor, in which case the indemnitee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel; provided that the Company shall only be responsible for the reasonable
fees and expenses of one law firm (in addition to local counsel, to the extent
such local counsel is reasonably required) arising out of the same general
allegations or circumstances, such law firm to be designated by the indemnitee
and reasonably acceptable to the Company.
Section 608. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 609. Trustee Eligibility.
-------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a)(5) and which
shall have a combined capital and surplus of at least $100,000,000, to the
extent there is an institution eligible and willing to serve. 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 Company to conduct
any activities which the Trustee may be required under this Indenture to conduct
in The City of New York. If such Trustee 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 609, the combined capital and surplus of such
corporation shall
94
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 609, the Trustee
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 610. Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
(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 under Section 611.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Company. Upon
receiving such notice or resignation, the Company shall promptly appoint a
successor trustee, a copy of such appointment which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance by a successor trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may, or any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint and prescribe a successor trustee.
(c) The Trustee may be removed at any time for any cause or for no
cause by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and to
the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security
for at least six months,
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control
95
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 514, the Holder of any Security who has been a bona fide Holder of a
Security 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. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint 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
Company shall promptly appoint a successor trustee and shall comply with the
applicable requirements of Section 611. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, the
Company has not appointed a successor Trustee, a successor trustee shall be
appointed by the Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee. Such
successor trustee so appointed shall forthwith upon its acceptance of such
appointment become the successor trustee and supersede the successor trustee
appointed by the Company. If no successor trustee shall have been so appointed
by the Company or the Holders of the Securities and accepted appointment in the
manner hereinafter provided, the Holder of any Security who has been a bona fide
Holder for at least six months may, subject to Section 514, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor trustee and the address of its
Corporate Trust Office or agent hereunder.
Section 611. Acceptance of Appointment by Successor.
--------------------------------------
Every successor trustee appointed hereunder shall execute, acknowledge
and deliver to the Company 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 as if originally named as Trustee hereunder;
but, nevertheless, on the written request of the Company or the successor
trustee, upon payment of its charges pursuant to Section 607 then unpaid, such
retiring Trustee shall pay over to the successor trustee all moneys at the
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time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 611 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 609.
Upon acceptance of appointment by any successor trustee as provided in
this Section 611, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the appointment, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
610. If the Company fails to give such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 612. 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 (including the trust created by this Indenture) shall be
the successor of the Trustee hereunder, provided that such corporation shall be
eligible under Trust Indenture Act Section 310(a) and this Article Six and shall
have a combined capital and surplus of at least $100,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 609,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificate shall have the
full
97
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have; provided that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 613. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). A Trustee who has resigned or been
removed shall be subject to Trust Indenture Act Section 311(a) to the extent
indicated therein.
Section 614. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents acceptable to and
at the expense of the Company which shall be authorized to act on behalf of the
Trustee to authenticate Securities issued upon original issue and upon exchange,
registration of transfer, partial conversion or partial redemption or pursuant
to Section 308, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a Person organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $100,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent 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 an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any Person
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succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such Person shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Company or the Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company or the
Trustee, as the case may be. Upon receiving such a notice of resignation or
upon such a termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee may appoint a successor Authenticating Agent which shall be acceptable
to the Company and shall mail notice of such appointment by first-class mail,
postage prepaid, to all Holders as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment under this Section shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as if originally named
as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible to act as such under the provisions of this Section.
Any Authenticating Agent by the acceptance of its appointment shall be
deemed to have represented to the Trustee that it is eligible for appointment as
Authenticating Agent under this Section and to have agreed with the Trustee
that: it will perform and carry out the duties of an Authenticating Agent as
herein set forth, including among other things the duties to authenticate
Securities when presented to it in connection with the original issuance and
with exchanges, registrations of transfer or redemptions or conversions thereof
or pursuant to Section 306; it will keep and maintain, and furnish to the
Trustee from time to time as requested by the Trustee, appropriate records of
all transactions carried out by it as Authenticating Agent and will furnish the
Trustee such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the provisions of
this Section. Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have agreed with the Trustee to indemnify the Trustee against
any loss, liability or expense incurred by the Trustee and to defend any claim
asserted against the Trustee by reason of any acts or failures to act of such
Authenticating Agent, but such Authenticating Agent shall have no liability for
any action taken by it in accordance with the specific written direction of the
Trustee.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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If an appointment is made pursuant to this Section, the Securities may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
STATE STREET BANK AND
TRUST COMPANY, As Trustee
By: _________________________________
[Name of Authenticating Agent]
______________________________________
As Authenticating Agent
By: _________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company 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 request in writing, within
30 days after receipt by the Company 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 Security
Registrar, no such list need be furnished.
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Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c). Further, every
Holder of Securities, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company nor the Trustee or any agent of either
of them shall be held accountable by reason of the disclosure of any information
as to the names and addresses of the Holders in accordance with Trust Indenture
Act 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 Trust Indenture Act Section 312.
Section 703. Reports by Trustee.
------------------
(a) Within 60 days after May 15 of each year commencing with the first
May 15 after the issuance of Securities, the Trustee, if so required under the
Trust Indenture Act, shall transmit by mail to all Holders, in the manner and to
the extent provided in Trust Indenture Act Section 313(c), a brief report dated
as of such May 15 in accordance with and with respect to the matters required by
Trust Indenture Act Section 313(a). The Trustee shall also transmit by mail to
all Holders, in the manner and to the extent provided in Trust Indenture Act
Section 313(c), a brief report in accordance with and with respect to the
matters required by Trust Indenture Act Section 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 703 shall, at the time of such transmission, be mailed to the Company
and filed with each stock exchange, if any, upon which the Securities are listed
and also with the Commission. The Company will notify the Trustee promptly if
the Securities are listed on any stock exchange.
Section 704. Reports by Company and Guarantors.
---------------------------------
The Company, and each Guarantor, as the case may be, shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required (subject to all applicable extensions
and provisions for incorporation by reference) to file the same with the
Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which the
Company or any Guarantor may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company or any
Guarantor, as the case may be, is not required to file information,
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documents or reports pursuant to either of said Sections, then it shall (i)
deliver to the Trustee annual audited financial statements of the Company and
its Subsidiaries, prepared on a Consolidated basis in conformity with generally
accepted accounting principles then in effect, within 120 days after the end of
each fiscal year of the Company, and (ii) file with the Trustee and, to the
extent permitted by law, the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company or any Guarantor, as the case may be, with the conditions and covenants
of this Indenture as are required from time to time by such rules and
regulations (including such information, documents and reports referred to in
Trust Indenture Act Section 314(a)); and
(c) within 15 days after the filing thereof with the Trustee, transmit
by mail to all Holders in the manner and to the extent provided in Trust
Indenture Act Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company or any Guarantor, as the case may
be, pursuant to Section 1019 hereunder and subsections (a) and (b) of this
Section as are required by rules and regulations prescribed from time to time by
the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company and Guarantors May Consolidate, etc., Only on Certain
-------------------------------------------------------------
Terms.
-----
(a) The Company will not, in a single transaction or through a series
of related transactions, consolidate with or merge with or into any other Person
or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Restricted Subsidiaries on a
Consolidated
102
basis to any other Person or group of affiliated Persons, unless at the time and
after giving effect thereto:
(i) either (a) the Company will be the continuing corporation
or (b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of
the Company and its Subsidiaries on a Consolidated basis (the
"Surviving Entity") will be a corporation duly organized and validly
existing under the laws of the United States of America, any state
thereof or the District of Columbia and such Person expressly assumes,
by a supplemental indenture, in a form satisfactory to the Trustee,
all the obligations of the Company under the Securities and hereunder,
and the Securities and this Indenture will remain in full force and
effect as so supplemented;
(ii) immediately before and immediately after giving effect to
such transaction on a pro forma basis (and treating any Indebtedness
not previously an obligation of the Company or any of its Restricted
Subsidiaries which becomes the obligation of the Company or any of its
Restricted Subsidiaries as a result of such transaction as having been
incurred at the time of such transaction), no Default or Event of
Default will have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis (and treating any Indebtedness not previously an
obligation of the Company or any of its Restricted Subsidiaries which
becomes the obligation of the Company or any of its Subsidiaries as a
result of such transaction as having been incurred at the time of such
transaction), the Consolidated Net Worth of the Company (or the
Surviving Entity if the Company is not the continuing obligor under
this Indenture) is equal to or greater than the Consolidated Net Worth
of the Company immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to
such transaction on a pro forma basis (on the assumption that the
transaction occurred on the first day of the four-quarter period for
which financial statements are available ending immediately prior to
the consummation of such transaction with the appropriate adjustments
with respect to the transaction being included in such pro forma
calculation), the Company (or the Surviving Entity if the Company is
not the continuing
103
obligor hereunder) could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 1008;
(v) at the time of the transaction, each Guarantor, if any,
unless it is the other party to the transactions described above, will
have by supplemental indenture confirmed that its Guarantees shall
apply to such Person's obligations hereunder and under the Securities;
(vi) at the time of the transaction if any of the property or
assets of the Company or any of its Restricted Subsidiaries would
thereupon become subject to any Lien, the provisions of Section 1011
are complied with; and
(vii) at the time of the transaction the Company or the
Surviving Entity will have delivered, or caused to be delivered, to
the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each to
the effect that such consolidation, merger, transfer, sale,
assignment, conveyance, transfer, lease or other transaction and the
supplemental indenture in respect thereof comply with this Indenture
and that all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) Each Guarantor shall not, and the Company will not permit a
Guarantor to, in a single transaction or through a series of related
transactions, consolidate with or merge with or into any other Person (other
than the Company or any Restricted Subsidiary) or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a Consolidated basis to any Person or group of
affiliated Persons (other than the Company or any Restricted Subsidiary), or
permit any of its Restricted Subsidiaries to enter into any such transaction or
series of related transactions if such transaction or series of related
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Guarantor and its Restricted Subsidiaries on a Consolidated basis
to any other Person or group of affiliated Persons (other than the Company or
any Guarantor), unless at the time and after giving effect thereto:
(i) either (1) the Guarantor will be the continuing corporation
or (2) the Person (if other than the Guarantor) formed by such
consolidation or into which such Guarantor is merged or the Person
which acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of
the Guarantor and its Subsidiaries on a Consolidated basis (the
"Surviving Guarantor Entity") will be a corporation
104
duly organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia and
such Person expressly assumes, by a supplemental indenture, in a form
satisfactory to the Trustee, all the obligations of such Guarantor
under its Guarantee of the Securities and this Indenture, and such
Guarantee will remain in full force and effect;
(ii) immediately before and immediately after giving effect to
such transaction, on a pro forma basis no Default or Event of Default
shall have occurred and be continuing; and
(iii) at the time of the transaction such Guarantor or the
Surviving Guarantor Entity will have delivered, or caused to be
delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion
of Counsel, each to the effect that such consolidation, merger,
transfer, sale, assignment, conveyance, lease or other transaction and
the supplemental indenture in respect thereof comply with this
Indenture and that all conditions precedent therein provided for
relating to such transaction have been complied with.
Notwithstanding the foregoing, Section 801(b) shall not apply upon any
sale, exchange or transfer, to any Person not an Affiliate of the Company, of
all of the Company's Capital Stock in, or all or substantially all the assets
of, a Guarantor in accordance with Section 1014(c) herein.
Section 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor, if any, in accordance with Section 801,
the successor Person formed by such consolidation or into which the Company or
such Guarantor, as the case may be, is merged or the successor Person to which
such sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture, in the
Securities and/or the Guarantee, as the case may be, with the same effect as if
such successor had been named as the Company or such Guarantor, as the case may
be, herein, in the Securities and/or in the Guarantee, as the case may be. When
a successor (other than a successor that is an Affiliate of the Company) assumes
all the obligations of its predecessor under this Indenture, the Securities or a
Guarantee, as the case may be, the predecessor shall be released from those
obligations and covenants hereof and the Securities; provided that in the case
of a transfer by lease, the predecessor
105
shall not be released from the payment of principal and interest on the
Securities or a Guarantee, as the case may be.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
-------
Without the consent of any Holders, the Company, the Guarantors, if
any, and any other obligor upon the Securities when authorized by appropriate
corporate action, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee, in form and substance satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, any
Guarantor or any other obligor upon the Securities, and the assumption by any
such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Securities and in any Guarantee in accordance with Article
Eight;
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Securities for the benefit of the Holders, or to surrender any
right or power conferred upon the Company or any Guarantor or any other obligor
upon the Securities, as applicable, herein, in the Securities or in any
Guarantee;
(c) to cure any ambiguity, or to correct or supplement any provision
herein or in any supplemental indenture, the Securities or any Guarantee which
may be defective or inconsistent with any other provision herein or in the
Securities or any Guarantee or to make any other provisions with respect to
matters or questions arising under this Indenture, the Securities or the
Guarantees; provided that, in each case, such provisions shall not adversely
affect the interest of the Holders;
(d) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act, as contemplated by Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 1014;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
106
(g) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security for
the payment and performance of the Company's or any Guarantor's Indenture
Obligations, in any property, or assets, including any of which are required to
be mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to this Indenture or otherwise.
Section 902. Supplemental Indentures and Agreements with Consent of Holders.
--------------------------------------------------------------
In addition to the circumstances permitted by Section 901, with the
consent of the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities, by Act of said Holders delivered to the Company,
each Guarantor, if any, and the Trustee, the Company and each Guarantor (if a
party thereto) when authorized by Board Resolutions, and the Trustee may (i)
enter into an indenture or indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee in form and substance satisfactory to
the Trustee, for the purpose of adding any provisions to or amending, modifying
or changing in any manner or eliminating any of the provisions of this
Indenture, the Securities or any Guarantee (including but not limited to, for
the purpose of modifying in any manner the rights of the Holders under this
Indenture, the Securities or any Guarantee) or (ii) waive compliance with any
provision in this Indenture, the Securities or any Guarantee (other than waivers
of past Defaults covered by Section 513 and waivers of covenants which are
covered by Section 1022); provided, however, that no such supplemental
indenture, agreement or instrument shall, without the consent of the Holder of
each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment
of interest on, or change to an earlier date any redemption date of, or waive a
default in the payment of the principal or interest on, any such Security or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change the coin or currency in
which the principal of any Security or any premium or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate an offer with respect to any Asset Sale or Asset Sales in accordance
with Section 1013 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with
Section 1016, including, in each case, amending, changing or modifying any
definitions relating thereto;
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture,
107
or the consent of whose Holders is required for any waiver or compliance with
certain provisions of this Indenture;
(d) modify any of the provisions of this Section 902, Section 513 or
1022, except to increase the percentage of such Outstanding Securities required
for any such actions or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of each
such Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations hereunder; or
(f) amend or modify any of the provisions of this Indenture relating
to the subordination of the Securities or any Guarantee in any manner adverse to
the Holders or the holders of any Guarantee.
Upon the written request of the Company and each Guarantor, if any,
accompanied by a copy of Board Resolutions authorizing the execution of any such
supplemental indenture or Guarantee, and upon the filing with the Trustee of
evidence of the consent of Holders as aforesaid, the Trustee shall join with the
Company and each Guarantor in the execution of such supplemental indenture or
Guarantee.
