EXHIBIT 4.9
BALLY TOTAL FITNESS HOLDING CORPORATION
AND
U.S. BANK TRUST NATIONAL ASSOCIATION,
AS TRUSTEE
INDENTURE
DATED AS OF DECEMBER 16, 1998
$300,000,000
9-7/8% SENIOR SUBORDINATED NOTES DUE 2007
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions................................................... 1
Section 1.2. Other Definitions.............................................18
Section 1.3. Compliance Certificates and Opinions..........................18
Section 1.4. Form of Documents Delivered to Trustee........................19
Section 1.5. Acts of Holders...............................................20
Section 1.6. Notices, etc., to Trustee and the Company.....................20
Section 1.7. Notice to Holders; Waiver.....................................21
Section 1.8. Conflict with Trust Indenture Act.............................21
Section 1.9. Effect of Headings and Table of Contents......................21
Section 1.10. Successors and Assigns........................................21
Section 1.11. Separability Clause...........................................21
Section 1.12. Benefits of Indenture.........................................21
Section 1.13. Governing Law.................................................22
Section 1.14. Legal Holidays................................................22
Section 1.15. Schedules.....................................................22
Section 1.16. Counterparts..................................................22
Section 1.17. No Recourse against Others....................................22
ARTICLE II
SECURITY FORMS...............................22
Section 2.1. Forms Generally...............................................22
Section 2.2. Form of Face of Security......................................23
Section 2.3. Form of Reverse of Securities.................................34
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms...............................................40
Section 3.2. Denominations.................................................41
Section 3.3. Execution, Authentication, Delivery and Dating................41
Section 3.4. Temporary Securities..........................................42
Section 3.5. Registration, Registration of Transfer and Exchange...........42
Section 3.6. Book-Entry Provisions for Global Securities...................44
Section 3.7. Special Transfer Provisions...................................45
Section 3.8. Mutilated, Destroyed, Lost and Stolen Securities..............45
Section 3.9. Payment of Interest; Interest Rights Preserved................46
Section 3.10. CUSIP Numbers.................................................46
Section 3.11. Persons Deemed Owners.........................................47
Section 3.12. Cancellation..................................................47
Section 3.13. Computation of Interest.......................................47
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.1. Company's Option to Effect Defeasance or Covenant
Defeasance....................................................47
Section 4.2. Defeasance and Discharge......................................47
Section 4.3. Covenant Defeasance...........................................48
Section 4.4. Conditions to Defeasance or Covenant Defeasance...............48
Section 4.5. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions......................50
Section 4.6. Reinstatement.................................................50
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ARTICLE V
REMEDIES
Section 5.1. Events of Default.............................................51
Section 5.2. Acceleration of Maturity; Rescission and Annulment............52
Section 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee....................................................53
Section 5.4. Trustee May File Proofs of Claim..............................53
Section 5.5. Trustee May Enforce Claims without Possession of
Securities....................................................54
Section 5.6. Application of Money Collected................................54
Section 5.7. Limitation on Suits...........................................54
Section 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest..........................................55
Section 5.9. Restoration of Rights and Remedies............................55
Section 5.10. Rights and Remedies Cumulative................................55
Section 5.11. Delay or Omission Not Waiver..................................55
Section 5.12. Control by Holders............................................56
Section 5.13. Waiver of Past Defaults.......................................56
Section 5.14. Undertaking for Costs.........................................56
Section 5.15. Waiver of Stay, Extension or Usury Laws.......................56
Section 5.16. Remedies Subject to Applicable Law............................57
ARTICLE VI
THE TRUSTEE
Section 6.1. Duties of Trustee.............................................57
Section 6.2. Notice of Defaults............................................58
Section 6.3. Certain Rights of Trustee.....................................58
Section 6.4. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.................59
Section 6.5. Trustee and Agents May Hold Securities; Collections; etc......59
Section 6.6. Money Held in Trust...........................................60
Section 6.7. Compensation and Indemnification of Trustee and Its
Prior Claim...................................................60
Section 6.8. Conflicting Interests.........................................60
Section 6.9. Trustee Eligibility...........................................60
Section 6.10. Resignation and Removal; Appointment of Successor Trustee.....61
Section 6.11. Acceptance of Appointment by Successor........................62
Section 6.12. Merger, Conversion, Consolidation or Succession to
Business......................................................62
Section 6.13. Preferential Collection of Claims Against Company.............63
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.....63
Section 7.2. Disclosure of Names and Addresses of Holders..................63
Section 7.3. Reports by Trustee............................................63
Section 7.4. Reports by Company............................................64
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 8.1. Company May Merge, Consolidate, etc., Only on Certain Terms...64
Section 8.2. Successor Substituted.........................................65
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures and Agreements without Consent
of Holders...................................................65-
Section 9.2. Supplemental Indentures and Agreements with Consent
of Holders....................................................66
Section 9.3. Execution of Supplemental Indentures and Agreements...........67
Section 9.4. Effect of Supplemental Indentures.............................67
Section 9.5. Conformity with Trust Indenture Act...........................67
Section 9.6. Reference in Securities to Supplemental Indentures............67
Section 9.7. Notice of Supplemental Indentures.............................68
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest....................68
Section 10.2. Maintenance of Office or Agency...............................68
Section 10.3. Money for Security Payments to Be Held in Trust...............68
Section 10.4. Corporate Existence...........................................69
Section 10.5. Payment of Taxes and Other Claims.............................70
Section 10.6. Maintenance of Properties.....................................70
Section 10.7. Insurance.....................................................70
Section 10.8. Limitation on Indebtedness....................................70
Section 10.9. Limitation on Restricted Payments.............................71
Section 10.10. Limitation on Transactions with Affiliates....................74
Section 10.11. Limitation on Liens...........................................74
Section 10.12. Limitation on Sale of Assets..................................75
Section 10.13. Purchase of Securities upon a Change of Control...............76
Section 10.14. Limitation on Preferred Stock of Subsidiaries.................78
Section 10.14A. Limitation on Senior Subordinated Indebtedness................78
Section 10.15. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries........................................79
Section 10.16. Limitations on Unrestricted Subsidiaries......................79
Section 10.17. Provision of Financial Statements.............................79
Section 10.18. Statement by Officers as to Default...........................80
Section 10.19. Waiver of Certain Covenants...................................80
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Rights of Redemption..........................................80
Section 11.2. Applicability of Article......................................81
Section 11.3. Election to Redeem; Notice to Trustee.........................81
Section 11.4. Selection by Trustee of Securities to Be Redeemed.............81
Section 11.5. Notice of Redemption..........................................81
Section 11.6. Deposit of Redemption Price...................................82
Section 11.7. Securities Payable on Redemption Date.........................82
Section 11.8. Securities Redeemed or Purchased in Part......................83
ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.1. Satisfaction and Discharge of Indenture.......................83
Section 12.2. Application of Trust Money....................................84
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ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Indebtedness.................84
Section 13.2. Payment Over of Proceeds Upon Dissolution, etc................84
Section 13.3. Suspension of Payment When Designated Senior Indebtedness
in Default....................................................86
Section 13.4. Payment Permitted if No Default...............................87
Section 13.5. Subrogation to Rights of Holders of Senior Indebtedness.......87
Section 13.6. Provisions Solely to Define Relative Rights...................87
Section 13.7. Trustee to Effectuate Subordination...........................87
Section 13.8. No Waiver of Subordination Provisions.........................88
Section 13.9. Notice to Trustee.............................................88
Section 13.10. Reliance on Judicial Orders or Certificates...................89
Section 13.11. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights..............................89
Section 13.12. Article Applicable to Paying Agents...........................89
Section 13.13. No Suspensions of Remedies....................................90
Section 13.14. Trustee's Relation to Senior Indebtedness.....................90
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INDENTURE dated as of December 16, 1998 between BALLY TOTAL
FITNESS HOLDING CORPORATION, a Delaware corporation (as more fully defined
below, the "Company"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national
banking association, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
9-7/8% Series C Senior Subordinated Notes due 2007 (the "Series C Securities" or
the "Initial Securities"), and an issue of 9-7/8% Series D Senior Subordinated
Notes due 2007 (the "Series D Securities" or the "Exchange Securities" and,
together with the Series C 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;
Upon the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement (as defined herein), this
Indenture will be subject to, and shall be governed by, the provisions of the
Trust Indenture Act (as defined herein) that are required to be part of and to
govern indentures qualified under the Trust Indenture Act; and
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 and (ii) this
Indenture a valid agreement of the Company 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 I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. 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;
(f) all references herein to particular Sections or Articles refer to
this Indenture unless otherwise so indicated; and
(g) the word "or" is not exclusive and the word "including" means
including without limitation.