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement, instrument or waiver permitted by this
Article Nine or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Trust
Indenture Act Sections 315(a) through 315(d) and Section 602 hereof) shall be
fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that the execution of such supplemental indenture, agreement
or instrument (a) is authorized or permitted by this Indenture and (b) does not
violate the provisions of any agreement or instrument evidencing any other
Indebtedness of the Company, any Guarantor or any other Restricted Subsidiary.
The Trustee may, but shall not be obligated to, enter into any such supplemental
indenture, agreement or instrument which affects the Trustee's own rights,
duties or immunities under this Indenture, any Guarantee or otherwise.
108
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 Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine 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 Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and each Guarantor and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.
Section 907. Notice of Supplemental Indentures.
---------------------------------
Promptly after the execution by the Company, any Guarantor and the
Trustee of any supplemental indenture pursuant to the provisions of Section 902,
the Company shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 106, setting forth in
general terms the substance of such supplemental indenture; provided, however,
that the failure of the Company to transmit such notice to such Holders shall
not in any way impair or affect the validity of such supplemental indenture.
Section 908. Revocation and Effects of Consents.
----------------------------------
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same
Indebtedness as the consenting Holder's Security, even if a notation of the
consent is not made on any Security. However, any such Holder, or subsequent
Holder, may revoke the consent as to his Security or portion of a Security if
the Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. An amendment or waiver shall become effective in
accordance with its terms and thereafter bind every Holder.
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Section 909. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under
Article Thirteen or Article Fourteen of any holder of Senior Indebtedness unless
the requisite holders of such issue of Senior Indebtedness affected thereby
shall have consented in writing to such supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
The Company shall duly and punctually pay the principal of, premium,
if any, and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment. The Company also will maintain in The
City of New York an office or agency where Securities may be surrendered for
registration of transfer, redemption or exchange and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location and any change in the location of any such offices or agencies. If at
any time the Company shall fail to maintain any such required offices or
agencies or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
office of the agent of the Trustee and the Company hereby appoints the Trustee
such agent as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation. The Company will give prompt written notice to the
Trustee of any such designation or rescission and any change in the location of
any such office or agency.
The Trustee shall initially act as Paying Agent for the Securities.
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company or any of its Affiliates shall at any time act as
Paying Agent, it will, on or before each due date of the principal of, premium,
if any, or interest
110
on any of the Securities, segregate and hold in trust for the benefit of the
Holders entitled thereto a sum sufficient to pay the principal, premium, if any,
or interest so becoming due until such sums shall be paid to such Holders or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
If the Company or any of its Affiliates is not acting as Paying Agent,
the Company will, on or before each due date of the principal of, premium, if
any, or interest on any of the Securities, deposit with a Paying Agent a sum in
same day funds sufficient to pay the principal, 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 Company will promptly notify the Trustee of such action or
any failure so to act.
If the Company is not acting as Paying Agent, the Company 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:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on the Securities 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;
(b) give the Trustee notice of any Default by the Company or any
Guarantor (or any other obligor upon the Securities) in the making of any
payment of principal, premium, if any, or interest on the Securities;
(c) 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; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company 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 Company 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 money.
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Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
-------------- ---
Wall Street Journal (national edition), and mail to each such Holder, notice
-------------------
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such notification,
publication and mailing, any unclaimed balance of such money then remaining will
promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Restricted Subsidiary; provided, however, that the Company
shall not be required to preserve any such right or franchise or the corporate
existence of any such Restricted Subsidiary if the Board of Directors of the
Company shall determine that the preservation thereof is no longer necessary or
desirable in the conduct of the business of the Company and its Restricted
Subsidiaries as a whole and that the loss thereof would not reasonably be
expected to have a material adverse effect on the ability of the Company to
perform its obligations hereunder; and provided, further, however, that the
foregoing shall not prohibit a sale, transfer or conveyance of a Restricted
Subsidiary or any of its assets in compliance with the terms of this Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
of its Restricted Subsidiaries shown to be due on any return of the Company or
any of its Restricted Subsidiaries or otherwise assessed or upon the income,
profits or property of the Company or any of its Restricted Subsidiaries if
failure to pay or discharge the same could reasonably be expected to have a
material adverse effect on the ability of the Company or any Guarantor to
perform any of their obligations hereunder and (b) all lawful claims for labor,
materials and supplies, which, if unpaid, would by law become a
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Lien upon the property of the Company or any of its Restricted Subsidiaries,
except for any Lien permitted to be incurred under Section 1011, if failure to
pay or discharge the same could reasonably be expected to have a material
adverse effect on the ability of the Company or any Guarantor to perform any of
their obligations hereunder; provided, however, that the Company and the
Guarantors 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 properly
instituted and diligently conducted and in respect of which appropriate reserves
(in the good faith judgment of management of the Company) are being maintained
in accordance with GAAP.
Section 1006. Maintenance of Properties.
-------------------------
The Company shall cause all material properties owned by the Company
and any of its Restricted Subsidiaries or used or held for use in the conduct of
its business or the business of any of its Restricted Subsidiaries to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the reasonable judgment of the Company may be
consistent with sound business practice and necessary so that the business
carried on in connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the maintenance of any of such properties if such discontinuance
is, in the reasonable judgment of the Company, desirable in the conduct of its
business or the business of any of its Restricted Subsidiaries and not
reasonably expected to have a material adverse effect on the ability of the
Company to perform its obligations hereunder.
Section 1007. Insurance.
---------
The Company shall at all times keep all of its and its Restricted
Subsidiaries' properties which are of an insurable nature insured with insurers,
believed by the Company in good faith to be financially sound and responsible,
against loss or damage to the extent that property of similar character is
usually so insured by corporations similarly situated and owning like properties
engaged in similar operations in the same general geographic areas in which the
Company and its Restricted Subsidiaries operate, except where the failure to do
so could not reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), earnings, business affairs or prospects of
the Company and its Restricted Subsidiaries, taken as a whole, provided that
--------
such insurance is generally available at commercially reasonable rates, and
further provided that the Company may self-insure, or insure through captive
--------
insurers or insurance cooperatives to the extent consistent with prudent
business practices.
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Such insurance shall be in such amounts, contain such terms, be in such forms
and be for such periods as are customary in the Company's industry and
commercially reasonable. Such insurance may be subject to such deductibles as
are customary in the industry.
Section 1008. Limitation on Indebtedness.
--------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, create, issue, incur, assume, guarantee or otherwise in any
manner become directly or indirectly liable for the payment of or otherwise
incur (collectively, "incur"), any Indebtedness (including any Acquired
Indebtedness), unless such Indebtedness is incurred by the Company or a
Guarantor or constitutes Acquired Indebtedness of a Restricted Subsidiary (which
is not a Guarantor) and, in each case, the Company's Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters for which financial statements
are available immediately preceding the incurrence of such Indebtedness taken as
one period (and after giving pro forma effect to (i) the incurrence of such
Indebtedness and (if applicable) the application of the net proceeds therefrom,
including the refinancing of other Indebtedness, as if such Indebtedness was
incurred, and the application of such proceeds occurred, on the first day of
such applicable period; (ii) the incurrence, repayment or retirement of any
other Indebtedness by the Company and its Restricted Subsidiaries since the
first day of such applicable period as if such Indebtedness was incurred, repaid
or retired at the beginning of such applicable period (except that, in making
such computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such applicable period); (iii) in the case of Acquired Indebtedness or
any acquisition occurring at the time of the incurrence of such Indebtedness,
the related acquisition, assuming such acquisition had been consummated on the
first day of such applicable period; and (iv) any acquisition or disposition by
the Company and its Restricted Subsidiaries of any company or any business or
any assets out of the ordinary course of business, whether by merger, stock
purchase or sale or asset purchase or sale, or any related repayment of
Indebtedness, in each case since the first day of such applicable period,
assuming such acquisition or disposition had been consummated on the first day
of such applicable period) is at least equal to or greater than 2.00 to 1.
(b) Notwithstanding the foregoing, the Company and, to the extent
specifically set forth below, the Restricted Subsidiaries may incur each and all
of the following (collectively, the "Permitted Indebtedness"):
(i) Indebtedness of the Company or any Guarantor under the Credit
Facility and under any revolving credit facility or bank term loans in an
aggregate principal amount at any one time outstanding not to exceed $115
million;
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(ii) Indebtedness of the Company pursuant to the Securities and
Indebtedness of any Guarantor pursuant to a Guarantee of the Securities;
(iii) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of this Indenture and listed on Schedule I hereto;
(iv) Indebtedness of the Company owing to a Restricted Subsidiary;
provided that any Indebtedness of the Company owing to a Restricted Subsidiary
is made pursuant to an intercompany note in the form of Exhibit A hereto and is
unsecured and subordinated in right of payment from and after such time as the
Securities shall become due and payable (whether at Stated Maturity,
acceleration or otherwise) to the payment and performance of the Company's
obligations under the Securities; provided, further, that any disposition,
pledge or transfer of any such Indebtedness to a Person (other than a
disposition, pledge or transfer to a Restricted Subsidiary) shall be deemed to
be an incurrence of such Indebtedness by the Company not permitted by this
clause (iv);
(v) Indebtedness of a Wholly Owned Restricted Subsidiary owing to
the Company or any Guarantor; provided that any such Indebtedness is made
pursuant to an intercompany note in the form of Exhibit A hereto; provided,
further, that (a) any disposition, pledge or transfer of any such Indebtedness
to a Person (other than the Company or a Guarantor) shall be deemed to be an
incurrence of such Indebtedness by the obligor not permitted by this clause (v),
and (b) any transaction pursuant to which any Wholly Owned Restricted
Subsidiary, which has Indebtedness owing to the Company or any Guarantor, ceases
to be a Wholly Owned Restricted Subsidiary shall be deemed to be the incurrence
of Indebtedness by such Wholly Owned Restricted Subsidiary that is not permitted
by this clause (v);
(vi) guarantees of any Restricted Subsidiary made in accordance with
the provisions of Section 1014 of this Indenture;
(vii) obligations of the Company entered into in the
ordinary course of business (a) pursuant to Interest Rate Agreements designed to
protect the Company or any Restricted Subsidiary against fluctuations in
interest rates in respect of Indebtedness of the Company or any Restricted
Subsidiary as long as such obligations do not exceed the aggregate principal
amount of such Indebtedness then outstanding, (b) under any Currency Hedging
Arrangements, which if related to Indebtedness do not increase the amount of
such Indebtedness other than as a result of currency price fluctuations, or (c)
under any Commodity Price Protection Agreements, which if related to
Indebtedness do not increase the amount of such Indebtedness other than as a
result of commodity price fluctuations;
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(viii) Indebtedness of the Company or any Guarantor represented by
Capital Lease Obligations or Purchase Money Obligations or other Indebtedness
incurred or assumed in connection with the acquisition or development of real or
personal, movable or immovable, property in each case incurred for the purpose
of financing or refinancing all or any part of the purchase price or cost of
construction or improvement of property used in the business of the Company or
such Guarantor, in an aggregate principal amount pursuant to this clause (viii)
not to exceed $10 million outstanding at any time;
(ix) (a) letters of credit (other than the Special Purpose Letter of
Credit) in the ordinary course of business in the aggregate amount of $15
million at any one time outstanding to the extent that such letters of credit
are not drawn upon or, to the extent drawn upon, such drawings are fully
reimbursed by the Company within 10 business days from the receipt by the
Company of a demand for reimbursement thereof (collectively "Undrawn Letters of
Credit") and (b) letters of credit (other than the Special Purpose Letter of
Credit and Undrawn Letters of Credit) and banker's acceptances in the ordinary
course of business in the aggregate amount of $5 million at any one time
outstanding;
(x) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any Indebtedness
described in clauses (ii) and (iii) above, including any successive refinancings
so long as the aggregate principal amount of Indebtedness represented thereby
(or, if such Indebtedness provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the maturity
thereof, the original issue price of such Indebtedness plus any accreted value
attributable thereto since the original issuance of such Indebtedness) is not
increased by such refinancing plus the lesser of (1) the stated amount of any
premium or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or (2)
the amount of premium or other payment actually paid at such time to refinance
the Indebtedness, plus, in either case, the amount of expenses of the Company or
a Restricted Subsidiary incurred in connection such refinancing and (A) in the
case of any refinancing of Subordinated Indebtedness, such new Subordinated
Indebtedness is (I) made subordinated to the Securities at least to the same
extent as the Subordinated Indebtedness being refinanced, (II) has an Average
Life to Stated Maturity greater than the lesser of (x) the remaining Average
Life to Stated Maturity of the Subordinated Indebtedness being refinanced or (y)
the remaining Average Life to Stated Maturity of the Notes, and (III) has a
Stated Maturity for its final scheduled principal payment later than the earlier
of (x) the Stated Maturity for the final scheduled principal payment of the
Subordinated Debt being refinanced or (y) the Stated Maturity for the final
scheduled principal payment of the Notes, and (B) in the case of Pari Passu
Indebtedness, such refinancing does not reduce the Average Life to Stated
Maturity or the Stated Maturity of such Pari Passu Indebtedness; and
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(xi) Indebtedness of the Company or any Guarantor in addition to that
described in clauses (i) through (x) above, and any renewals, extensions,
substitutions, refinancings or replacements of such Indebtedness, so long as the
aggregate principal amount of all Indebtedness pursuant to this clause (xi)
shall not exceed in the aggregate $25 million at any one time outstanding.
Section 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Company's Capital Stock (other than
dividends or distributions payable solely in its shares of
Qualified Capital Stock or in options, warrants or other rights
to acquire shares of such Qualified Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, the Company's Capital Stock or any
Capital Stock of any Affiliate of the Company (other than Capital
Stock of any Wholly Owned Restricted Subsidiary) or options,
warrants or other rights to acquire such Capital Stock;
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled
principal payment, sinking fund payment or maturity, any
Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Capital Stock
of any Restricted Subsidiary to any Person (other than (a) to the
Company or any of its Wholly Owned Restricted Subsidiaries or (b)
to all holders of Capital Stock of such Restricted Subsidiary on
a pro rata basis); or
(v) make any Investment in any Person (other than any Permitted
Investments)
(any of the foregoing actions described in clauses (i) through (v), other than
any such action that is a Permitted Payment (as defined below), collectively,
"Restricted Payments") (the amount of any such Restricted Payment, if other than
cash, shall be determined by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a Board Resolution), unless
(1) immediately before and immediately after giving effect to such proposed
Restricted Payment on a pro forma
117
basis, no Default or Event of Default shall have occurred and be continuing and
such Restricted Payment shall not be an event which is, or after notice or lapse
of time or both, would be, an "event of default" under the terms of any
Indebtedness of the Company or its Restricted Subsidiaries; (2) immediately
before and immediately after giving effect to such Restricted Payment on a pro
forma basis, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under the provisions described in Section 1008
hereof; and (3) after giving effect to the proposed Restricted Payment, the
aggregate amount of all such Restricted Payments declared or made after the date
hereof, does not exceed the sum of:
(A) $3.0 million;
(B) 50% of the aggregate cumulative Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on the first
day of the fiscal quarter beginning after the date of this Indenture
and ending on the last day of the Company's last fiscal quarter ending
prior to the date of the Restricted Payment (or, if such aggregate
cumulative Consolidated Net Income shall be a loss, minus 100% of such
loss);
(C) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any
of its Subsidiaries) of Qualified Capital Stock of the Company or any
options, warrants or rights to purchase such Qualified Capital Stock
of the Company (except, in each case, to the extent such proceeds are
used to purchase, redeem or otherwise retire Capital Stock or
Subordinated Indebtedness as set forth below in clause (ii) or (iii)
of paragraph (b) below);
(D) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company (other than from any of its Restricted
Subsidiaries) upon the exercise of any options, warrants or rights to
purchase Qualified Capital Stock of the Company;
(E) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company from the conversion or exchange, if any, of
debt securities or Redeemable Capital Stock of the Company or its
Subsidiaries into or for Qualified Capital Stock of the Company plus,
to the extent such debt securities or Redeemable Capital Stock were
issued after the date of this Indenture, the aggregate of Net Cash
Proceeds from their original issuance; and
(F) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after the date of this
Indenture, an amount which
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was treated as a Restricted Payment made after the date of the
Indenture (to the extent not included in Consolidated Net Income)
equal to the lesser of the return of capital with respect to such
Investment and the initial amount of such Investment, in either case,
less the cost of disposition of such Investment.
(b) Notwithstanding the foregoing, and in the case of clauses (ii)
through (vii) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(each of clauses (i) through (v) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such
payment was permitted by the provisions of paragraph (a) of
this Section and such payment shall have been deemed to have
been paid on such date of declaration and shall not have been
deemed a "Permitted Payment" for purposes of the calculation
required by paragraph (a) of this Section;
(ii) the repurchase, redemption, or other acquisition or retirement
of any shares of any class of Capital Stock of the Company in
exchange for (including any such exchange pursuant to the
exercise of a conversion right or privilege in connection with
which cash is paid in lieu of the issuance of fractional shares
or scrip), or out of the Net Cash Proceeds of a substantially
concurrent issue and sale for cash (other than to a Subsidiary)
of, other shares of Qualified Capital Stock of the Company;
provided that such Net Cash Proceeds from the issuance of such
shares of Qualified Capital Stock are excluded from clause
(3)(C) of paragraph (a) of this Section;
(iii) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any
Subordinated Indebtedness in exchange for, or in an amount not
in excess of the Net Cash Proceeds of, a substantially
concurrent issuance and sale for cash (other than to any
Subsidiary of the Company) of any Qualified Capital Stock of
the Company, provided that the Net Cash Proceeds from the
issuance of such shares of Qualified Capital Stock are excluded
from clause (3)(C) of paragraph (a) of this Section;
(iv) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of principal of
any Subordinated Indebtedness (other than Redeemable Capital
Stock) (a
119
"refinancing") through the substantially concurrent issuance of
new Subordinated Indebtedness of the Company, provided that any
such new Subordinated Indebtedness (1) shall be in a principal
amount that does not exceed the principal amount so refinanced
(or, if such Subordinated Indebtedness provides for an amount
less than the principal amount thereof to be due and payable upon
a declaration of acceleration thereof, then such lesser amount as
of the date of determination), plus the lesser of (I) the stated
amount of any premium or other payment required to be paid in
connection with such a refinancing pursuant to the terms of the
Subordinated Indebtedness being refinanced or (II) the amount of
premium or other payment actually paid at such time to refinance
the Subordinated Indebtedness, plus, in either case, the amount
of expenses of the Company incurred in connection with such
refinancing; (2) has an Average Life to Stated Maturity greater
than the lesser of (x) the remaining Average Life to Stated
Maturity of the Subordinated Indebtedness being refinanced or (y)
the remaining Average Life to Stated Maturity of the Securities;
(3) has a Stated Maturity for its final scheduled principal
payment later than the earlier of (x) the Stated Maturity for the
final scheduled principal payment of the Subordinated
Indebtedness being refinanced or (y) the Stated Maturity for the
final scheduled principal payment of the Securities; and (4) is
expressly subordinated in right of payment to the Securities at
least to the same extent as the Subordinated Indebtedness to be
refinanced;
(v) repurchases of Capital Stock (or warrants or options convertible
into or exchangeable for such Capital Stock) deemed to occur upon
exercise of stock options to the extent that shares of such
Capital Stock (or warrants or options convertible into or
exchangeable for such Capital Stock) represents a portion of the
exercise price of such options;
(vi) the repurchase of any Subordinated Indebtedness of the Company or
any Guarantor at a purchase price not greater than 101% of the
principal amount of such Subordinated Indebtedness in the event
of a Change of Control (as defined below) pursuant to a provision
similar to Section 1016 hereof; provided that prior to or
simultaneously with such repurchase, the Company has made the
Change of Control Offer as provided in such covenant and has
repurchased all Securities validly tendered for payment in
connection with such Change of Control Offer; and
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(vii) the repurchase of any Subordinated Indebtedness of the Company or
any Guarantor, at a purchase price not greater than 100% of the
principal amount of such Indebtedness in the event of an Asset
Sale pursuant to a provision similar to Section 1013 hereof;
provided that prior to such repurchase the Company has made an
Offer to purchase the Securities as provided in such covenant and
has repurchased all Securities validly tendered for payment in
connection with such Offer.
Section 1010. Limitation on Transactions with Affiliates.
------------------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into any transaction or series of
related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with any Affiliate of the
Company (other than the Company or a Wholly Owned Restricted Subsidiary) unless
such transaction or series of related transactions is entered into in good faith
and in writing and (a) such transaction is on terms that are no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that would be available in a comparable transaction in arm's-length dealings
with an unrelated third party, (b) with respect to any transaction or series of
related transactions involving aggregate value in excess of $5,000,000, the
Company delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of related transactions complies with clause (a) above and
(c) with respect to any transaction or series of related transactions involving
aggregate payments in excess of $10,000,000, either (i) such transaction or
series of related transactions has been approved by a majority of the
Disinterested Directors of the Company, or in the event there is only one
Disinterested Director, by such Disinterested Director, or (ii) the Company
delivers to the Trustee a written opinion of an investment banking firm of
national standing or other recognized independent expert with experience
appraising the terms and conditions of the type of transaction or series of
related transactions for which an opinion is required stating that the
transaction or series of related transactions is fair to the Company or such
Restricted Subsidiary from a financial point of view; provided, however, that
this provision shall not apply to any transaction with an officer or director of
the Company entered into in the ordinary course of business (including
compensation and employee benefit arrangements with any officer, director or
employee of the Company, including under any stock option or stock incentive
plans).
Section 1011. Limitation on Liens.
-------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, create, incur or affirm any Lien of any
kind securing any Pari Passu Indebtedness or Subordinated Indebtedness
(including any assumption, guarantee
121
or other liability with respect thereto by any Restricted Subsidiary) upon any
property or assets (including any intercompany notes) of the Company or any
Subsidiary owned on the date of this Indenture or acquired after the date of
this Indenture, or any income or profits therefrom, unless the Securities are
directly secured equally and ratably with (or, in the case of Subordinated
Indebtedness, prior or senior thereto, with the same relative priority as the
Securities shall have with respect to such Subordinated Indebtedness) the
obligation or liability secured by such Lien except for Liens (A) securing any
Indebtedness which becomes Indebtedness pursuant to a transaction permitted
under Article Eight hereof or securing Acquired Indebtedness which, in each
case, were created prior to (and not created in connection with, or in
contemplation of) the incurrence of such Pari Passu Indebtedness or Subordinated
Indebtedness (including any assumption, guarantee or other liability with
respect thereto by any Restricted Subsidiary) and which Indebtedness is
permitted under the provisions of Section 1008 hereof or (B) securing any
Indebtedness incurred in connection with any refinancing, renewal, substitution
or replacement of any such Indebtedness described in clause (A), so long as the
aggregate principal amount of Indebtedness represented thereby is not increased
by such refinancing by an amount greater than the lesser of (i) the stated
amount of any premium or other payment required to be paid in connection with
such a refinancing pursuant to the terms of the Indebtedness being refinanced or
(ii) the amount of premium or other payment actually paid at such time to
refinance the Indebtedness, plus, in either case, the amount of expenses of the
Company incurred in connection with such refinancing; provided, however, that in
the case of clauses (A) and (B), any such Lien only extends to the assets that
were subject to such Lien securing such Indebtedness prior to the related
acquisition by the Company or its Restricted Subsidiaries.
(b) Notwithstanding the foregoing, any Lien securing the Securities
granted pursuant to clause (a) above shall be automatically and unconditionally
released and discharged upon the release by the holders of the Pari Passu
Indebtedness or Subordinated Indebtedness described in clause (a) above of their
Lien on the property or assets of the Company or any Restricted Subsidiary
(including any deemed release upon payment in full of all obligations under such
Indebtedness), at such time as the holders of all such Pari Passu Indebtedness
or Subordinated Indebtedness also release their Lien on the property or assets
of the Company or such Restricted Subsidiary.
Section 1012. Limitation on Senior Subordinated Indebtedness.
----------------------------------------------
The Company will not, and will not permit any Guarantor to, directly
or indirectly, create, incur, issue, assume, guarantee or otherwise in any
manner become directly or indirectly liable for or with respect to or otherwise
permit to exist any Indebtedness that is subordinate in right of payment to any
Indebtedness of the Company or such Guarantor, as the case may be, unless such
Indebtedness is also pari passu with the Securities or the Guarantee of such
Guarantor or subordinate in right of payment to
122
the Securities or such Guarantee at least to the same extent as the Securities
or such Guarantee are subordinate in right of payment to Senior Indebtedness or
Senior Indebtedness of such Guarantor, as the case may be.
Section 1013. Limitation on Sale of Assets.
----------------------------
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale unless (i) at
least 80% of the consideration from such Asset Sale is received in cash or Cash
Equivalents and (ii) the Company or such Subsidiary receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value of the
shares or assets subject to such Asset Sale (as determined by the Board of
Directors of the Company and evidenced in a Board Resolution). For the purposes
of this covenant, "Cash Equivalents" means (x) the assumption of Indebtedness of
the Company or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Asset Sale, (y) Temporary Cash Investments, and (z) securities received by
the Company or any Restricted Subsidiary from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash.
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are
not required to be applied to repay permanently any Senior Indebtedness
outstanding as required by the terms thereof, or the Company determines not to
apply such Net Cash Proceeds to the permanent repayment of the Senior
Indebtedness, or if no such Senior Indebtedness is outstanding then, the Company
or a Subsidiary may, within 365 days of the Asset Sale invest the Net Cash
Proceeds in capital expenditures, properties, inventories and other assets that
(as determined by the Board of Directors of the Company) replace the properties
and assets that were the subject of the Asset Sale or in capital expenditures,
properties, inventories and other assets that will be used in the businesses of
the Company or its Restricted Subsidiaries existing on the date of this
Indenture or in businesses reasonably related thereto. The amount of such Net
Cash Proceeds not used or invested as set forth in this paragraph constitutes
"Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10,000,000
or more, the Company will apply the Excess Proceeds to the repayment of the
Securities and any other Pari Passu Indebtedness outstanding with similar
provisions requiring the Company to make an offer to purchase such Indebtedness
with the proceeds from any Asset Sale as follows: (A) the Company will make an
offer to purchase (an "Offer") from all holders of the Securities in accordance
with the procedures set forth in this Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased out of
an amount (the "Security Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding principal
amount of the Securities, and the denominator of which is the sum
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of the outstanding principal amount of the Securities and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price (as defined herein) of all Securities tendered) and (B)
to the extent required by such Pari Passu Indebtedness to permanently reduce the
principal amount of such Pari Passu Indebtedness, the Company will make an offer
to purchase or otherwise repurchase or redeem Pari Passu Indebtedness (a "Pari
Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the excess of
the Excess Proceeds over the Security Amount; provided that in no event will the
Company be required to make a Pari Passu Offer in a Pari Passu Debt Amount
exceeding the principal amount of such Pari Passu Indebtedness plus the amount
of any premium required to be paid to repurchase such Pari Passu Indebtedness.
The offer price for the Securities will be payable in cash in an amount equal to
100% of the principal amount of the Securities plus accrued and unpaid interest,
if any, to the date (the "Offer Date") such Offer is consummated (the "Offered
Price"), in accordance with the procedures set forth in this Indenture. To the
extent that the aggregate Offered Price of the Securities tendered pursuant to
the Offer is less than the Security Amount relating thereto or the aggregate
amount of Pari Passu Indebtedness that is purchased in a Pari Passu Offer is
less than the Pari Passu Debt Amount, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Securities and Pari Passu Indebtedness surrendered by holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Securities to be
purchased on a pro rata basis. Upon the completion of the purchase of all the
Securities tendered pursuant to an Offer and the completion of a Pari Passu
Offer, the amount of Excess Proceeds, if any, shall be reset at zero.
(d) When the aggregate amount of Excess Proceeds exceeds $10,000,000,
such Excess Proceeds will, prior to any purchase of Securities described in
paragraph (c) above, be set aside by the Company in a separate account pending
(i) deposit with the depository or a paying agent of the amount required to
purchase the Securities tendered in an Offer or Pari Passu Indebtedness tendered
in a Pari Passu Offer, (ii) delivery by the Company of the Offered Price to the
holders of the Securities tendered in an Offer or Pari Passu Indebtedness
tendered in a Pari Passu Offer and (iii) application, as set forth above, of
Excess Proceeds in the business of the Company and its Subsidiaries for general
corporate purposes. Such Excess Proceeds may be invested in Temporary Cash
Investments, provided that the maturity date of any such investment made after
the amount of Excess Proceeds exceeds $10,000,000 shall not be later than the
Offer Date. The Company shall be entitled to any interest or dividends accrued,
earned or paid on such Temporary Cash Investments; provided that the Company
shall not withdraw such interest from the separate account if an Event of
Default has occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant to
clause (c) above, the Securities and the Pari Passu Indebtedness shall be
purchased by the Company, at the option of the holders thereof, in whole or in
part in integral multiples of
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$1,000, on a date that is not earlier than 45 days and not later than 60 days
from the date the notice of the Offer is given to holders, or such later date as
may be necessary for the Company to comply with the requirements under the
Exchange Act.