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The following terms shall have the meanings set forth in this Section.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Subsidiary or merges with or into the Company or
any 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 Subsidiary or 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 Subsidiary, as the case may be.
"Adjusted Consolidated Interest Expense" of any Person means, without
duplication, for any period, as applied to any Person, the sum of (a) the
interest expense of such Person and its Consolidated Subsidiaries (exclusive of
deferred financing fees and any premiums or penalties paid in connection with
redeeming or retiring any Indebtedness prior to its stated maturity) for such
period, on a Consolidated basis, including without limitation, (i) amortization
of debt discount, (ii) the net cost under interest rate contracts (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 during such period, and (ii) all capitalized interest of
such Person and its Consolidated Subsidiaries, in each case as determined in
accordance with GAAP consistently applied.
"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, 10% or more of such specified Person's Capital
Stock or beneficial equity interest in such Person (if such Person is a real
estate investment trust), 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 10% 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 of Article VIII,
(B) that is by any Subsidiary to the Company or any Wholly Owned Subsidiary in
accordance with the terms of the Indenture, (C) that is of obsolete equipment or
other obsolete assets in the ordinary course of business, (D) that constitutes
the making of a Permitted Investment (other than pursuant to clause (v) of the
definition of "Permitted Investment"), (E) the Fair Market Value of which in the
aggregate does not exceed $1,000,000 in any transaction or series of related
transactions, (F) sales of accounts receivable and other transactions among the
Company and its Subsidiaries pursuant to the Securitization Facility, or (G)
Investments by the Company which comply with the terms of clause (ix) of the
definition of "Permitted Investments".
"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)
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the amount of each such principal payment; by (ii) the sum of all such principal
payments.
"Bank Credit Facility" means the third amended and restated Credit
Agreement, dated as of June 26, 19957, among the Company, the Banks and The
Chase Manhattan Bank, as agent, as such agreement, in whole or in part, may be
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing).
"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, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Banks" means the lenders under the Bank Credit Facility.
"B Indenture" means the Indenture dated October 7, 1997 between the
Company and the Trustee providing for the issuance of the Series B Securities in
the aggregate principal amount of $225,000,000, as such may be amended or
supplemented from time to time.
"Board of Directors" means either the board of directors of the Company
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 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 Security bearing the legend specified in
Section 2.2 evidencing all or part of a series of Securities, authenticated and
delivered to the Depository for such series or its nominee, and registered in
the name of such Depository or nominee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New York
or the city in which the principal office of the Trustee is located are
authorized or obligated by law 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 of the Indenture.
"Cash Equivalents" means: (i) Temporary Cash Investments; (ii)
securities received by the Company or any Subsidiary from the transferee in an
Asset Sale that are promptly converted by the Company or such Subsidiary into
cash; (iii) the assumption of Indebtedness or other obligations or liabilities
of the Company or any Subsidiary in connection with an Asset Sale; and (iv) in
connection with an Asset Sale to a Person where the assets sold, issued,
conveyed, transferred, leased or otherwise disposed of are included in a
business which will be a party to the Franchise Program, the net present value
of payments by such Person pursuant to the Franchise Program as calculated and
certified by the chief financial officer of the Company.
"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
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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 a majority 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 (together with any
new directors whose election to the Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of 66 2/3% of
the directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved), cease for any reason to constitute a majority of such Board of
Directors 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
in Section 10.9 (and such amount shall be treated as a Restricted Payment
subject to the provisions in the Indenture described in Section 10.9) and (B) no
"person" or "group" owns immediately after such transaction, directly or
indirectly, more than a majority 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 in Article VIII.
"Company" means Bally Total Fitness Holding Corporation, a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to the applicable provisions of the 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 (i) any of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of Vice
Presidential designation) or Treasurer, and (ii) any one of its Assistant
Treasurers, its Secretary or any Assistant Secretary, and delivered to the
Trustee, provided, however, that such request or order may be signed by any two
of the officers or directors listed in clause (i) above in lieu of being signed
by one of such officers or directors and one officer pursuant to clause (ii)
above.
"Consolidated Fixed Charge Coverage Ratio" of any Person means, for any
period, the ratio of EBITDA to the sum of Adjusted Consolidated Interest Expense
for such period and cash dividends paid on any Preferred Stock of such Person
during such period; provided that (i) in making such computation, the Adjusted
Consolidated Interest Expense attributable to interest on any Indebtedness shall
be computed on a pro forma basis and (A) where such Indebtedness was outstanding
during the period and bore a floating interest rate, interest 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) where such Indebtedness was not outstanding
during the period for which the computation is being made but which bears, at
the option of the Company, a fixed or floating rate of interest, shall be
computed by applying at the option of the Company, either the fixed or floating
rates and (ii) in making such computation, the Adjusted 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.
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"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 Subsidiaries for such period as determined in accordance
with GAAP.
"Consolidated Net Income (Loss)" of any Person means, for any period,
the Consolidated net income (or loss) of such Person and its 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 (exclusive
of all fees and expenses relating thereto), (ii) the portion of net income (or
loss) of such Person and its 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
Subsidiaries, (iii) net income (or loss) of any Person combined with such Person
or any of its 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) (except for 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 Subsidiary to the extent that the declaration of dividends
or similar distributions by that 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 Subsidiary or its stockholders, (vii)
any gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness of such Person, (viii) transaction costs charged
in connection with the Refinancing, or (ix) amortization of intangible assets of
such Person and its Subsidiaries on a consolidated basis under 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 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).
"Consolidated Tangible Assets" means consolidated total assets of the
Company and its Subsidiaries as reported in the Company's Consolidated balance
sheet from time to time as required by Section 10.17 less (A) (i) any asset
which is treated as an intangible asset in conformity with GAAP (including,
without limitation, leasehold rights, franchise rights, non-compete agreements,
goodwill, unamortized debt discounts, patents, patent applications, trademarks,
trade names, copyrights and licenses), and (ii) any deferred charges determined
in conformity with GAAP (including, without limitation, deferred finance charges
and deferred membership origination costs), plus (B) any treasury stock.
"Consolidation" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its Subsidiaries if and to the extent
the accounts of such Person and each of its 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 Xxxx 0xx
Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Corporate Finance.