(f) The Company will comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(g) Subject to paragraph (f) above, within 30 days after the date on
which the amount of Excess Proceeds equals or exceeds $10,000,000, the Company
shall send or cause to be sent by first-class mail, postage prepaid, to the
Trustee and to each Holder, at his address appearing in the Security Register, a
notice stating or including:
(1) that the Holder has the right to require the Company to
repurchase, subject to proration, such Holder's Securities at the
Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have his
Securities purchased in accordance with paragraph (c) of this Section;
(4) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q, as
applicable, and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports
describing Asset Sales otherwise described in the offering materials
(or corresponding successor reports) (or in the event the Company is
not required to prepare any of the foregoing Forms, the comparable
information required pursuant to Section 1020), (ii) a description of
material developments, if any, in the Company's business subsequent to
the date of the latest of such Reports, (iii) if material, appropriate
pro forma financial information, and (iv) such other information, if
any, concerning the business of the Company which the Company in good
faith believes will enable such Holders to make an informed investment
decision regarding the Offer;
(5) the Offered Price;
(6) the names and addresses of the Paying Agent and the offices
or agencies referred to in Section 1002;
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(7) that Securities must be surrendered prior to the Offer Date
to the Paying Agent at the office of the Paying Agent or to an office
or agency referred to in Section 1002 to collect payment;
(8) that any Securities not tendered will continue to accrue
interest and that unless the Company defaults in the payment of the
Offered Price, any Security accepted for payment pursuant to the Offer
shall cease to accrue interest on and after the Offer Date;
(9) the procedures for withdrawing a tender; and
(10) that the Offered Price for any Security which has been
properly tendered and not withdrawn and which has been accepted for
payment pursuant to the Offer will be paid promptly following the
Offered Date.
(h) Holders electing to have Securities purchased hereunder will be
required to surrender such Securities at the address specified in the notice on
or prior to the Offer Date. Holders will be entitled to withdraw their election
to have their Securities purchased pursuant to this Section 1013 if the Company
receives, not later than the Offer Date, a telegram, telex, facsimile
transmission or letter setting forth (1) the name of the Holder, (2) the
certificate number of the Security in respect of which such notice of withdrawal
is being submitted, (3) the principal amount of the Security (which shall be
$1,000 or an integral multiple thereof) delivered for purchase by the Holder as
to which his election is to be withdrawn, (4) a statement that such Holder is
withdrawing his election to have such principal amount of such Security
purchased, and (5) the principal amount, if any, of such Security (which shall
be $1,000 or an integral multiple thereof) that remains subject to the original
notice of the Offer and that has been or will be delivered for purchase by the
Company.
(i) The Company shall (i) not later than the Offer Date, accept for
payment Securities or portions thereof tendered pursuant to the Offer, (ii) not
later than 10:00 a.m. (New York time) on the Business Day following the Offer
Date, deposit with the Trustee or with a Paying Agent an amount of money in same
day funds (or New York Clearing House funds if such deposit is made prior to the
Offer Date) sufficient to pay the aggregate Offered Price of all the Securities
or portions thereof which are to be purchased on that date and (iii) not later
than 10:00 a.m. (New York time) on the Business Day following the Offer Date,
deliver to the Paying Agent an Officers' Certificate stating the Securities or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Securities so accepted payment in an
amount equal to the Offered Price of the Securities purchased from each such
Holder, and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to
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such Holders a new Security equal in principal amount to any unpurchased portion
of the Security surrendered. Any Securities not so accepted shall be promptly
mailed or delivered by the Paying Agent at the Company's expense to the Holder
thereof. For purposes of this Section 1013, the Company shall choose a Paying
Agent which shall not be the Company.
Subject to applicable escheat laws, the Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed, together with
interest, if any, thereon, held by them for the payment of the Offered Price;
provided, however, that (x) to the extent that the aggregate amount of cash
deposited by the Company with the Trustee in respect of an Offer exceeds the
aggregate Offered Price of the Securities or portions thereof to be purchased,
then the Trustee shall hold such excess for the Company and (y) unless otherwise
directed by the Company in writing, no later than the second Business Day
following the Offer Date the Trustee shall return any such excess (including,
without limitation, monies deposited with respect to an election which has been
withdrawn in accordance with paragraph (h)) to the Company together with
interest or dividends, if any, thereon.
(j) Securities to be purchased shall, on the Offer Date, become due
and payable at the Offered Price and from and after such date (unless the
Company shall default in the payment of the Offered Price) such Securities shall
cease to bear interest. Such Offered Price shall be paid to such Holder
promptly following the later of the Offer Date and the time of delivery of such
Security to the relevant Paying Agent at the office of such Paying Agent by the
Holder thereof in the manner required. Upon surrender of any such Security for
purchase in accordance with the foregoing provisions, such Security shall be
paid by the Company at the Offered Price; provided, however, that installments
of interest whose Stated Maturity is on or prior to the Offer Date shall be
payable to the Person in whose name the Securities (or any Predecessor
Securities) is registered as such on the relevant Regular Record Dates according
to the terms and the provisions of Section 309; provided, further, that
Securities to be purchased are subject to proration in the event the Excess
Proceeds are less than the aggregate Offered Price of all Securities tendered
for purchase, with such adjustments as may be appropriate by the Trustee so that
only Securities in denominations of $1,000 or integral multiples thereof, shall
be purchased. If any Security tendered for purchase shall not be so paid upon
surrender thereof by deposit of funds with the Trustee or a Paying Agent in
accordance with paragraph (h) above, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Offer Date at the rate borne
by such Security. Any Security that is to be purchased only in part shall be
surrendered to a Paying Agent at the office of such Paying Agent (with, if the
Company, the Security Registrar or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Security Registrar or the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute and
the Trustee shall
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authenticate and deliver to the Holder of such Security, without service charge,
one or more new Securities of any authorized denomination as requested by such
Holder in an aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased. The Company shall publicly announce the results of the Offer on or as
soon as practicable after the Offer Date.
Section 1014. Limitation on Issuances of Guarantees of Indebtedness.
-----------------------------------------------------
(a) The Company will not permit any Restricted Subsidiary, other than
the Guarantors, directly or indirectly, to secure the payment of any Senior
Indebtedness of the Company and the Company will not, and will not permit any
Restricted Subsidiary to, pledge any intercompany notes representing obligations
of any Restricted Subsidiary (other than the Guarantors) to secure the payment
of any Senior Indebtedness unless in each case such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a guarantee of payment of the Securities by such Restricted
Subsidiary, which guarantee shall be on the same terms as the guarantee of the
Senior Indebtedness (if a guarantee of Senior Indebtedness is granted by any
such Restricted Subsidiary) except that the guarantee of the Securities need not
be secured and shall be subordinated to the claims against such Restricted
Subsidiary in respect of Senior Indebtedness to the same extent as the
Securities are subordinated to Senior Indebtedness of the Company under this
Indenture.
(b) The Company will not permit any Restricted Subsidiary, directly or
indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Company unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Guarantee of the Securities, on the same terms as the guarantee
of such Indebtedness except that (A) such guarantee need not be secured unless
required pursuant to Section 1011 hereof, (B) if such Indebtedness is by its
terms Senior Indebtedness, any such assumption, guarantee or other liability of
such Restricted Subsidiary with respect to such Indebtedness shall be senior to
such Restricted Subsidiary's Guarantee of the Securities to the same extent as
such Senior Indebtedness is senior to the Securities and (C) if such
Indebtedness is by its terms expressly subordinated to the Securities, any such
assumption, guarantee or other liability of such Restricted Subsidiary with
respect to such Indebtedness shall be subordinated to such Restricted
Subsidiary's Guarantee of the Securities at least to the same extent as such
Indebtedness is subordinated to the Securities.
(c) Notwithstanding the foregoing, any Guarantee by a Restricted
Subsidiary of the Securities shall provide by its terms that it (and all Liens
securing the same) shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's Capital Stock in, or all or
substantially all the assets of, such Restricted
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Subsidiary, which transaction is in compliance with the terms of this Indenture
and such Restricted Subsidiary is released from all guarantees, if any, by it of
other Indebtedness of the Company or any Restricted Subsidiaries or (ii) (with
respect to any Guarantees created after the date of this Indenture) the release
by the holders of the Indebtedness of the Company described in clauses (a) and
(b) above of their security interest or their guarantee by such Restricted
Subsidiary (including any deemed release upon payment in full of all obligations
under such Indebtedness), at such time as (A) no other Indebtedness of the
Company has been secured or guaranteed by such Restricted Subsidiary, as the
case may be, or (B) the holders of all such other Indebtedness which is secured
or guaranteed by such Restricted Subsidiary also release their security interest
in, or guarantee by such Restricted Subsidiary (including any deemed release
upon payment in full of all obligations under such Indebtedness).
Section 1015. Restriction on Transfer of Assets.
---------------------------------
The Company and the Guarantors will not sell, convey, transfer or
otherwise dispose of its assets or property to any of its Restricted
Subsidiaries, except for sales, conveyances, transfers or other dispositions (a)
made in the ordinary course of business or (b) to any Restricted Subsidiary if
such Subsidiary is a Guarantor or simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a Guarantee of the
payment of the Securities by such Restricted Subsidiary on a senior subordinated
basis. For purposes of this provision any sale, conveyance, transfer, lease or
other disposition of property or assets having a Fair Market Value in excess of
(a) $5,000,000 for any sale, conveyance, transfer or disposition or series of
related sales, conveyances, transfers, leases or dispositions and (b)
$10,000,000 in the aggregate for all such sales, conveyances, transfers, leases
or dispositions in any fiscal year of the Company shall not be considered "in
the ordinary course of business."
Section 1016. Purchase of Securities Upon a Change of Control.
-----------------------------------------------
(a) If a Change of Control shall occur at any time, then each Holder
of Securities shall have the right to require that the Company purchase such
Holder's Securities in whole or in part in integral multiples of $1,000, at a
purchase price (the "Change of Control Purchase Price") in cash in an amount
equal to 101% of the principal amount of such Securities, plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Purchase Date"), pursuant to the offer described below in this Section 1016 (the
"Change of Control Offer") and in accordance with the other procedures set forth
in subsections (b), (c), (d) and (e) of this Section 1016.
(b) Within 30 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice (a "Change of Control
Purchase Notice") of such Change of Control to each Holder of Securities by
first-class mail,
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postage prepaid, at such Holder's address appearing in the Security Register,
stating among other things:
(1) that a Change of Control has occurred, the date of such
event, and that such Holder has the right to require the Company to
repurchase such Holder's Securities at the Change of Control Purchase
Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving
effect to such Change of Control);
(3) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company,
the most recent subsequently filed Quarterly Report on Form 10-Q, as
applicable, and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report (or in the event the Company is
not required to prepare any of the foregoing Forms, the comparable
information required to be prepared by the Company and any Guarantor
pursuant to Section 1020), (ii) a description of material
developments, if any, in the Company's business subsequent to the date
of the latest of such reports and (iii) such other information, if
any, concerning the business of the Company which the Company in good
faith believes will enable such Holders to make an informed investment
decision regarding the Change of Control Offer;
(4) that the Change of Control Offer is being made pursuant to
this Section 1016 and that all Securities properly tendered pursuant
to the Change of Control Offer will be accepted for payment at the
Change of Control Purchase Price;
(5) the Change of Control Purchase Date, which shall be a
Business Day fixed by the Company which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed, or
such later date as is necessary to comply with requirements under the
Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices
or agencies referred to in Section 1002;
(8) that Securities must be surrendered prior to the Change of
Control Purchase Date to the Paying
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Agent at the office of the Paying Agent or to an office or agency
referred to in Section 1002 to collect payment;
(9) that the Change of Control Purchase Price for any Security
which has been properly tendered and not withdrawn will be paid
promptly following the Change of Control Offer Purchase Date;
(10) the procedures that a Holder must follow to accept a Change
of Control Offer or to withdraw such acceptance;
(11) that any Security not tendered will continue to accrue
interest; and
(12) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities,
the Holder of the Security in respect of which such proper tender was made shall
(unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Upon surrender of any such Security for purchase in accordance
with the foregoing provisions, such Security shall be paid by the Company at the
Change of Control Purchase Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Change of Control Purchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 309. If any Security
tendered for purchase in accordance with the provisions of this Section 1016
shall not be so paid upon surrender thereof, the principal thereof (and premium,
if any, thereon) shall, until paid, bear interest from the Change of Control
Purchase Date at the rate borne by such Security. Holders electing to have
Securities purchased will be required to surrender such Securities to the Paying
Agent at the address specified in the Change of Control Purchase Notice on or
prior to the Change of Control Purchase Date. Any Security that is to be
purchased only in part shall be surrendered to a Paying Agent at the office of
such Paying Agent (with, if the Company, the Security Registrar or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Security Registrar or the Trustee, as the
case may be, duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
one or more new Securities of any authorized denomination as
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requested by such Holder in an aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so surrendered
that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Securities or portions thereof tendered
pursuant to the Change of Control Offer, (ii) not later than 10:00 a.m. (New
York time) on the Business Day following the Change of Control Purchase Date,
deposit with the Trustee or with a Paying Agent an amount of money in same day
funds (or New York Clearing House funds if such deposit is made prior to the
Change of Control Purchase Date) sufficient to pay the aggregate Change of
Control Purchase Price of all the Securities or portions thereof which are to be
purchased as of the Change of Control Purchase Date and (iii) not later than
10:00 a.m. (New York time) on the Business Day following the Change of Control
Purchase Date, deliver to the Paying Agent an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Change of Control Purchase Price of the
Securities purchased from each such Holder, and the Company shall execute and
the Trustee shall promptly authenticate and mail or deliver to such Holders a
new Security equal in principal amount to any unpurchased portion of the
Security surrendered. Any Securities not so accepted shall be promptly mailed
or delivered by the Paying Agent at the Company's expense to the Holder thereof.
The Company will publicly announce the results of the Change of Control Offer on
the Change of Control Purchase Date. For purposes of this Section 1016, the
Company shall choose a Paying Agent which shall not be the Company.
(e) A tender made in response to a Change of Control Purchase Notice
may be withdrawn if the Company receives, not later than one Business Day prior
to the Change of Control Purchase Date, a telegram, telex, facsimile
transmission or letter, specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which
such notice of withdrawal is being submitted;
(3) the principal amount of the Security (which shall be $1,000
or an integral multiple thereof) delivered for purchase by the Holder
as to which such notice of withdrawal is being submitted;
(4) a statement that such Holder is withdrawing his election to
have such principal amount of such Security purchased; and
(5) the principal amount, if any, of such Security (which shall
be $1,000 or an integral multiple thereof) that remains subject to the
original
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Change of Control Purchase Notice and that has been or will
be delivered for purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying
Agent shall return to the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that, (x) to the extent
that the aggregate amount of cash deposited by the Company pursuant to clause
(ii) of paragraph (d) above exceeds the aggregate Change of Control Purchase
Price of the Securities or portions thereof to be purchased, then the Trustee
shall hold such excess for the Company and (y) unless otherwise directed by the
Company in writing, no later than the second Business Day following the Change
of Control Purchase Date the Trustee shall return any such excess (including,
without limitation, monies deposited with respect to a tender withdrawn in
accordance with the provisions of paragraph (e)) to the Company together with
interest, if any, thereon.
(g) The Company shall comply, to the extent applicable, with the
applicable tender offer rules, including Rule 14e-1 under the Exchange Act, and
any other applicable securities laws or regulations in connection with a Change
of Control Offer.
Section 1017. Limitation on Restricted Subsidiary Capital Stock.
-------------------------------------------------
The Company will not permit (a) any Restricted Subsidiary of the
Company to issue, sell or transfer any Capital Stock, except for (i) Capital
Stock issued or sold to, held by or transferred to the Company or a Wholly Owned
Restricted Subsidiary, and (ii) Capital Stock issued by a Person prior to the
time (A) such Person becomes a Restricted Subsidiary, (B) such Person merges
with or into a Restricted Subsidiary or (C) a Restricted Subsidiary merges with
or into such Person; provided that such Capital Stock was not issued or incurred
by such Person in anticipation of the type of transaction contemplated by
subclause (A), (B) or (C) or (b) any Person (other than the Company or a Wholly
Owned Restricted Subsidiary) to acquire Capital Stock of any Restricted
Subsidiary from the Company or any Wholly Owned Restricted Subsidiary except, in
the case of clause (a) or (b), upon the acquisition of all the outstanding
Capital Stock of such Restricted Subsidiary in accordance with the terms of this
Indenture.
Section 1018. Limitation on Dividends and Other Payment Restrictions
------------------------------------------------------
Affecting Restricted Subsidiaries.
---------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause to become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distribution on its
Capital Stock, (ii) pay any
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Indebtedness owed to the Company or any other Restricted Subsidiary, (iii) make
any Investment in the Company or any other Restricted Subsidiary or (iv)
transfer any of its properties or assets to the Company or any other Restricted
Subsidiary, except for: (a) any agreement in effect on the date of this
Indenture and listed on Schedule II hereto; (b) any encumbrance or restriction,
with respect to a Restricted Subsidiary that is not a Restricted Subsidiary of
the Company on the date of this Indenture, in existence at the time such Person
becomes a Restricted Subsidiary of the Company and not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary; and
(c) any encumbrance or restriction existing under any agreement that extends,
renews, refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (a) and (b), or in this clause (c),
provided that the terms and conditions of any such encumbrances or restrictions
are no more restrictive in any material respect than those under or pursuant to
the agreement evidencing the Indebtedness so extended, renewed, refinanced or
replaced.
Section 1019. Limitations on Unrestricted Subsidiaries.
----------------------------------------
The Company will not make, and will not permit its Restricted
Subsidiaries to make, any Investment in Unrestricted Subsidiaries if, at the
time thereof, the aggregate amount of such Investments would exceed the amount
of Restricted Payments then permitted to be made pursuant to Section 1009 of
this Indenture. Any Investments in Unrestricted Subsidiaries permitted to be
made pursuant to this Section 1019 (i) will be treated as a Restricted Payment
in calculating the amount of Restricted Payments made by the Company and (ii)
may be made in cash or property.
Section 1020. Provision of Financial Statements.
---------------------------------
Whether or not the Company or any Guarantor is subject to Section
13(a) or 15(d) of the Exchange Act, the Company and such Guarantor will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents which the Company and such
Guarantor would have been required to file with the Commission pursuant to such
Section 13(a) or 15(d) if the Company and such Guarantor were so subject, such
documents to be filed with the Commission on or prior to the date (the "Required
Filing Date") by which the Company and such Guarantor would have been required
so to file such documents if the Company and such Guarantor were so subject.
The Company and such Guarantor will also in any event (x) within 15 days of each
Required Filing Date (i) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such Holders and (ii)
file with the Trustee copies of the annual reports, quarterly reports and other
documents which the Company and such Guarantor would have been required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if
the Company and such Guarantor were subject to either of such Sections and (y)
if filing such documents by the
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Company and such Guarantor with the Commission is not permitted under the
Exchange Act, promptly upon written request and payment of the reasonable cost
of duplication and delivery, supply copies of such documents to any prospective
Holder at the Company's and such Guarantor's cost.
Section 1021. Statement by Officers as to Default.
-----------------------------------
(a) The Company and the Guarantors will deliver to the Trustee, on or
before a date not more than 60 days after the end of each fiscal quarter and not
more than 120 days after the end of each fiscal year of the Company ending
after the date hereof, a written statement signed by two executive officers of
the Company and each Guarantor, one of whom shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company and such Guarantor, as to compliance herewith, including whether or not,
after a review of the activities of the Company during such year or such quarter
and of the Company's and each Guarantor's performance under this Indenture, to
the best knowledge, based on such review, of the signers thereof, no Default or
Event of Default exists, or if a Default exists, specifying the nature and
status thereof and any actions being taken by the Company and the Guarantors
with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, or if the Trustee or any Holder or the trustee for or the holder of
any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default the Company
and the Guarantors shall deliver to the Trustee by registered or certified mail
or facsimile transmission followed by hard copy an Officers' Certificate
specifying such Default, Event of Default, notice or other action, the status
thereof and what actions the Company and the Guarantors are taking or propose to
take with respect thereto, within five Business Days of its occurrence.
Section 1022. Waiver of Certain Covenants.
---------------------------
The Company and the Guarantors may omit in any particular instance to
comply with any covenant or condition set forth in Sections 1006 through 1012,
1014, 1015, and 1017 through 1020, if, before or after the time for such
compliance, the Holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding shall, by Act of such Holders,
waive such compliance in such instance with such covenant or provision, but no
such waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
--------------------
(a) The Securities are subject to redemption at any time on or after
October 15, 2002, at the option of the Company, in whole or in part, subject to
the conditions, and at the Redemption Prices, specified in the form of Security,
together with accrued and unpaid interest, if any, to the Redemption Date
(subject to the right of Holders of record on relevant Regular Record Dates and
Special Record Dates to receive interest due on relevant Interest Payment Dates
and Special Payment Dates).
(b) At any time prior to October 15, 2000, the Company may, at its
option, use the net proceeds of one or more Public Equity Offerings to redeem up
to an aggregate of 30% of the aggregate principal amount of Securities
originally issued under this Indenture at a redemption price equal to 109.25% of
the aggregate principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the redemption date; provided that at least $70 million of
the principal amount of Securities remains outstanding immediately after the
occurrence of such redemption. In order to effect the foregoing redemption, the
Company must mail a notice of redemption no later than 60 days after the closing
of the related Public Equity Offering and must consummate such redemption within
90 days of the closing of the Public Equity Offering.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article Eleven.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Company Order and an Officers' Certificate.
In case of any redemption at the election of the Company, the Company shall, not
less than 45 nor more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 30
days prior to the
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Redemption Date. The Trustee shall select the Securities or portions thereof to
be redeemed pro rata or by lot. The amounts to be redeemed shall be equal to
$1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at its address
appearing in the Security Register. If the redemption is pursuant to Section
1101 (b) hereof, notice of redemption shall be mailed no later than 60 days
after the closing of the related Public Equity Offering.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal
amount of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof to be redeemed, and that
(unless the Company shall default in payment of the Redemption Price) interest
thereon shall cease to accrue on and after said date;
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(g) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 1002 where such Securities are to be surrendered
for payment of the Redemption Price;
(h) subject to Section 310, the CUSIP number, if any,
relating to such Securities; and
(i) the procedures that a Holder must follow to surrender
the Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name and at the expense of the Company. If the Company
elects to give notice of redemption, it shall provide the Trustee with a
certificate stating that such notice has been given in compliance with the
requirements of this Section 1105.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company or any of its Affiliates is
acting as Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money in same day funds sufficient to pay timely the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date
or Special Payment Date) accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date. The Paying Agent shall promptly
mail or deliver to Holders of Securities so redeemed payment in an amount equal
to the Redemption Price of the Securities purchased from each such Holder. All
money, if any, earned on funds held in trust by the Trustee or any Paying Agent
shall be remitted to the Company. For purposes of this Section 1106, the
Company shall choose a Paying Agent which shall not be the Company.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with
138
said notice, such Security shall be paid by the Company at the Redemption Price
together with accrued and unpaid interest 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 Securities, or one
or more Predecessor Securities, registered as such on the relevant Regular
Record Dates and Special Record Dates according to the terms and the provisions
of Section 309.
If any Security 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 such
Security.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security which is to be redeemed or purchased only in part shall
be surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 1002 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar or the
Trustee, as the case may be, duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security so
surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall be discharged and shall cease to be of further
effect (except as to surviving rights of registration of transfer or exchange of
Securities as expressly provided for herein) as to all Outstanding Securities
hereunder, and the Trustee, upon Company Request and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and delivered
(other than (i) lost, stolen or destroyed Securities which have been
replaced or paid as provided in Section 308 or (ii) all Securities for
whose payment
000
Xxxxxx Xxxxxx dollars have theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust as provided in Section 1003)
have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee
for cancellation (i) have become due and payable, (ii) will become due
and payable at their Stated Maturity within one year or (iii) 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 Company; and the
Company or any Guarantor has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust an amount in United
States dollars sufficient to pay and discharge the entire Indebtedness
on the Securities not theretofore delivered to the Trustee for
cancellation, including the principal of, premium, if any, and accrued
interest on, such Securities at such Maturity, Stated Maturity or
Redemption Date;
(b) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Independent Counsel, in form and substance reasonably
satisfactory to the Trustee, each stating that (i) all conditions precedent
herein relating to the satisfaction and discharge hereof have been complied with
and (ii) such satisfaction and discharge will not result in a breach or
violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company, any Guarantor or any
Subsidiary is a party or by which the Company, any Guarantor or any Subsidiary
is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations
of the Company to the Trustee under Section 607 and, if United States dollars
shall have been deposited with the Trustee pursuant to subclause (2) of
subsection (a) of this Section 1201, the obligations of the Trustee under
Section 1202 and the last paragraph of Section 1003 shall survive.
Section 1202. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1201 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company
140
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal of, premium, if any, and interest on, the
Securities for whose payment such United States dollars have been deposited with
the Trustee.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
Section 1301. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security, by
such Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Securities and the payment of the principal of, premium, if
any, and interest on, the Securities are hereby expressly made subordinate and
subject in right of payment as provided in this Article to the prior payment in
full of the Senior Indebtedness.
This Article Thirteen shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold Senior Indebtedness; and such provisions are made for the benefit of the
holders of Senior Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions as provided herein.
Section 1302. Payment Over of Proceeds Upon Dissolution, etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary, or whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due on or in respect of Senior Indebtedness
before the Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding securities of the Company as
reorganized or readjusted or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which
are subordinated in right of payment to all Senior Indebtedness, that may be
outstanding, at least to the extent as, or to a greater extent than, the
Securities are so subordinated as provided in this Article ("Permitted Junior
Securities")) on account of the principal of, premium, if any, or interest on
the Securities
141
or on account of the purchase, redemption, defeasance or other acquisition of,
or in respect of, the Securities (other than amounts previously set aside with
the Trustee, or payments previously made, in either case, pursuant to the
provisions of Sections 402 and 403 of this Indenture); and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders or the Trustee
would be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (excluding Permitted Junior Securities),
in respect of principal, premium, if any, and interest on the Securities or on
account of the purchase, redemption, defeasance or other acquisition of, or in
respect of, the Securities (other than amounts previously set aside with the
Trustee, or payments previously made, in either case, pursuant to Sections 402
and 403 of this Indenture) before all Senior Indebtedness is paid in full, then
and in such event such payment or distribution (excluding Permitted Junior
Securities) shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payments or distributions of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness;
and
(4) the Trustee shall execute and deliver to any Senior Representative
all such further instruments as shall be reasonably requested confirming the
subordination of the Securities pursuant to this Article Thirteen.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the sale, assignment, conveyance, transfer, lease or other disposal of
its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization,
142
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by sale, assignment, conveyance, transfer, lease or other disposal of
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, agrees to be bound by the subordination
provisions contained in Article Thirteen of this Indenture and each of the
conditions set forth in Section 801 (as in effect on the date hereof) shall have
been satisfied in full.
Section 1303. Suspension of Payment When Designated Senior Indebtedness in
------------------------------------------------------------
Default.
-------
(a) Unless Section 1302 shall be applicable, upon the occurrence and
during the continuance of any default in the payment of any principal of,
premium, if any, or interest on, or any other obligation owing in respect of,
any Designated Senior Indebtedness beyond any applicable grace period (a
"Payment Default") and after the receipt by the Trustee from a Senior
Representative of any Designated Senior Indebtedness of written notice of such
default, no payment (other than amounts previously set aside with the Trustee or
payments previously made, in either case, pursuant to Section 402 or 403 in this
Indenture) or distribution of any assets of the Company or any Subsidiary of any
kind or character (excluding Permitted Junior Securities) may be made by the
Company or any Subsidiary on account of the principal of, premium, if any, or
interest on, the Securities, or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of, the Securities unless and
until such Payment Default shall have been cured or waived or shall have ceased
to exist or the Designated Senior Indebtedness shall have been discharged or
paid in full, after which the Company shall (subject to the other provisions of
this Article Thirteen) resume making any and all required payments in respect of
the Securities, including any missed payments.
(b) Unless Section 1302 shall be applicable, (1) upon the occurrence
and during the continuance of any non-payment default with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may then
be accelerated immediately (a "Non-payment Default") and (2) after the receipt
by the Trustee and the Company from a Senior Representative of any Designated
Senior Indebtedness of written notice of such Non-payment Default, no payment
(other than any amounts previously set aside with the Trustee, or payments
previously made, in either case, pursuant to the provisions of Sections 402 or
403 in this Indenture) or distribution of any assets of the Company of any kind
or character (excluding Permitted Junior Securities) may be made by the Company
or any Subsidiary on account of the principal of, premium, if any, or interest
on, the Securities, or on account of the purchase, redemption, defeasance or
other acquisition of,
143
or in respect of, the Securities for the period specified below ("Payment
Blockage Period").
(c) The Payment Blockage Period shall commence upon the receipt of
notice of the Non-payment Default by the Trustee and the Company from a Senior
Representative and shall end on the earliest of (i) the 179th day after such
commencement, (ii) the date on which such Non-payment Default (and all Non-
payment Defaults as to which notice is given after such Payment Blockage Period
is initiated) is properly cured, waived or ceases to exist or on which such
Designated Senior Indebtedness is discharged or paid in full, or (iii) the date
on which such Payment Blockage Period (and all Non-payment Defaults as to which
notice is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company or the Trustee from the Senior
Representative initiating such Payment Blockage Period, after which, in the case
of clauses (i), (ii) and (iii), the Company shall promptly resume making any and
all required payments in respect of the Securities, including any missed
payments. In no event will a Payment Blockage Period extend beyond 179 days
from the date of the receipt by the Company and the Trustee of the notice
initiating such Payment Blockage Period (such 179-day period referred to as the
"Initial Period"). Any number of notices of Non-payment Defaults may be given
during the Initial Period; provided that during any period of 365 consecutive
days only one Payment Blockage Period, during which payment of principal of,
premium, if any, or interest on, the Securities may not be made, may commence
and the duration of such period may not exceed 179 days. No Non-payment Default
with respect to any Designated Senior Indebtedness that existed or was
continuing on the date of the commencement of any Payment Blockage Period will
be, or can be, made the basis for the commencement of a second Payment Blockage
Period, whether or not within a period of 365 consecutive days, unless such
default has been cured or waived in writing for a period of not less than 90
consecutive days. The Company shall deliver a notice to the Trustee promptly
after the date on which any Non-payment Default is cured or waived in writing or
ceases to exist or on which the Designated Senior Indebtedness related thereto
is discharged or paid in full, and the Trustee is authorized to act in reliance
on such notice.