"Credit Card Program Guarantee" means the obligation of the Company to
remit funds in excess of the sum of (a) $25,000,000 plus (b) a reserve (of up to
25% of the amount owed to the Company by a member which becomes an obligation
due to the credit card issuer by such member) with respect to the Company's
credit card program pursuant to the Company's Credit Card Program Agreement
dated December 21, 1995, as such agreement, in whole or in part, may be amended,
renewed, extended, substituted,
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refinanced, restructured, replaced, supplemented, or otherwise modified from
time to time (including, without limitation, any successive renewals,
extensions, substitutions, refinancings, restructurings, replacements,
supplementations or other modifications of the foregoing).
"Default" means any event which is, or after notice or passage of any
time or both would be, an Event of Default.
"Depository" 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 Depository 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 Bank Credit Facility and the Securitization
Facility, and (ii) any other Senior Indebtedness which at the time of
determination, has an aggregate principal amount outstanding of at least $15
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 who does not
have any material direct or indirect financial interest in or with respect to
such transaction or series of related transactions.
"EBITDA" means the sum of Consolidated Net Income, Adjusted Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges deducted in computing Consolidated Net Income, in each case, for such
period, of the Company and its Subsidiaries on a Consolidated basis, all
determined in accordance with GAAP consistently applied.
"Event of Default" has the meaning specified in Article V.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, or any successor statute.
"Exchange Offer" means the exchange offer by the Company of Series D
Securities for Series C Securities and Series B 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. Fair Market Value shall be determined
by the Board of Directors acting in good faith and shall be evidenced by a
resolution of the Board of Directors.
"Franchise Program" means the program under which the Company and/or its
Subsidiaries grant franchises to third parties which require franchisees, among
other things, to pay fees to the Company and/or its Subsidiaries, and which,
among other things, grants to the franchisee the right to receive training from
the Company or its Subsidiaries or sell memberships to use facilities of the
franchisee and the Company or its Subsidiaries. The Franchise Program may
include the conversion of facilities owned by the Company or its Subsidiaries to
franchise facilities and includes such a program as it may be amended, renewed,
extended, substituted, restructured, replaced, supplemented or otherwise
modified from time to time (including, without limitation, any successive
renewal, extension, substitution, restructuring, replacement, supplementation or
other modification of the foregoing).
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"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of the B Indenture.
"Global Securities" means one or more securities evidencing all or a
part of the Securities to be issued as Book-Entry Securities issued to the
Depository 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"
contained in this Section 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 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 or
guarantees of operating leases.
"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 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 and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Capital Stock of such Person, or any warrants, rights or options
to acquire such Capital Stock, now or hereafter 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 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, (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, (ix) the Credit Card Program
Guarantee, (x) indebtedness incurred by a real estate investment trust in which
the Company or any Subsidiary has invested pursuant to clause (ix) of the
definition of "Permitted Investments" and as to which, in the event that the
Company controls such trust, any of the Company or any Subsidiary is directly or
indirectly liable (by virtue of the Company or any such Subsidiary being the
primary obligor on, guarantor of, or otherwise liable in respect to, such
indebtedness), and (xi) any amendment, supplement, modification, deferral,
renewal, extension, refunding or refinancing of any liability which constitutes
Indebtedness of the types referred to in clauses (i) through (ix) above. For
purposes hereof, the "maximum fixed
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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
the 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 on the Indenture or under the Securities to pay principal of,
premium, if any, and interest when due and payable, and all other amounts due or
to become due under or in connection with the Indenture, the Securities and the
performance of all other obligations to the Trustee and the holders under the
Indenture and the Securities, according to the terms thereof.
"Initial Purchasers" means Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Xxxxxxxxx & Company, Inc.
"Initial Securities" has the meaning stated in the first recital of this
Indenture.
"Interest Payment Date" means the Stated Maturity of a regular
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 (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 (other than ownership
obtained without making, or becoming liable, directly or indirectly, contingent
or otherwise, for the making of, any advance, loan (or the forgiveness thereof),
payment, extension of credit or capital contribution in connection therewith),
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 any Security, the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in the Indenture, whether at Stated Maturity, the Offer Date, the
Change of Control Purchase Date or the redemption date and whether by
declaration of acceleration, Offer
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in respect of Excess Proceeds, 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 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 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 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 in Section 10.9, 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 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.
"Officers' Certificate" means a certificate signed by any of (i) the
Chairman of the Board, Vice Chairman, President or a Vice President (regardless
of Vice Presidential designation) or Treasurer, and (ii) by any one of its
Assistant Treasurers, its Secretary or any Assistant Secretary, of the Company,
and delivered to the Trustee, provided, however, that such certificate may be
signed by any two of the officers or directors listed in clause (i) above in
lieu of being signed by one of such officers or directors and one officer
pursuant to clause (ii) above.
"Opinion of Counsel" means a written opinion of qualified legal counsel,
who may be counsel for the Company or the Trustee, and who shall be reasonably
acceptable to the Trustee, including but not limited to an Opinion of
Independent Counsel.
"Opinion of Independent Counsel" means a written opinion by qualified
legal counsel who is not an employee or consultant of the Company 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:
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(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) in trust
or set aside and segregated in trust by the Company (if the Company
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 4.2 and
4.3, with respect to which the Company has effected defeasance or
covenant defeasance as provided in Article IV; 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 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, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor on the
Securities or any Affiliate of the Company 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 as to act
with respect to such Securities and that the pledgee is not the Company
or any other obligor on the Securities or any Affiliate of the Company
or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment to the Securities (including, without limitation,
the Series B Securities).
"Paying Agent" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"Permitted Indebtedness" means:
(i) Indebtedness under the Bank Credit Facility in an aggregate
principal amount at any one time outstanding not to exceed $70,000,000,
minus any permanent reductions of the amount outstanding under the Bank
Credit Facility, which reduction is a result of the application of
Section 10.12;
(ii) Indebtedness under the Securitization Facility in an
aggregate amount not to exceed the greater of $160,000,000 or 80% of the
net book value of the consolidated accounts receivable of the Company
and its Subsidiaries, calculated in accordance with GAAP;
(iii) Indebtedness of the Company (a) represented by the
Securities, or (b) that is incurred, in any amount, and in whole or in
part, to (1) redeem all of the Securities outstanding as described
herein, or (2) effect a complete defeasance or a covenant defeasance
thereof as described herein; provided, in either case, that any
Indebtedness incurred under this subclause (b) is actually applied in
accordance with the applicable redemption or defeasance provision of the
Indenture;
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(iv) Indebtedness of the Company under the Series B Securities or
otherwise outstanding on the date of the B Indenture and listed on
Schedule I to the B Indenture;
(v) Indebtedness of the Company owing to a Subsidiary; provided
that any Indebtedness of the Company owing to a Subsidiary is made
pursuant to an intercompany note and is expressly subordinated in right
of payment to the payment and performance of the Company's obligations
under the Securities, and, upon an Event of Default, such Indebtedness
shall not be due and payable until such Event of Default is cured,
waived or rescinded; provided, further, that any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a disposition,
pledge or transfer to a Subsidiary) shall be deemed to be an incurrence
of such Indebtedness by the Company not permitted by this clause (v);
(vi) obligations of the Company entered into in the ordinary
course of business pursuant to Interest Rate Agreements designed to
protect the Company against fluctuations in interest rates in respect of
Indebtedness of the Company as long as such obligations do not exceed
the aggregate principal amount of such Indebtedness then outstanding;
(vii) Indebtedness of the Company represented by Capital Lease
Obligations or Purchase Money Obligations or other Indebtedness incurred
or assumed in connection with the acquisition, improvement 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 and any refinancings of
such Indebtedness made in accordance with subclauses (a), (b) and (c) of
clause (xi) below, in an aggregate principal amount pursuant to this
clause (vii) not to exceed $25,000,000 outstanding at any time; provided
that the principal amount of any Indebtedness permitted under this
clause (vii) did not in each case at the time of incurrence exceed the
cost of the acquired or constructed asset or improvement so financed;
(viii) Indebtedness of the Company in respect of performance
bonds, surety bonds and replevin bonds provided by the Company in the
ordinary course of business;
(ix) other Indebtedness of the Company that does not exceed
$50,000,000 in the aggregate at any one time outstanding;
(x) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or other financial instrument
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within four Business
Days of its incurrence; and
(xi) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebtedness described in clauses (iv) and (v) of this definition of
"Permitted Indebtedness", including any successive refinancings (a) so
long as the borrower under such refinancing is the Company or, if not
the Company, the same as the borrower of the Indebtedness being
refinanced, (b) the aggregate principal amount of Indebtedness
represented thereby as of the date hereof 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, and (c) (A) in the case of any refinancing of Indebtedness
that is Subordinated Indebtedness, such new Indebtedness is made
subordinated to the Securities at least to the same extent as the
Indebtedness being refinanced and (B) in the case of Pari Passu
Indebtedness or Subordinated Indebtedness, as the
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case may be, such refinancing does not reduce the Average Life to Stated
Maturity or the Stated Maturity of such Indebtedness.
"Permitted Investment" means: (i) Investments in any Subsidiary or any
Person which, as a result of such Investment, (a) becomes a 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 Subsidiary; (ii)
Indebtedness of the Company described under clause (v) of the definition of
"Permitted Indebtedness"; (iii) Investments in any of the Securities or the
Series B Securities; (iv) Temporary Cash Investments; (v) Investments acquired
by the Company or any Subsidiary in connection with an Asset Sale permitted
under Section 10.12 to the extent such Investments are non-cash proceeds as
permitted under such covenant; (vi) Investments in existence on the date of the
B Indenture; (vii) Investments in the aggregate amount of $5,000,000 to purchase
Capital Stock of any Subsidiary; (viii) any advance, loan (including guarantees)
or other extension of credit to any Person who purchases or acquires assets of
the Company or any Subsidiaries which are to be included in a business which
will be or is a party to the Franchise Program, limited to the purchase or
acquisition price of such assets; (ix) a one-time contribution of real property
independently valued at not more than $10,000,000 to a real estate investment
trust which is an Affiliate of the Company and additional contributions (and/or
the non-cash component of sales in a situation where less than 75% of the
consideration was received in cash or Cash Equivalents) to such trust of real
property independently valued, which in the aggregate at the time of each
additional contribution, together with all previous additional contributions, do
not have a value in excess of 3% of the Company's Consolidated Tangible Assets
as of the end of the next immediately preceding fiscal year; and (x) any other
Investments in joint ventures, partnerships, real estate investment trusts or
other Persons reasonably related or complementary to the business of the Company
on the date hereof in an aggregate amount not greater than $25,000,000 at any
one time outstanding. In connection with any assets or property contributed or
transferred to any Person as an Investment, such property and assets shall be
equal to the Fair Market Value (as determined by the Board of Directors) at the
time of Investment.
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of a Subsidiary owing to the Company or another
Subsidiary; provided that such Indebtedness is made pursuant to an
intercompany note, and, upon an Event of Default, all amounts owing
pursuant to such Indebtedness are immediately due and payable; and
provided, further, that (a) any disposition, pledge or transfer of any
such Indebtedness to a Person (other than the Company or a Subsidiary)
shall be an incurrence of such Indebtedness by the obligor not within
the definition of "Permitted Subsidiary Indebtedness" pursuant to this
clause (i), and (b) any transaction pursuant to which any Subsidiary
ceases to be a Subsidiary shall be deemed to be the incurrence of
Indebtedness by such Subsidiary that is not within the definition of
"Permitted Subsidiary Indebtedness" pursuant to this clause (i);
(ii) Indebtedness of a Subsidiary represented by Indebtedness
which would be permitted by clause (iv), (vi), (vii), (viii), (ix), (x)
or (xi) of the definition of "Permitted Indebtedness" if incurred by the
Company;
(iii) Acquired Indebtedness of a Subsidiary that would be
permitted to be incurred by the Company if such Acquired Indebtedness
were being incurred by the Company;
(iv) Indebtedness of a Subsidiary under the Securitization
Facility;
(v) guarantees of Senior Indebtedness of the Company; and
(vi) guarantees of Indebtedness of Affiliates provided that the
Investment in such Affiliate complies with the limitation on Restricted
Payments covenant of the Indenture or constitutes a Permitted
Investment.
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"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 (including any Series B 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 3.8
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 C 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 any underwritten public offering of
Capital Stock (other than Redeemable Capital Stock) pursuant to a registration
statement that has been declared effective by the SEC (other than a registration
statement on Form S-8 or any successor form 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 Subsidiaries and any
additions and accessions thereto, which are purchased 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 120 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 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 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" or "Qualified Institutional Buyer" means a qualified institution
buyer under Rule 144A of 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 any 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
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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.
"Refinancing" means (i) the offering and sale of the Series B Securities
pursuant to the B Indenture, (ii) the modification of the Bank Credit Facility,
and (iii) the consummation of the tender offer by the Company for its 13% Notes
outstanding prior to the date of the B Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, among the Company and the Initial Purchasers.
"Registration Statement" means any registration statement of the Company
which covers any of the Series C Securities or Series D Securities 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.
"Regular Record Date" for the interest payable on any Interest Payment
Date means April 1 or October 1, as the case may be (whether or not a Business
Day), immediately preceding such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office of the Trustee or any agent of
the Trustee appointed hereunder, including the chairman or vice chairman of the
board of directors or the executive committee of the board of directors, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers or any other officer
appointed hereunder to whom any corporate trust matter is referred because of
his or her knowledge of and familiarity with the particular subject.
"Rule 144A" means Rule 144A promulgated under the Securities Act or any
successor rule.
"S&P" means Standard and Poor's Corporation or any successor rating
agency.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a 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.
"SEC" means the United States Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or if, at any
time after the execution of the Indenture, the SEC 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.
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the United States Securities Act of 1933, as
amended, or any successor statute.
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"Securitization Facility" means the asset-backed securities issued by
the H&T Master Trust on December 13, 1996 in the aggregate principal amount of
$160,000,000, as such facility in whole or in part, may be amended, renewed,
extended, substituted, refinanced, restructured, replaced (including, without
limitation, with bank financing secured by receivables), supplemented or
otherwise modified from time to time (including, without limitation, any
successive renewals, extensions, substitutions, refinancing, restructurings,
replacements, supplementations or other modifications of the foregoing).