(d) In the event that, notwithstanding the foregoing, the Company
shall make any payment or distribution of any assets of the Company or any
Subsidiary of any kind or character (excluding Permitted Junior Securities) to
the Trustee or the Holder of any Security prohibited by the foregoing provisions
of this Section, then and in such event such payment shall be held in trust for
the holders of Senior Indebtedness and paid over and delivered forthwith to a
Senior Representative of the holders of the Designated Senior Indebtedness or as
a court of competent jurisdiction shall direct.
144
Section 1304. Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding-up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1302 or under the conditions
described in Section 1303, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1305. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
After the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest on, the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
Section 1306. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on, the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company or the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1302, to receive,
pursuant to and in accordance with such Section, cash, property
145
and securities otherwise payable or deliverable to the Trustee or such Holder,
or (2) under the conditions specified in Section 1303, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section 1303(d).
Section 1307. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the
unpaid balance of the indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
Section 1308. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder
or any Senior Representative, or by any non-compliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (1) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (2) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (3) release any Person liable in any manner for
the collection or payment of Senior Indebtedness; (4) exercise or refrain from
exercising any rights against the Company and any other Person; and (5) sell,
assign or transfer the Senior Indebtedness to any Person; provided, however,
that in no event shall any such actions limit the right of the Holders of the
Securities to take any action to accelerate the maturity of the Securities
pursuant to Article Five of this Indenture or to pursue any rights or remedies
hereunder or
146
under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
Section 1309. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Company or a holder of Senior Indebtedness or from a
Senior Representative or any trustee, fiduciary or agent therefor; and, prior to
the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if a
Responsible Officer of the Trustee shall not have received the notice provided
for in this Section by Noon, Eastern Time, on the Business Day prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of, premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding but without limiting the rights and remedies of the
holders of Senior Indebtedness, a Senior Representative or any trustee,
fiduciary or agent thereof, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it after such date; nor shall the Trustee be charged with knowledge
of the curing of any such default or the elimination of the act or condition
preventing any such payment unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person which represents
itself as a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been
given by a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor); provided, however, that failure to give
such notice to the Company shall not affect in any way the ability of the
Trustee to rely on such notice. In the event that the Trustee determines in
good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such
147
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1310. Reliance on Judicial Orders or Certificates.
-------------------------------------------
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, or a certificate of a Senior Representative,
delivered to the Trustee or to the Holders of Securities for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article,
provided that the foregoing shall apply only if such court has been fully
apprised of the provisions of this Article.
Section 1311. Rights of Trustee as a Holder of Senior Indebtedness;
-----------------------------------------------------
Preservation of Trustee's Rights.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
Section 1312. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1311 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1313. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities
148
pursuant to Article Five of this Indenture or to pursue any rights or remedies
hereunder or under applicable law, subject to the rights, if any, under this
Article of the holders, from time to time, of Senior Indebtedness to receive the
cash, property or securities receivable from the Company or any Subsidiary upon
the exercise of such rights or remedies.
Section 1314. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall in good faith
mistakenly (absent negligence or willful misconduct) pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE FOURTEEN
GUARANTEES
Section 1401. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this
Article Fourteen, hereby absolutely, unconditionally and irrevocably guarantees,
jointly and severally, to the Trustee and the Holders, as if the Guarantors were
the principal debtor, the punctual payment and performance when due of all
Indenture Obligations (which for purposes of this Guarantee shall also be deemed
to include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
------------------------------------------------------
Obligation.
----------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and
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provisions applicable to it in this Indenture including those set forth in
Article Eight. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts which constitute part of the
Indenture Obligations and would be owed by the Company under this Indenture and
the Securities but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the
Indenture Obligations shall be paid strictly in accordance with their terms
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the holders of the
Securities.
(d) Each Guarantor's liability to pay or perform or cause the
performance of the Indenture Obligations under this Guarantee shall arise
forthwith after demand for payment or performance by the Trustee has been given
to the Guarantors in the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
(f) This Guarantee is a guarantee of payment, performance and
compliance and not of collectibility and is in no way conditioned or contingent
upon any attempt to collect from or enforce performance or compliance by the
Company or upon any event or condition whatsoever.
(g) The obligations of the Guarantors set forth herein constitute the
full recourse obligations of the Guarantors enforceable against them to the full
extent of all their assets and properties.
150
Section 1403. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of
any Indebtedness or other obligation of the Company or any other
Person under this Indenture or the Securities, or any agreement
or instrument relating to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may
extend to, or make with, the Company, any Guarantor or any other
Person, or any change in the time, manner or place of payment of,
or in any other term of, all or any of the Indenture Obligations,
or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any
increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any
other Person, and the release, discharge or alteration of, or
other dealing with, such security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of
any governmental authority or court amending, varying, reducing
or otherwise affecting, or purporting to amend, vary, reduce or
otherwise affect, any of the Indenture Obligations and the
obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any
Guarantor or any other Person or from perfecting, continuing to
keep perfected or taking advantage of any security;
151
(f) any loss, diminution of value or lack of enforceability of any
security received from the Company, any Guarantor or any other
Person, and including any other guarantees received by the
Trustee;
(g) any other dealings with the Company, any Guarantor or any other
Person, or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the
Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at
any time and from time to time received from the Company, any
Guarantor or any other Person on account of any indebtedness and
liabilities owing by the Company or any Guarantor to the Trustee
or the Holders, in such manner as the Trustee or the Holders
deems best and the changing of such application in whole or in
part and at any time or from time to time, or any manner of
application of collateral, or proceeds thereof, to all or any of
the Indenture Obligations, or the manner of sale of any
collateral;
(j) the release or discharge of the Company or any Guarantor of the
Securities or of any Person liable directly as surety or
otherwise by operation of law or otherwise for the Securities,
other than an express release in writing given by the Trustee, on
behalf of the Holders, of the liability and obligations of any
Guarantor hereunder;
(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or
restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 1414, any merger or consolidation, arrangement
or reorganization of the Company, any Guarantor, any Person
resulting from the merger or consolidation of the Company or any
Guarantor with any other Person or any other successor to such
Person or merged or consolidated Person or any other change in
the corporate existence, structure or ownership of the Company or
any Guarantor or any change in the corporate relationship between
the Company and any Guarantor, or any termination of such
relationship;
152
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership, arrangement, readjustment, assignment for the
benefit of creditors or distribution of the assets of the Company
or its assets or any resulting discharge of any obligations of
the Company (whether voluntary or involuntary) or of any
Guarantor (whether voluntary or involuntary) or the loss of
corporate existence;
(o) subject to Section 1414, any arrangement or plan of
reorganization affecting the Company or any Guarantor;
(p) any failure, omission or delay on the part of the Company to
conform or comply with any term of this Indenture;
(q) any limitation on the liability or obligations of the Company or
any other Person under this Indenture, or any discharge,
termination, cancellation, distribution, irregularity, invalidity
or unenforceability in whole or in part of this Indenture;
(r) any other circumstance (including any statute of limitations)
that might otherwise constitute a defense available to, or
discharge of, the Company or any Guarantor; or
(s) any modification, compromise, settlement or release by the
Trustee, or by operation of law or otherwise, of the Indenture
Obligations or the liability of the Company or any other obligor
under the Securities, in whole or in part, and any refusal of
payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the
Indenture Obligations, whether or not with notice to, or further
assent by, or any reservation of rights against, each of the
Guarantors.
Section 1404. Right to Demand Full Performance.
--------------------------------
In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Indenture and the Securities. The retention by the Trustee or the Holders
of any security, prior to the realization by the Trustee or the
153
Holders of its rights to such security upon foreclosure thereon, shall not, as
between the Trustee and any Guarantor, be considered as a purchase of such
security, or as payment, satisfaction or reduction of the Indenture Obligations
due to the Trustee or the Holders by the Company or any part thereof. Each
Guarantor, promptly after demand, will reimburse the Trustee and the Holders for
all costs and expenses of collecting such amount under, or enforcing this
Guarantee, including, without limitation, the reasonable fees and expenses of
counsel.
Section 1405. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted
by law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations, whether by
statute, rule of law or otherwise. Each Guarantor hereby acknowledges
communication to it of the terms of this Indenture and the Securities and all of
the provisions therein contained and consents to and approves the same. Each
Guarantor hereby expressly waives (to the extent permitted by law) diligence,
presentment, protest and demand for payment with respect to (i) any notice of
sale, transfer or other disposition of any right, title to or interest in the
Securities by the Holders or in this Indenture, (ii) any release of any
Guarantor from its obligations hereunder resulting from any loss by it of its
rights of subrogation hereunder and (iii) any other circumstances whatsoever
that might otherwise constitute a legal or equitable discharge, release or
defense of a guarantor or surety or that might otherwise limit recourse against
such Guarantor.
(b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) enforce, assert, exercise, initiate or exhaust any rights,
remedies or recourse against the Company, any Guarantor or
any other Person under this Indenture or otherwise;
(ii) value, realize upon, or dispose of any security of the
Company or any other Person held by the Trustee or the
Holders;
(iii) initiate or exhaust any other remedy which the Trustee or
the Holders may have in law or equity; or
154
(iv) mitigate the damages resulting from any default under this
Indenture;
before requiring or becoming entitled to demand payment from such Guarantor
under this Guarantee.
Section 1406. The Guarantors Remain Obligated in Event the Company is No
----------------------------------------------------------
Longer Obligated to Discharge Indenture Obligations.
---------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if
for any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all Indenture Obligations owing to the Trustee or the Holders by the
Company have been discharged, or such earlier time as Section 402 shall apply to
the Securities and the Guarantors shall be responsible for the payment thereof
to the Trustee or the Holders upon demand.
Section 1407. Fraudulent Conveyance; Contribution; Subrogation.
-------------------------------------------------
(a) Any term or provision of this Guarantee to the contrary
notwithstanding, the aggregate amount of the Indenture Obligations guaranteed
hereunder shall be reduced to the extent necessary to prevent this Guarantee
from violating or becoming voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) Each Guarantor that makes a payment or distribution under its
Note Guarantee shall be entitled to a contribution from each other Guarantor in
a pro rata amount based on the net assets of each Guarantor, determined in
accordance with GAAP.
(c) Each Guarantor shall be subrogated to all rights of Holders
against the Company in respect of any amounts paid by any Gurantor pursuant to
the provisions of this Article Fourteen; that, if an Event of Default has
occurred and is continuing, no Guarantor shall be entitled to enforce or receive
any payments arising out of, or based upon, such right of subrogation until 91
days after all amounts due and payable by the Company under this Indenture or
the Notes shall have been paid in full.
155
Section 1408. Guarantee is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
Section 1409. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as
otherwise provided in this Indenture, each Guarantor hereby consents and agrees,
to the fullest extent permitted by applicable law, that the rights of the
Trustee hereunder, and the liability of the Guarantors hereunder, shall not be
affected by any and all releases for any purpose of any collateral, if any, from
the Liens and security interests created by any collateral document and that
this Guarantee shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Indenture Obligations is rescinded
or must otherwise be returned by the Trustee upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
Section 1410. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or
instituted under Article Fourteen and this Guarantee and no recovery or judgment
in pursuance thereof shall be a bar or defense to any further action or
proceeding which may be brought under Article Fourteen and this Guarantee by
reason of any further default or defaults under Article Fourteen and this
Guarantee or in the payment of any of the Indenture Obligations owing by the
Company.
Section 1411. Failure to Exercise Rights Shall Not Operate as a Waiver; No
------------------------------------------------------------
Suspension of Remedies.
----------------------
(a) No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, power, privilege or remedy under this
Article Fourteen and this Guarantee shall operate as a waiver thereof, nor shall
any single or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. The rights and remedies herein provided
for are cumulative and not exclusive of any rights or remedies provided in law
or equity.
156
(b) Nothing contained in this Article Fourteen shall limit the right
of the Trustee or the Holders to take any action to accelerate the maturity of
the Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 1412. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) Any provision in this Article Fourteen or elsewhere in this
Indenture allowing the Trustee to request any information or to take any action
authorized by, or on behalf of any Guarantor, shall be permissive and shall not
be obligatory on the Trustee except as the Holders may direct in accordance with
the provisions of this Indenture or where the failure of the Trustee to request
any such information or to take any such action arises from the Trustee's
negligence, bad faith or willful misconduct.
(b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, any Guarantor or the officers, directors or
agents acting or purporting to act on their respective behalf.
Section 1413. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Fourteen shall
extend to and be binding upon each Guarantor and its successors and permitted
assigns and shall enure to the benefit of and may be enforced by the Trustee and
its successors and assigns; provided, however, that the Guarantors may not
assign any of their rights or obligations hereunder other than in accordance
with Article Eight.
Section 1414. Release of Guarantee.
--------------------
Notwithstanding anything in this Article Fourteen to the contrary,
concurrently with the payment in full of all of the Indenture Obligations, the
Guarantors shall be released from and relieved of their obligations under this
Article Fourteen. Upon the delivery by the Company to the Trustee of an
Officers' Certificate and, if requested by the Trustee, an Opinion of Counsel to
the effect that the transaction giving rise to the release of this Guarantee was
made by the Company in accordance with the provisions of this Indenture and the
Securities, the Trustee shall execute any documents reasonably required in order
to evidence the release of the Guarantors from their obligations under this
Guarantee. If any of the Indenture Obligations are revived and reinstated after
the termination of this Guarantee, then all of the obligations of the Guarantors
under this Guarantee shall be revived and reinstated as if this Guarantee had
not been terminated until such time as the Indenture Obligations are paid in
full, and each Guarantor shall
157
enter into an amendment to this Guarantee, reasonably satisfactory to the
Trustee, evidencing such revival and reinstatement.
This Guarantee shall terminate with respect to each Guarantor and
shall be automatically and unconditionally released and discharged as provided
in Section 1014(c).
Section 1415. Execution of Guarantee; Additional Guarantors.
----------------------------------------------
(a) To evidence the Guarantee, each Guarantor hereby agrees to
execute the guarantee substantially in the form set forth in Section 205, to be
endorsed on each Security authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of each Guarantor by its Chairman of
the Board, its President, its Chief Executive Officer, Chief Operating Officer
or one of its Vice Presidents, attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
(b) Any person that was not a Guarantor on the date of this Indenture
may become a Guarantor by executing and delivering to the Trustee (i) a
supplemental indenture in form and substance satisfactory to the Trustee, which
subjects such person to the provisions (including the representations and
warranties) of this Indenture as a Guarantor, (ii) in the event that as of the
date of such supplemental indenture any Registrable Securities are outstanding,
an instrument in form and substance satisfactory to the Trustee which subjects
such person to the provisions of the Registration Rights Agreement with respect
to such outstanding Registrable Securities, and (iii) an Opinion of Counsel to
the effect that such supplemental indenture has been duly authorized and
executed by such person and constitutes the legal, valid and binding obligation
of such person (subject to such customary assumptions and exceptions as may be
acceptable to the Trustee in its reasonable discretion).