"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 on
any Indebtedness of the Company (other than as otherwise provided in this
definition), whether outstanding on the date hereof 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 payment to the
Securities. Without limiting the generality of the foregoing, Senior
Indebtedness shall include principal, premium (if any) and interest (including
interest accruing after the filing of a petition initiating any proceedings
under any state, federal or foreign Bankruptcy Laws whether or not allowable as
a claim in such proceeding) and all other monetary obligations of every kind and
nature of the Company from time to time owed under the Bank Credit Facility or
under the Securitization Facility; provided, however, that any Indebtedness
under any refinancing, refunding or replacement of the Bank Credit Facility or
the Securitization Facility shall not constitute Senior Indebtedness to the
extent the Indebtedness thereunder is by its express terms subordinate to any
other Indebtedness of the Company. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (i) Indebtedness evidenced by the Securities or
the Series B 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 00 Xxxxxx Xxxxxx 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 Security" means the Company's 9-7/8% Senior Subordinated Notes
due 2007 issued pursuant to the B Indenture, as such may be amended or
supplemented from time to time.
"Series C Security" has the meaning stated in the first recital of this
Indenture.
"Series D Security" has the meaning stated in the first recital of this
Indenture.
"Shelf Registration Statement" means a "shelf" registration statement of
the Company 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 SEC, 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.
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"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.9.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon means 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 which is
by its terms expressly subordinated in right of payment to the Securities.
"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 Subsidiaries, or by the Company and one or more
other Subsidiaries; provided that (i) any Unrestricted Subsidiary shall not be
deemed a Subsidiary under the Indenture and (ii) any real estate investment
trust in which the Company or any Subsidiary has invested pursuant to clause
(ix) of the definition of "Permitted Investment" shall not be deemed a
Subsidiary under this Indenture.
"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 (or, with respect to non-U.S.
banking institutions, similar instruments) 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 or a commercial
banking institution organized and located in a country recognized by the United
States of America, in each case, that has combined capital and surplus and
undivided profits of not less than $500,000,000 (or the foreign currency
equivalent thereof), whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Xxxxx'x 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 Xxxxx'x or "A-1" (or higher)
according to S&P, (iv) any money market deposit accounts or demand deposit
accounts issued or offered by a domestic commercial bank or a commercial banking
institution organized and located in a country recognized by the United States
of America, in each case having capital and surplus in excess of $500,000,000
(or the foreign currency equivalent thereof); 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 Xxxxx'x or "A-1" (or higher) according to S&P, and (v) any
other Investments, that at any one time do not exceed $100,000 in the aggregate,
issued or offered by any domestic commercial bank or any commercial banking
institution organized and located in a country recognized by the United States
of America.
"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. References to sections of the Trust Indenture Act
include successor statute sections dealing with the same subject.
"13% Notes" means the Senior Subordinated Notes due 2003 of the Company.
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"Unrestricted Subsidiary" means (i)BTFCC, Inc., (ii) any subsidiary of
the Company that at the time of determination shall be an Unrestricted
Subsidiary (as designated by the Board of Directors, as provided below), and
(iii) any subsidiary of an Unrestricted Subsidiary. The Board of Directors 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 Subsidiaries provides
credit support for Indebtedness of such Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (b) such
Unrestricted Subsidiary is not liable, directly or indirectly, with respect to
any Indebtedness other than Unrestricted Subsidiary Indebtedness or the Bank
Credit Facility, (c) any Investment by the Company in such Unrestricted
Subsidiary made as a result of designating such subsidiary an Unrestricted
Subsidiary shall not violate the provisions described under Section 10.16 and
such Unrestricted Subsidiary is not party to any agreement, contract,
arrangement or understanding at such time with the Company or any other
subsidiary of the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such other
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 an Investment, and (d) such Unrestricted
Subsidiary does not own any Capital Stock in any subsidiary of the Company which
is not simultaneously being designated an Unrestricted Subsidiary. Any such
designation by the Board of Directors 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 any Investment by the Company in such Unrestricted
Subsidiary 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
Board of Directors. The Board of Directors may designate any Unrestricted
Subsidiary as a Subsidiary; provided (i) that if such Unrestricted Subsidiary
has any Indebtedness, that immediately after giving effect to such designation,
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness or Permitted Subsidiary Indebtedness) pursuant to the restrictions
under Section 10.18, and (ii) that all Indebtedness of such Subsidiary shall be
deemed to be incurred on the date such Unrestricted Subsidiary becomes a
Subsidiary.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary
means Indebtedness of such Unrestricted Subsidiary (a) as to which neither the
Company nor any Subsidiary is directly or indirectly liable (by virtue of the
Company or any such Subsidiary being the primary obligor on, guarantor of, or
otherwise liable in any respect to, such Indebtedness), and (b) 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 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 Subsidiary" means a Subsidiary all the Capital Stock of
which (other than qualifying shares, if any) is owned by the Company or another
Wholly-Owned Subsidiary.
Section 1.2. Other Definitions.
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DEFINED IN
TERM SECTION
---- ----------
"Act" 1.5
"Agent Members" 3.6
"Change of Control Offer" 10.13
"Change of Control Purchase Date" 10.13
"Change of Control Purchase Notice" 10.13
"Change of Control Purchase Price" 10.13
"covenant defeasance" 4.3
"Defaulted Interest" 3.9
"defeasance" 4.2
"Defeasance Redemption Date" 4.4
"Defeased Securities" 4.1
"Excess Proceeds" 10.12
"Global Securities" 2.1
"incur" 10.8
"Incurrence Date" 10.8
"Initial Period" 13.3
"Non-Global Purchasers 2.1
"Non-payment Default" 13.3
"Offer" 10.12
"Offer Date" 10.12
"Offered Price" 10.12
"Offshore Global Security" 2.1
"Offshore Securities Exchange Date" 2.1
"Pari Passu Debt Amount" 10.12
"Payment Blockage Period" 13.3
"Payment Default" 13.3
"Pari Passu Offer" 10.12
"Permanent Offshore Physical Securities" 2.1
"Permitted Junior Securities" 13.2
"Permitted Payment" 10.9
"Physical Securities" 3.6
"Private Placement Legend" 2.2
"refinancing" 10.9
"Regulation S" 2.1
"Required Filing Dates" 10.17
"Restricted Payments" 10.9
"Security Amount" 10.12
"Security Register" 3.5
"Security Registrar" 3.5
"Special Payment Date" 3.9
"Surviving Entity" 8.1
"U.S. Global Security" 2.1
"U.S. Government Obligations" 4.4
"U.S. Physical Securities 2.1
Section 1.3. 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 each other
obligor on the Securities 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 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 any certificates and/or opinions is specifically required by any
provision of this Indenture, relating to such particular application or request,
no additional certificate or opinion need be furnished.
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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 to the effect that each individual or firm signing such
certificate or 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 to the effect that, in the opinion of each such
individual or such firm, he has made such examination or investigation as is
necessary to enable him or them 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 1.4. 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 such 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 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 certificate or opinion of
such an officer or of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company or other obligor on the Securities with respect to such
factual matters and which contains a statement to the effect that the
information with respect to such factual matters is in the possession of the
Company 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 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 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.
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Section 1.5. 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.
(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 done by the Trustee, any Paying Agent or the Company
or any other obligor on 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.
Section 1.6. Notices, etc., to Trustee and the Company.
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:
(a) the Trustee by any Holder or by the Company or any other obligor on
the Securities shall be sufficient for every purpose hereunder if made, given,
furnished or filed, in writing, by first-class mail postage prepaid (return
receipt requested) or delivered in person or by recognized overnight courier to
or with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration or at any other address furnished in writing prior thereto to the
Holders, the Company or any other obligor on the Securities by the Trustee; or
(b) the Company shall be sufficient for every purpose (except as
provided in Section 5.1(c)) hereunder if made, given, furnished or filed, in
writing, by first-class mail postage prepaid (return receipt requested) or
delivered in person or by recognized overnight courier, to or with the Company
addressed to it at 0000 Xxxx Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer, or at any other address previously furnished
in writing to the Trustee by the Company.
Section 1.7. Notice to Holders; Waiver.
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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, to each Holder affected
by such event, at such Holder's 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 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 1.8. Conflict with Trust Indenture Act.
If and to the extent that 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, such provision of the Trust Indenture Act shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
Section 1.9. 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 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company and any
other obligor on the Securities shall bind their successors and assigns, whether
so expressed or not.
Section 1.11. Separability Clause.
In case any provision in this Indenture or in the Securities 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 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person (other than the parties hereto and their successors
hereunder, any Paying Agent, the Holders and the holders of Senior Indebtedness)
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 1.13. Governing Law.
THIS INDENTURE AND THE SECURITIES 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).
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Section 1.14. 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 the Interest Payment Date or Redemption Date, or at
Maturity or the 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 1.15. Schedules.
All schedules attached hereto are by this reference made a part with the
same effect as if herein set forth in full.
Section 1.16. Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
Section 1.17. No Recourse against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder by accepting any of
the Securities waives and releases all such liability. Such waiver may not be
effective to waive liabilities under federal securities laws and it is the view
of the SEC that such a waiver is against public policy.
ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally.
The Securities and the Trustee's certificate of authentication thereon
shall be in substantially the forms set forth in this Article II, 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, as evidenced
by their execution of the Securities. 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 shall be issued initially in the form of one or more
permanent global Securities substantially in the form set forth in Section 2.2
(the "U.S. Global Security") deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global Security
may from time to time be increased or
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decreased by adjustments made on the records of the Trustee, as custodian for
the Depository or its nominee, as hereinafter provided.
Initial Securities held by QIBs who elect to take physical delivery of
their certificates instead of holding their interest through the U.S. Global
Security (collectively, the "Non-Global Purchasers"), will be in registered form
without interest coupons (the "U.S. Physical Securities"). Upon the transfer of
U.S. Physical Securities, which were initially issued to a Non-Global
Purchaser, to a QIB, such U.S. Physical Securities will, unless the transferee
requests otherwise or the U.S. Global Security has previously been exchanged in
whole for U.S. Physical Securities, be exchanged for an interest in the U.S.
Global Security.
Initial Securities offered and sold in reliance on Regulation S under
the Securities Act ("Regulation S") shall be issued initially in the form of a
global note certificate substantially in the form set forth in Section 2.2 (the
"Offshore Global Security" and, together with the U.S. Global Security, the
"Global Securities"). The Offshore Global Security will be deposited with the
Trustee, as custodian for the Depository, and will be registered in the name of
the Depository until the later of the completion of the distribution of the
Initial Securities and the termination of the "restricted period" (as defined in
Regulation S) with respect to the offer and sale of the Initial Securities (the
"Offshore Securities Exchange Date"). Prior to the Offshore Securities Exchange
Date, transfers of beneficial interests in the Offshore Global Security can only
be effected through the Depository in accordance with the requirements of
Section 3.7 hereof. At any time following the Offshore Securities Exchange Date
(but in no event before such date), upon receipt by the Trustee and the Company
of a certificate substantially in the form of Exhibit A hereto, the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
permanent certificated Securities in registered form substantially in the form
set forth in Section 2.2 (the "Permanent Offshore Physical Securities"), in
exchange for the surrender of a Holder's beneficial ownership interest in the
Offshore Global Security of like tenor and amount.
Section 2.2. Form of Face of Security.
(a) The form of the face of any Series C Securities authenticated and
delivered hereunder shall be substantially as follows:
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for a Series D
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, then (A) the U.S. Global Security
and each U.S. Physical Security shall bear the legend set forth below (the
"Private Placement Legend") on the face thereof and (B) the Offshore Global
Security and each Permanent Offshore Physical Security shall bear the Private
Placement Legend on the face thereof until at least 41 days after the Issue
Date.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, 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 AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"),
(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
-23-
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS 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 OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE
TRANSACTION WITHIN THE MEANING OF REGULATION S, (E) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSES (D), (E) OR (F) 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.
[Each global security, whether or not an initial security, shall also
bear the following legend on the face thereof:]
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 3.5, 3.6 AND 3.7 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 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.
-24-
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% SERIES C SENIOR SUBORDINATED NOTES DUE 2007
CUSIP NO. __________
No. ________________ $___________________
Bally Total Fitness Holding Corporation, 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 on
October 15, 2007, at the office or agency of the Company referred to below, and
to pay interest thereon from October 15, 1998, 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, 1999 at the rate
of 9-7/8% 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 C Security is entitled to the benefits of the
Registration Rights Agreement (the "Registration Rights Agreement") among the
Company and the Initial Purchasers, dated December 16, 1998, pursuant to which,
subject to the terms and conditions thereof, the Company is obligated to
consummate the Exchange Offer pursuant to which the Holder of this Security
shall have the right to exchange this Security for the Company's 9-7/8% Series D
Senior Subordinated Notes due 2007 (herein called the "Series D Securities") in
like principal amount as provided therein. The Series C Securities and the
Series D Securities are together referred to as the "Securities." The Series C
Securities rank pari passu in right of payment with the Series D Securities.
In the event that (a) the Exchange Offer Registration Statement is not
filed with the SEC on or prior to the 90th day following the date of original
issue of the Series C Securities, (b) the Exchange Offer Registration Statement
has not been declared effective on or prior to the 150th day following the date
of original issue of the Series C Securities, or (c) the Exchange Offer is not
consummated on or prior to the 180th day following the date of original issue of
the Series C Securities or a Shelf Registration Statement is not declared
effective on or prior to the 150th day following the date of original issue of
the Series C Securities (or, if a Shelf Registration Statement is required to be
filed because of the request of the Initial Purchasers, 60 days following the
request by the Initial Purchasers) (each such event referred to in clauses (a)
through (c) above, a "Registration Default"), the interest rate borne by the
Series C Securities (except in the case of clause (c), in which case only the
Series C Securities which have not been exchanged in the Exchange Offer) shall
be increased by an amount equal to one-quarter of one percent (0.25%) per annum
upon the occurrence of any Registration Default, which rate (as increased as
aforesaid) will increase by an additional one quarter of one percent (0.25%)
each 90-day period that such additional interest continues to accrue under any
such circumstance, with an aggregate maximum increase in the interest rate equal
to 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.
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, immediately 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 C 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
-25-
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 the 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
(which initially will be the Corporate Trust Office of the Trustee), 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; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on 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.
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.
BALLY TOTAL FITNESS HOLDING CORPORATION
By: --------------------------------
Title: -----------------------------
Attest:
Authorized Officer
-26-
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 9-7/8% Series C Senior Subordinated Notes due 2007
referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: --------------------------
Authorized Signer
Dated:
-27-
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 10.12 or Section 10.13, as applicable, of the Indenture, check the Box:
[ ].
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 10.12 or Section 10.13 as applicable, of the Indenture,
state the amount (in original principal amount): $_________________
Date:_______________ Your Signature:____________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:_______________________________
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
-28-
(b) The form of the face of any Series D Securities authenticated and
delivered hereunder shall be substantially as follows:
[Each global security, whether or not an initial security, shall also
bear the following legend on the face thereof:]
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 3.5, 3.6 AND 3.7 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 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.