(c) If an officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates a Security on which this
Guarantee is endorsed, such Guarantee shall be valid nevertheless.
Section 1416. Guarantee Subordinate to Guarantor Senior Indebtedness.
------------------------------------------------------
Each Guarantor covenants and agrees, and each Holder of a Guarantee,
by his acceptance thereof, likewise covenants and agrees, that, to the extent
and in the manner hereinafter set forth in this Article, the Indebtedness
represented by the Guarantees is hereby expressly made subordinate and subject
in right of payment as provided in this Article to the prior payment in full of
all Guarantor Senior Indebtedness; provided, however, that the Indebtedness
represented by this Guarantee in all respects
158
shall rank equally with, or prior to, all existing and future Indebtedness of
such Guarantor that is expressly subordinated to such Guarantor's Guarantor
Senior Indebtedness.
This Article Fourteen shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold Guarantor Senior Indebtedness; and such provisions are made for the benefit
of the holders of Guarantor Senior Indebtedness; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
Section 1417. Payment Over of Proceeds Upon Dissolution of the Guarantor,
-----------------------------------------------------------
etc.
----
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any Guarantor, whether voluntary or involuntary, or whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshaling of assets or liabilities of any Guarantor,
then and in any such event:
(1) the holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full of all amounts due on or in respect of all Guarantor
Senior Indebtedness before the Holders of the Securities are entitled to receive
any payment or distribution of any kind or character (excluding securities of
any Guarantor as reorganized or readjusted or Securities of such Guarantor or
any other corporation provided for by a plan of reorganization or readjustment
the payment of which are subordinated in right of payment to all Guarantor
Senior Indebtedness that may be outstanding, at least to the same extent as, or
to a greater extent than, the Guarantees are so subordinated as provided in this
Article ("Permitted Guarantor Junior Securities")) on account of the Guarantee
of such Guarantor (other than amounts previously set aside with the Trustee, or
payments previously made, in either case, pursuant to the provisions of Sections
402 and 403 of this Indenture); and
(2) any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities (excluding Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Guarantor Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Guarantor Senior Indebtedness held or
represented by
159
each, to the extent necessary to make payment in full of all Guarantor Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of any Guarantor of any kind or character,
whether in cash, property or securities (excluding Permitted Guarantor Junior
Securities), in respect of the Guarantee of such Guarantor or on account of the
purchase, redemption, defeasance or other acquisition of, or in respect of, the
Guarantee of such Guarantor (other than amounts previously set aside with the
Trustee, or payments previously made, in either case, pursuant to Sections 402
and 403 of this Indenture) before all Guarantor Senior Indebtedness is paid in
full, then and in such event such payment or distribution (excluding Permitted
Guarantor Junior Securities) shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payments or distributions of assets of such Guarantor for
application to the payment of all Guarantor Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Guarantor Senior Indebtedness in full
after giving effect to any concurrent payment or distribution to or for the
holders of Guarantor Senior Indebtedness; and
(4) the Trustee shall execute and deliver to any Senior
Representative all such further instruments as shall be reasonably requested
confirming the subordination of the Guarantees pursuant to this Article
Fourteen.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another Person or the liquidation or dissolution of any
Guarantor following the sale, assignment, conveyance, transfer, lease or other
disposal of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of such
Guarantor for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by sale, assignment, conveyance, transfer, lease or other disposal of
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, agrees to be bound by the subordination
provisions contained in Article Fourteen of this Indenture and each of the
conditions set forth in Section 801 (as in effect on the date hereof) shall have
been satisfied in full.
160
Section 1418. Default on Guarantor Senior Indebtedness.
----------------------------------------
(a) Upon the maturity of any Guarantor Senior Indebtedness by lapse
of time, acceleration or otherwise, all principal thereof and interest thereon
and other amounts due in connection therewith shall first be paid in full or
such payment duly provided for before any payment is made by any of the
Guarantors or any Person acting on behalf of any of the Guarantors in respect of
the Guarantee of such Guarantor.
(b) No payment or distribution of any assets of any Guarantor of any
kind or character (excluding Permitted Guarantor Junior Securities) shall be
made by any Guarantor in respect of its Guarantee during the period in which
Section 1417 shall be applicable, during any suspension of payments in effect
under Section 1303(a) of this Indenture or during any Payment Blockage Period in
effect under Sections 1303(b) and (c) of this Indenture.
(c) In the event that, notwithstanding the foregoing, any Guarantor
shall make any payment or distribution of any assets of any Guarantor of any
kind or character (excluding Permitted Guarantor Junior Securities) to the
Trustee or the Holder of its Guarantee prohibited by the foregoing provisions of
this Section, then and in such event such payment shall be held in trust for the
holders of Senior Indebtedness and paid over and delivered forthwith to the
representatives of the holders of the Guarantor Senior Indebtedness or as a
court of competent jurisdiction shall direct.
Section 1419. Payment Permitted by Each of the Guarantors if No Default.
---------------------------------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent any Guarantor, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding-up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of such Guarantor referred to in Section 1417 or under the
conditions described in Section 1418, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 1420. Subrogation to Rights of Holders of Guarantor Senior
----------------------------------------------------
Indebtedness.
------------
After the payment in full of all Guarantor Senior Indebtedness, the
Holders of the Securities shall be subrogated to the rights of the holders of
such Guarantor Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Guarantor Senior Indebtedness
until the principal of, premium, if any, and interest on, the Securities shall
be paid in full. For purposes of such subrogation, no payments or distributions
to the holders of Guarantor Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the
161
provisions of this Article to the holders of Guarantor Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as among any Guarantor, its
creditors other than holders of Guarantor Senior Indebtedness, and the Holders
of the Securities, be deemed to be a payment or distribution by such Gurantor to
or on account of the Guarantor Senior Indebtedness.
Section 1421. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of Sections 1416 through 1429 of this Indenture are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Guarantor Senior
Indebtedness on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall (a) impair, as
among any Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of the Securities, the obligation of such
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on, the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against each of the Guarantors of the Holders
of the Securities and creditors of each of the Guarantors other than the holders
of Guarantor Senior Indebtedness; or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Guarantor Senior Indebtedness (1) in any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Guarantors referred to in Section 1417, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 1418, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 1418(c).
Section 1422. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of any Guarantor whether in bankruptcy,
insolvency, receivership proceedings, or otherwise, the timely filing of a claim
for the unpaid balance of the indebtedness of any Guarantor owing to such Holder
in the form required in such proceedings and the causing of such claim to be
approved.
162
Section 1423. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Guarantor Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such holder
or any Senior Representative, or by any non-compliance by any Guarantor with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof any such holder may have or be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section, the holders of Guarantor Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Trustee or the Holders of
the Securities, without incurring responsibility to the Holders of the
Securities and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(1) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which Guarantor Senior Indebtedness
is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Guarantor Senior Indebtedness; (3)
release any Person liable in any manner for the collection or payment of
Guarantor Senior Indebtedness; (4) exercise or refrain from exercising any
rights against any of the Guarantors and any other Person; and (5) sell, assign
or transfer the Guarantor Senior Indebtedness to any Person; provided, however,
that in no event shall any such actions limit the right of the Holders of the
Securities to take any action to accelerate the maturity of the Securities
pursuant to Article Five of this Indenture or to pursue any rights or remedies
hereunder or under applicable laws if the taking of such action does not
otherwise violate the terms of this Article.
Section 1424. Notice to Trustee by Each of the Guarantors.
-------------------------------------------
(a) Each Guarantor shall give prompt written notice to the Trustee of
any fact known to such Guarantor which would prohibit the making of any payment
to or by the Trustee in respect of the Guarantee. Notwithstanding the
provisions of this Article or any other provision of this Indenture, the Trustee
shall not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from any Guarantor or a holder of Guarantor Senior Indebtedness or any
trustee, fiduciary or agent therefor; and, prior to the receipt of any such
written notice, the Trustee shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
the notice provided for in
163
this Section by Noon, Eastern Time, on the Business Day prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of, premium, if
any, or interest on any Security), then, anything herein contained to the
contrary notwithstanding but without limiting the rights and remedies of the
holders of Guarantor Senior Indebtedness or any trustee, fiduciary or agent
thereof, the Trustee shall have full power and authority to receive such money
and to apply the same to the purpose for which such money was received and shall
not be affected by any notice to the contrary which may be received by it after
such date; nor shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition preventing any such
payment unless and until the Trustee shall have received an Officers'
Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and each Guarantor by a Person which represents
itself as a representative of one or more holders of Guarantor Senior or a
holder of Guarantor Senior Indebtedness (or a trustee, fiduciary or agent
therefor) to establish that such notice has been given by a representative of or
a holder of Guarantor Senior Indebtedness (or a trustee, fiduciary or agent
therefor); provided, however, that failure to give such notice to the Company or
any Guarantor shall not affect in any way the ability of the Trustee to rely on
such notice. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1425. Reliance on Judicial Orders or Certificates.
-------------------------------------------
Upon any payment or distribution of assets of any Guarantor referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other indebtedness of such Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article,
164
provided that the foregoing shall apply only if such court has been fully
apprised of the provisions of this Article.
Section 1426. Rights of Trustee as a Holder of Guarantor Senior
-------------------------------------------------
Indebtedness; Preservation of Trustee's Rights.
----------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Guarantor Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Guarantor Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 607.
Section 1427. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1426 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1428. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to Article Five of this Indenture or to pursue any
rights or remedies hereunder or under applicable law, subject to the rights, if
any, under this Article of the holders, from time to time, of Guarantor Senior
Indebtedness to receive the cash, property or securities receivable from any
Guarantor upon the exercise of such rights or remedies.
Section 1429. Trustee's Relation to Guarantor Senior Indebtedness.
---------------------------------------------------
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Article against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and the Trustee shall not be liable to any holder of Guarantor
Senior Indebtedness if it shall in good faith mistakenly (absent negligence or
willful misconduct) pay over or deliver to Holders, the Company or any other
Person
165
moneys or assets to which any holder of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article or otherwise.
* * *
166
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
THE MAXIM GROUP, INC.
By: /s/ X.X. Xxxxxx
-------------------------------
Name: X. X. Xxxxxx
Title: President and
Chief Executive Officer
Attest: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
IMAGE INDUSTRIES, INC.
By: /s/ H. Xxxxxxx Xxxxxxx
-------------------------------
Name: H. Xxxxxxx Xxxxxxx
Title: President
Attest: /s/ Xxx Xxxxxx
------------------------------
Name: Xxx Xxxxxx
Title: Assistant Secretary
KINNAIRD & XXXXXXX INTERIORS, INC.
KINNAIRD & XXXXXXX DRAPERY CO., INC.
FIRST QUALITY, INC.
XXXXX XXXXXXXX INTERIORS &
ASSOCIATES, INC.
BAY AREA CARPETS, INC.
CARPET WORLD, INC.
RNA ENTERPRISES, INC.
XXXXXX CARPETS & FLOORS, INC.
RUGS N REMNANTS, INC.
CARPET GALLERY, INC. (GEORGIA)
LOSANTVILLE CARPET OUTLET, INC.
AMERICAN CARPETS & INTERIORS, INC.
CARPET COUNTRY, INC.
CARPETMAX OF NEW MEXICO, INC.
CARPETMAX ALABAMA CONTRACT, INC.
By:/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Attest:/s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
MAXIM RETAIL GROUP, INC.
By:/s/ Xxxx Xxxx
---------------------------------
Name: Xxxx Xxxx
Title: President
Attest:/s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
INVESTOR MANAGEMENT, INC.
By:/s/ X.X. Xxxxxx
------------------------------
Name: X.X. Xxxxxx
Title: President
Attest:/s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Assistant Secretary
TRI-R OF ORLANDO, INC.
CARPETMAX OF PALM BEACH, INC.
CARPETMAX OF CHARLOTTE, INC.
CLOUD CARPETS, INC.
MAXIM EQUIPMENT LEASING
COMPANY, INC.
By:/s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
Title: President
Attest:/s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
CREDITMAX CORP.
By:/s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
Title: President
Attest:/s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Secretary
GCO, INC.
GCO CARPET OUTLET, INC.
XXXXXX & XXXXXXX CARPETMAX
OF TENNESSEE, INC.
By:/s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
Title: Chief Executive Officer
Attest:/s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
CARPETMAX, L.P.
By: The Maxim Group, Inc., as
General Partner
By:/s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
Title: President and Chief
Executive
Officer
Attest:/s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By:/s/ Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Attest:/s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Secretary
STATE OF GEORGIA )
-------------
) ss.:
COUNTY OF XXXX )
------------
On the 16th day of October, 1997, before me personally came A.J.
----
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that he
resides at 0000 Xxxxxxx Xxxxx, Xxxxxxx, Xxxxxxx; that he is (i) President and
Chief Executive Officer of The Maxim Group, Inc., (ii) President of each of
Investor Management, Inc., Tri-R of Orlando, Inc., CarpetMAX of Palm Beach,
Inc., CreditMAX Corp., CarpetMAX of Charlotte, Inc., Cloud Carpets, Inc.,
Maxim Equipment Leasing Company, Inc., (iii) Chief Executive Officer of GCO,
Inc., GCO Carpet Outlet, Inc., Xxxxxx & Xxxxxxx CarpetMAX of Tennessee, Inc.,
(iv) President and Chief Executive Officer of The Maxim Group, Inc., the
general partner of CarpetMAX, L.P and (v) that he signed his name thereto
pursuant to authority of the Board of Directors of each such corporation.
(NOTARIAL
SEAL)
/s/ Zenith Xxxxx Xx Xxxx
----------------------------------
Notary Public, Xxxx County, Georgia
My Commission Expires June 28, 0000
XXXXX XX XXXXXXX )
-----------
) ss.:
COUNTY OF XXXX )
-----------
On the 16th day of October, 1997, before me personally came Xxxxxx X.
----
Xxxxxxx to me known, who, being by me duly sworn, did depose and say that he
resides at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxx; that he is President of
each of, Kinnaird & Xxxxxxx Interiors, Inc., Kinnaird & Xxxxxxx Drapery Co.,
Inc., First Quality, Inc., Xxxxx Xxxxxxxx Interiors & Associates, Inc., Bay
Area Carpets, Inc., Carpet World, Inc., RNA Enterprises, Inc., Xxxxxx Carpets
& Floors, Inc., Rugs N Remnants, Inc., Carpet Gallery, Inc. (Georgia),
Losantville Carpet Outlet, Inc., American Carpets & Interiors, Inc., Carpet
Country, Inc., CarpetMAX Of New Mexico, Inc., CarpetMAX Alabama Contract, Inc.
and that he signed his name thereto pursuant to authority of the Board of
Directors of each such corporation.