-29-
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% SERIES D SENIOR SUBORDINATED NOTES DUE 2007
CUSIP NO. __________
No. _______________ $___________________
Bally Total Fitness Holding Corporation, 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 on October 15, 2007, at the office or agency of the Company
referred to below, and to pay interest thereon from October 15, 1998, 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, 1999 at the rate of 9-7/8% 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 C
Security or Series B Security exchanged for this Series D Security, interest on
this Series D Security shall accrue from the most recent Interest Payment Date
to which interest on the Series C Security or Series B Security which was
exchanged for this Series D 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 D Security was issued pursuant to the Exchange Offer
pursuant to which the Company's 9-7/8% Series C Senior Subordinated Notes due
2007 (herein called the "Series C Securities"), and the Company's 9-7/8% Series
B Senior Subordinated Notes due 2007 (herein called the "Series B Securities")
in like principal amount were exchanged for the Series D Securities. The Series
D Securities rank pari passu in right of payment with the Series C Securities
and the Series B Securities.
In addition, for any period in which the Series C Security exchanged for
this Series D Security was outstanding, in the event that (a) the Exchange Offer
Registration Statement was not filed with the SEC on or prior to the 90th day
following the date of original issue of the Series C Security, (b) the Exchange
Offer Registration Statement was not declared effective on or prior to the 150th
day following the date of original issue of the Series C Security, or (c) the
Exchange Offer was not consummated on or prior to the 180th day following the
date of original issue of the Series C Security or a Shelf Registration
Statement was not declared effective on or prior to the 150th day following the
date of original issue of the Series C Security (or, if a Shelf Registration
Statement was required to be filed because of the request of the Initial
Purchasers, 60 days following a request by the Initial Purchasers) (each such
event referred to in clauses (a) through (c) above, a "Registration Default"),
the interest rate borne by the Series C Securities (except in the case of clause
(c), in which case only the Series C Securities which have not been exchanged in
the Exchange Offer) was increased by one-quarter of one percent (0.25%) per
annum upon the occurrence of the Registration Default, which rate (as increased
as aforesaid) will increase by an additional one-quarter of one percent (0.25%)
each 90-day period that such additional interest continues to accrue under any
such circumstance, with an aggregate maximum increase in the interest rate equal
to 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 C
Security, interest at such increased interest rate, if any, on this Series D
Security shall accrue from the most recent Interest Payment Date to which such
interest on the Series C 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.
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
-30-
whose name this Security (or any Predecessor Securities) 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,
immediately 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 D 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 Securities) 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 the 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
(which initially will be the Corporate Trust Office of the Trustee), 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; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
address of the Person entitled thereto as such address shall appear on 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.
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.
BALLY TOTAL FITNESS HOLDING CORPORATION
By: --------------------------------
Title: ----------------------------
Attest:
Authorized Officer
-31-
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 9-7/8% Series D Senior Subordinated Notes due 2007
referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: -------------------------------
Authorized Signer
Dated:
-32-
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Security purchased by the Company pursuant to
Section 10.12 or Section 10.13, as applicable, of the Indenture, check the Box:
[ ]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 10.12 or Section 10.13 as applicable, of the Indenture,
state the amount (in original principal amount): $___________
Date:____________ Your Signature:__________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:________________________________
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
-33-
Section 2.3. Form of Reverse of Securities.
(a) The form of the reverse of the Series C Securities shall be
substantially as follows:
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% SERIES C SENIOR SUBORDINATED NOTES DUE 2007
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9-7/8% Series C Senior Subordinated Notes due
2007(herein called the "Securities"), limited (except as otherwise provided in
the Indenture referred to below) in aggregate principal amount limited to
$300,000,000, issued under and subject to the terms of an indenture (herein
called the "Indenture") dated as of December 16, 1998, between the Company and
U.S. Bank Trust National Association, 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 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 on October 15, of the years indicated below:
REDEMPTION
YEAR PRICE
---- -----
2002 104.938%
2003 103.292%
2004 101.646%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to 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).
If less than all of the Securities or Series D Securities are to be
redeemed, the Trustee shall select the Securities and Series D Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable
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.
In addition, at any time on or 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 35% of the aggregate principal amount of
Securities originally issued (whether on or after the Issue Date) under the
Indenture at a redemption price equal to 109.875% of the aggregate principal
amount thereof, plus accrued and unpaid interest
-34-
thereon, if any, to the Redemption Date; provided that at least 65% of the
aggregate principal amount of Securities and Series D Securities originally
issued under the Indenture 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 related Public
Equity Offering and must consummate such redemption within 90 days of the
closing of the Public Equity Offering.
Under certain circumstances, in the event the Net Cash Proceeds received
by the Company from any Asset Sale (which proceeds are not used to permanently
repay any Senior Indebtedness or invested in properties or other assets that
replace the properties and assets that were the subject of the Asset Sale or
which will be used in the businesses of the Company or its Subsidiaries existing
on the date of the Indenture or in businesses reasonably related or
complementary thereto) exceeds a specified amount, the Company will be required
to set aside such proceeds in a separate account pending an offer by the Company
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 Securities are not entitled to
the benefit of any sinking fund.
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 rights of the Holders under the Indenture and the Securities 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 and Series
D Securities at the time Outstanding, on behalf of the Holders of all the
Securities and Series D Securities, to waive compliance by the Company with
certain provisions of the Indenture and the Securities and certain past Defaults
under the Indenture 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 wavier is made upon this
Security.
The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in
any other manner, of all Senior Indebtedness of the Company whether outstanding
on the date hereof or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustees his attorney-in-fact for such
purpose.
-35-
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 or any
other obligor on the Securities (in the event 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.
If this Series C 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 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 C 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, may exchange this Series C
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 C
Security to be represented by a beneficial interest in a Global Security in
accordance with the customary procedures of the Depository unless the Company
has elected not to issue a Global Security.
If this Series C Security is a Global Security, it is exchangeable for a
Series C Security in certificated form as provided in the Indenture and in
accordance with the rules and procedures of the Trustee and the Depository. In
addition, certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in a Global Security if (x) the
Depository notifies the Company that it is unwilling or unable to continue as
depository for a Global Security and a successor Depository 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
Depository. Upon any such issuance, the Trustee is required to register such
certificated Series C 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 C Securities would be required to include the Private
Placement Legend.
Series C 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 C 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 C 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 C 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.
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 or other governmental charge payable in connection therewith.
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Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company 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, 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 C Security.]
(b) The form of the reverse of the Series D Securities shall be
substantially as follows:
BALLY TOTAL FITNESS HOLDING CORPORATION
9-7/8% SERIES D SENIOR SUBORDINATED NOTES DUE 2007
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9-7/8% Series D Senior Subordinated Notes due 2007
(herein called the "Securities"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount limited to
$300,000,000, issued under and subject to the terms of an indenture (herein
called the "Indenture") dated as of December 16, 1998, between the Company and
U.S. Bank Trust National Association, 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 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 104.938%
2003 103.292%
2004 101.646%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest, if any, to 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).
If less than all of the Securities or Series C Securities are to be
redeemed, the Trustee shall select the Securities and Series C Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
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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 and in accordance with
the procedures set forth in the Indenture.
In addition, at any time on or 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 35% of the aggregate principal amount of
Securities originally issued (whether on or after the Issue Date) under the
Indenture at a redemption price equal to 109.875% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Redemption Date; provided that at least 65% of the aggregate principal amount of
Securities and Series C Securities originally issued under the Indenture 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 related Public Equity Offering and must consummate
such redemption within 90 days of the closing of the Public Equity Offering.