(NOTARIAL
SEAL)
/s/ Zenith Xxxxx Xx Xxxx
----------------------------------
Notary Public, Xxxx County, Georgia
My Commission Expires June 28, 0000
XXXXX XX XXXXXXX )
-----------
) ss.:
COUNTY OF XXXX )
-----------
On the 16th day of October, 1997, before me personally came X. Xxxxxxx
----
Xxxxxxx, to me known, who, being by me duly sworn, did depose and say that he
resides at 000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx; that he is President of Image
Industries, Inc., and that he signed his name thereto pursuant to authority of
the Board of Directors of such corporation.
(NOTARIAL
SEAL)
/s/ Zenith Xxxxx Xx Xxxx
----------------------------------
Notary Public, Xxxx County, Georgia
My Commission Expires June 28, 0000
XXXXX XX XXXXXXX )
-------------
) ss.:
COUNTY OF XXXX )
----------
On the 16th day of October, 1997, before me personally came Xxxx Xxxx,
----
to me known, who, being by me duly sworn, did depose and say that he resides at
0000 Xxxxxxx Xxxxx, Xxxxxxxxx, XXX 00000; that he is President of Maxim Retail
----------------------------------------
Group, Inc., and that he signed his name thereto pursuant to authority of the
Board of Directors of such corporation.
(NOTARIAL
SEAL)
/s/ Zenith Xxxxx Xx Xxxx
----------------------------------
Notary Public, Xxxx County, Georgia
My Commission Expires June 28, 0000
XXXXX XX XXX XXXX )
--------------
) ss.:
COUNTY OF NEW YORK )
--------------
On the 16th day of October, 1997, before me personally came Xxxxx
---- -----
Xxxxxx, to me known, who, being by me duly sworn, did depose and say that she
------
resides at 00 Xxxxxxxx Xx., Xxxx Xxxxxxxx, XX00000; that she is Vice President
of State Street Bank and Trust Company, a Massachusetts trust company described
in and which executed the foregoing instrument; and that she signed her name
thereto pursuant to authority of the Board of Directors of such corporation.
(NOTARIAL
SEAL)
/s/ XXXXXX X. XXXXXXXXX
-------------------------------
XXXXXX X. XXXXXXXXX
Notary Public State of New York
No. 02SC5008681
Qualified in New York County
Commission Expires 02/22/99
SCHEDULE I
EXISTING INDEBTEDNESS
A. LONG TERM DEBT:
Note payable to former owner in monthly installments of $315.30 including
interest at 10.00% due November 1, 2000.
(Carpet World)
Note payable to former shareholder (X. Xxxxx'x mother) with interest only
at 8.00% due and payable until paid out on demand. Unsecured.
(Carpet World)
Note payable to former shareholder (X. Xxxxx'x father) with interest only
at 8.00% due and payable until paid out on demand. Unsecured.
(Carpet World)
Note payable to bank payable in monthly installments of $550.24 including
interest, at 9.26% with final payment due September 30, 1998, secured by
vehicle.
(Carpet World)
Note payable to bank payable in monthly installments of $10,221.00 plus
interest at prime, secured by vehicles, due on dates from July 1997 to
March 1998.
(Kinnaird & Xxxxxxx)
Note payable to Vangard payable in monthly installments of $200.00
including interest at 9.55%, secured by copier, with final payment due
June 2000.
(Kinnaird & Xxxxxxx)
Note payable to bank payable in monthly installments of $197.00 including
interest, at 6.60%, due August 15, 1998, secured by equipment.
(National Carpet Brokers)
Note payable to Fed CU payable in monthly installments of $337.00 including
interest, at 7.9%, due April 17, 1999, secured by vehicle.
(National Carpet Brokers)
Note payable to bank payable in monthly installments of $243.00 including
interest, at 6.5% due February 1998, secured by vehicle.
(Xxxxx Xxxxxxxx Interiors)
Note payable to bank payable in monthly installments of $796.15 including
interest, at 7.75% secured by building with final payment due April 1998.
(American Carpet Interiors)
Note payable to bank payable in monthly installments of $833.00 including
interest at prime plus 1%, secured by a building with final payment due
January 1998.
(American Carpet Interiors)
Note payable to bank payable in monthly installments of $811.43 including
interest at 9.5% secured by vehicle with final payment due October 1997.
(CarpeTime)
Note payable to Credit Union payable in monthly installments of $555.00
including interest, at 7.2%, secured by vehicle with final payment due
April 1998.
(CarpeTime)
Note payable to bank payable in monthly installments of $811.43 including
interest at 9.5%, secured by vehicle with final payment due March 2000.
(Nevada)
Note payable to bank payable in monthly installments of $811.43 including
interest, at 9.5% secured by vehicle with final payment due March 2000.
(Nevada)
Note payable to bank payable in monthly installments of $703.11 including
interest, at 7.92% secured by vehicle with final payment due October
1997.
(Image)
Note payable to First American National Bank payable in monthly
installments of $455.70 including interest at 7.95%, with final payment
due September 15, 1999, secured by vehicle.
(Xxxxxx)
Note payable to previous owner, Xx. Xxxxxxxxx, payable in three annual
installments of $53,333.33, with final payment due FY 2000.
(New Mexico)
Credit Agreement dated as of August 26, 1997 (as amended on September 24,
1997) by and among the Company and its subsidiaries as co-borrowers, and
First Union National Bank, NationsBank, N.A., Fleet National Bank and the
other lenders named therein ($130 million). (Maxim Corporate)
Loan Agreement dated as of September 1, 1997 by and between Image
Industries, Inc. and the Development Authority of the City of
Summerville, Georgia ($30 million). (Image)
2
B. CAPITAL LEASES:
--------------
TOTAL LEASE
PAYMENTS AS OF
LOCATION NAME COMPANY LANDLORD JANUARY 31, 1997
------------- ------- -------- -----------------
Phone System, Shelving B&R Kennesaw Leasing $ 42,038
Showroom Display B&R Kennesaw Leasing 42,046
Folklift Cpt Wld Xxxxxxx Bank 11,191
RFMS Software Cpt Wld Xxxx Commercial 1,636
Cutting Machine Cpt Wld AT&T Corp. 10,511
Cutting Machine Cpt Wld AT&T Corp. 4,847
Cutting Machine XxXxxx EZ Cut 1,610
Folklift XxXxxx Safeline 22,886
Satellite GCO 6,966
Summerville Manufacturing Image City of Summerville 613,064
Equipment
Forklift Image Kalmar 2,199
Printer & Phone Equipment Image NationsBank 16,595
Telephone Equipment Image AT&T 2,952
Telephone Equipment Image IBM 11,229
Two Forklifts Image NationsBank 118,511
Copier NCB Ikon Capital 4,198
Pathfinder Cpt Wld Shareholder 13,497
Van Cpt Wld Shareholder 1,600
Real Property Lease - Madison K&F FKBC 86,625
Real Property Lease - Poplar K&F FKBC 494,950
Level Rd
Real Property Lease - K&F FKBC 174,075
Clarksville
Real Property Lease - Lexington K&F Shareco 1,170,000
3
C. LETTERS OF CREDIT
-----------------
LOC NUMBER LOC AMOUNT MATURITY DATE
---------- ---------- -------------
XXXX00000000 375,000.00 8/26/2000
XXXX00000000 1,125,000.00 8/26/2000
LCS000130879 30,616,438.36 8/15/2000
4
SCHEDULE II
Dividend and Other Payment Restrictions
Affecting Subsidiaries
1. The Credit Agreement, dated as of August 26, 1997, by the among the
Company, the Subsidiaries of the Company, First Union National Bank, as
Administrative Agent, NationsBank, N.A., as Documentation Agent, and Fleet
National Bank, as Co-Agent, as amended, restated and supplemented from time
to time (the "Credit Agreement").
2. The Loan Documents (as such term is defined in the Credit Agreement).
3. The Security Documents (as such term is defined in the Credit Agreement),
together with any other security agreements, mortgages, pledge agreements,
assignments and financing statements now or hereafter entered into or
provided by the Company and the Subsidiaries for the benefit of, and to
secure the obligations of the Company and the Subsidiaries to, the Lenders
(as such term is defined in the Credit Agreement).
EXHIBIT A
---------
INTERCOMPANY NOTE
-----------------
___________ , 19_______
Evidences of all loans or advances ("Loans") made hereunder shall be
reflected on the grid attached hereto. FOR VALUE RECEIVED, ______________, a
________________ corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to
the order of ________________ (the "Holder") the principal sum of the aggregate
unpaid principal amount of all Loans (plus accrued interest thereon) at any time
and from time to time made hereunder which has not been previously paid.
All capitalized terms used herein that are defined in, or by reference
in, the Indenture among The Maxim Group, Inc., a Delaware corporation (the
"Company"), the Guarantors listed therein and State Street Bank and Trust
Company, as trustee, dated as of October 16, 1997 (the "Indenture"), have the
meanings assigned to such terms therein, or by reference therein, unless
otherwise defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Not Forgivable. Unless the Maker of the Loan
--------------------
hereunder is the Company or any Guarantor, the Holder may not forgive any
amounts owing under this intercompany note.
Section 1.02 Interest: Prepayment. (a) The interest rate ("Interest
---------------------
Rate") on the Loans shall be a rate per annum reflected on the grid attached
hereto.
(b) The interest, if any, payable on each of the Loans shall accrue from
the date such Loan is made and, subject to Section 2.01, shall be payable upon
demand of the Holder.
(c) If the principal or accrued interest, if any, of the Loans is not
paid on the date demand is made, interest on the unpaid principal and interest
will accrue at a rate equal to the Interest Rate, if any, plus 100 basis points
per annum from maturity until the principal and interest on such Loans are fully
paid.
(d) Subject to Section 2.01, any amounts hereunder may be repaid at any
time by the Maker.
Section 1.02 Subordination. All Loans made to the Company or any
-------------
Guarantor shall be subordinated in right of payment to the payment and
performance of the obligations of the Company, the Guarantors and any Restricted
Subsidiary under the Indenture, the Securities, the Guarantees or any other
Indebtedness ranking senior to or pari passu with the Securities or the
Guarantees, including, without limitation, any Indebtedness incurred under the
Revolving
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Credit Agreements; provided, that with respect to a Subsidiary in any specific
instance, such Restricted Subsidiary is also an obligor under the Indenture, the
Securities, the Guarantees or such other senior or pari passu Indebtedness, as
the case may be, whether as a borrower, guarantor or pledgor of collateral.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01 Events of Default. If after the date of issuance of this
-----------------
Loan (i) an Event of Default has occurred under the Indenture, (ii) an Event of
Default (as defined) has occurred under either of the Revolving Credit
Agreements or any refinancing of the Revolving Credit Agreements or (iii) an
"event of default" (as defined) has occurred under any other Indebtedness of the
Company or any Guarantor, then (x) in the event the Maker is not either one of
the Company or a Guarantor, all amounts owing under the Loans hereunder shall be
immediately due and payable to the Holder, and (y) in the event the Maker is
either the Company or a Guarantor, the amounts owing under the Loans hereunder
shall not be due and payable; provided, however, that if such Event of Default
or event of default has been waived, cured or rescinded, such amounts shall no
longer be due and payable in the case of clause (x), and such amounts may be
payable in the case of clause (y). If the Holder is a Subsidiary, then the
Holder hereby agrees that if it receives any payments or distributions on any
Loan from the Company or a Guarantor which is not payable pursuant to clause (y)
of the prior sentence after any Event of Default or event of default described
in clauses (i), (ii) or (iii) above has occurred, is continuing and has not been
waived, cured or rescinded, it will pay over and deliver forthwith to the
Company or such Guarantor, as the case may be, all such payments and
distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any provision
----------------
of this intercompany note, or consent to depart herefrom is permitted at any
time for any reason, except with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities.
Section 3.02 Assignment. No party to this Agreement may assign, in
----------
whole or in part, any of its rights and obligations under this intercompany
note, except to its legal successor in interest.
Section 3.03 Third Party Beneficiaries. The holders of the Securities
-------------------------
or any other Indebtedness ranking pari passu with or senior to, the Securities
or any Guarantees, including without limitation, any Indebtedness incurred under
the Credit Facility, shall be third party beneficiaries to this intercompany
note and upon an Event of Default shall have the right to enforce this
intercompany note against the Company or any of its Subsidiaries.
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Section 3.04 Headings. Article and Section headings in this
--------
intercompany note are included for convenience of reference only and shall not
constitute a part of this intercompany note for any other purpose.
Section 3.05 Entire Agreement. This intercompany note sets forth the
----------------
entire agreement of the parties with respect to its subject matter and
supersedes all previous understandings, written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
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Section 3.07 Waivers. The Maker hereby waives presentment, demand for
-------
payment, notice of protest and all other demands and notices in connection with
the delivery, acceptance, performance or enforcement hereof.
By:_______________________
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BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount of Maturity of Amount
Borrowing/ Borrowing/ Principal Paid Unpaid Principal Notation
Date Principal Principal or Prepaid Balance Made by
---- ---------- ----------- -------------- ---------------- --------
A-5
Exhibit B
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Rule 144(k)
________________________
________________, _____
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporation Trust Department
Re: The Maxim Group, Inc. (the "Company")
9 1/4% Senior Subordinated Notes due 2007, Series A (the "Securities")
----------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Rule 144(k) under the Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) a period of at least two years has elapsed since the later of the
date the Securities were acquired from the Company or from an Affiliate (as
defined in Rule 144 under the Securities Act) of the Company; and
(2) the undersigned is not and has not been during the preceding three
months an Affiliate (as defined in Rule 144 under the Securities Act) of
the Company.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in the Indenture dated October 16, 1997 among the Company,
the Guarantors named therein and State Street Bank and Trust Company as trustee.
Very truly yours,
[Name of Transferor]
By: ___________________________
Authorized Signature
B-1
Exhibit C
---------
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
________________________
________________, _____
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Corporation Trust Department
Re: The Maxim Group, Inc. (the "Company")
9 1/4% Senior Subordinated Notes due 2007 (the "Securities")
------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) 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 (b) 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;
(3) 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
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933, as amended.
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
C-1
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 Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ___________________________
Authorized Signature
C-2
APPENDIX I
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.
-----------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
--------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
--------------------------------------------------------------------------------
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES FOR SERIES A SECURITIES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Security occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
October 16, 1999, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[_] (a) this Security is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
or
--
I-1
[_] (b) this Security is being transferred other than in accordance with
(a) above and documents are being furnished which comply with the
conditions of transfer set forth in this Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Security
Registrar shall not be obligated to register this Security 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 to this assignment
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: _____________________________
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15]
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Security
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
Company 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.
Dated:__________________ _________________________________________________
NOTICE: To be executed by an authorized signatory
I-2
APPENDIX II
FORM OF TRANSFEREE CERTIFICATE
I or we assign and transfer this Security to:
--------------------------------------------
Please insert social security or other identifying number of assignee
---------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
Print or type name, address and zip code of assignee and irrevocably appoint
________________________________________________________________
[Agent], to transfer this Security on the books of the Company. The Agent may
substitute another to act for him.
Dated ____________________ Signed ________________________________
(Sign exactly as name appears on the other side of this Security)
[Signature must be guaranteed by an eligible Guarantor Institution (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved guarantee medallion program pursuant to Securities and Exchange
Commission Rule 17 Ad-15]