Under certain circumstances, in the event the Net Cash Proceeds received
by the Company from any Asset Sale (which proceeds are not used to permanently
repay any Senior Indebtedness or invested in properties or other assets that
replace the properties and assets that were the subject of the Asset Sale or
which will be used in the businesses of the Company or its Subsidiaries existing
on the date of the Indenture or in businesses reasonably related or
complementary thereto) exceeds a specified amount, the Company will be required
to set aside such proceeds in a separate account pending an offer by the Company
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 Securities are not entitled to
the benefit of any sinking fund.
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 rights of the Holders under the Indenture and the Securities 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 and Series
C Securities at the time Outstanding, on behalf of the Holders of all the
Securities and Series C Securities, to waive compliance by the Company with
certain provisions of the Indenture and the Securities and certain past Defaults
under the Indenture 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.
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The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in
any other manner, of all Senior Indebtedness of the Company whether outstanding
on the date hereof or thereafter created, incurred, assumed or guaranteed. Each
Holder by his acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on his behalf, to take such action
as may be necessary or appropriate to effectuate the subordination provided for
in the Indenture and appoints the Trustee his attorney-in-fact for such purpose.
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 or any
other obligor on the Securities (in the event 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.
If this Series D Security is in certificated form, then as provided in
the Indenture and subject to certain limitations therein set forth, the transfer
of this Series D Security is registrable on the Security Register of the
Company, upon surrender of this Series D 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 D Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Series D Security is a U.S. Global Security, it is exchangeable
for a Series D Security in certificated form as provided in the Indenture and in
accordance with the rules and procedures of the Trustee and the Depository. In
addition, certificated securities shall be transferred to all beneficial holders
in exchange for their beneficial interests in the U.S. Global Security if (x)
the Depository notifies the Company that it is unwilling or unable to continue
as depository for the U.S. Global Security and a successor Depository 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 Depository. Upon any such issuance, the Trustee is required to register
such certificated Series D Securities in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof).
Series D 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 D 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 or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company 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, 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).
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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 D Security.]
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to $300,000,000 in principal
amount of 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 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 9.6, 10.12, 10.13 or 11.8.
The Securities shall be known and designated as the "9-7/8% Senior
Subordinated Notes due 2007" of the Company. The Stated Maturity of the
Securities shall be October 15, 2007, and the Securities shall each bear
interest at the rate of 9-7/8% per annum, as such interest rate may be adjusted
as set forth in the Securities, from October 15, 1998, or from the most recent
Interest Payment Date to which interest has been paid, payable semiannually on
April 15 and October 15 in each year, commencing April 15, 1999, 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, premium, if any, and interest on, the Securities shall
be payable and the Securities will be exchangeable and transferable at an office
or agency of the Company in The City of New York maintained for such purposes
(which initially will be the Corporate Trust Office of the Trustee) or at such
other office or agency as may be maintained for such purpose; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to addresses of the Person entitled thereto as such addresses shall
appear on the Security Register.
For all purposes hereunder, the Series C Securities and the Series D
Securities will be treated as one class and are together referred to as the
"Securities." The Series C Securities rank pari passu in right of payment with
the Series D Securities.
The Securities shall be subject to repurchase by the Company pursuant to
an Offer as provided in Section 10.12.
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 10.13.
The Securities shall not be entitled to the benefits of any sinking
fund.
The Securities shall be redeemable as provided in Article XI and in the
Securities.
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 IV.
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Section 3.2. Denominations.
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 3.3. Execution, Authentication, Delivery and Dating.
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 and 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.
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 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 make available for delivery such
Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security 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 one of its duly authorized
signataries, 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 of its Subsidiaries, pursuant to Article
VIII, 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 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 VIII, 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 3.3 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
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appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Security Registrar or Paying Agent to deal with the Company
and its Affiliates.
If an officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates such Security such Security shall
be valid nevertheless.
Section 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, 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.
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 10.2,
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 make available for delivery 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 3.5. 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 10.2
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 change the Security Registrar or appoint one or more
co-Security Registrars without notice.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 10.2, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, 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 make available for
delivery, Securities of the same series which the Holder making the exchange is
entitled to receive: provided that no exchange of Series C Securities for Series
D Securities shall occur until an Exchange Offer
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Registration Statement shall have been declared effective by the SEC and that
the Series C Securities exchanged for the Series D 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 for any tax or other
governmental charge that may be imposed in connection therewith, other than
exchanges pursuant to Sections 3.3, 3.4, 3.5, 9.6, 10.12, 10.13 or 11.8 not
involving any transfer.
The Company shall not 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 selected for
redemption under Section 11.4 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 2.2, and the restrictions set forth in this Section 3.5, 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 3.5 upon the transferability of
any particular Security shall cease and terminate on (a) the later of December
16, 2000 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 3.5
(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 or Offshore Global Security,
whether pursuant to this Section 3.5, Section 3.4, 3.8, 9.6 or 11.8 or
otherwise, shall also be a U.S. Global Security or Offshore Global Security, as
the case may be, and shall bear the legend specified in Section 2.2.
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Section 3.6. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the name
of the Depository, (ii) be deposited with, or on behalf of, the Depository or
with the Trustee as custodian for the Depository and (iii) bear legends as set
forth in Section 2.2.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or the Trustee as its custodian, or under the
Global Security, and the Depository 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 Depository, or shall impair, as between the
Depository and its Agent Members, the operation of customary practices governing
the exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the rules and procedures of the Depository
and the provisions of Section 3.7. Beneficial owners may obtain U.S. Physical
Securities in exchange for their beneficial interests in the U.S. Global
Security upon request in accordance with the Depository's and the Security
Registrar's procedures. In addition, at any time following the Offshore
Securities Exchange Date, upon receipt by the Trustee and the Company of a
certificate substantially in the Form of Exhibit A hereto, the Company shall
execute, and the Trustee shall authenticate and deliver to beneficial owners, in
exchange for their beneficial interest in the Offshore Global Security,
Permanent Offshore Physical Securities (together with the U.S. Physical
Securities, the "Physical Securities"). In connection with the execution,
authentication and delivery of either of such Physical Securities, the Security
Registrar shall reflect on its books and records a decrease in the principal
amount of the relevant 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 a Global Security if (i)
the Depository notifies the Company that it is unwilling or unable to continue
as a Depository for a Global Security and a successor Depository 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 Depository.
(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 the Global Security in an amount equal to the principal
amount of the beneficial interest in the 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.
(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 Depository, in exchange for its
beneficial interest in the U.S. Global Security or Offshore Global Security, as
the case may be, an equal aggregate principal amount of U.S. Physical Securities
or Permanent Offshore Physical Securities, as the case may be, of authorized
denominations.
(e) Any Physical Security delivered in exchange for an interest in
Global Securities pursuant to subsection (c) or subsection (d) of this Section
shall, except
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as otherwise provided by paragraph (a)(i)(x) and paragraph (f) of Section 3.7,
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 3.7. 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 D
Security in connection with the Exchange Offer, in each case pursuant to the
Registration Rights Agreement, the following provisions shall apply:
(a) Transfers to non-QIB institutional "accredited investors" (as
defined in Rule 501(a) (1), (2), (3) and (7) under the Securities Act). The
following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) which is not a QIB (excluding Non-U.S.
Persons):
(i) The Security Registrar shall register the transfer of any
Initial Security whether or not such Initial Security bears the Private
Placement Legend, if (x) the requested transfer is at least two years
after the Issue Date of the Initial Securities or (y) the proposed
transferee has delivered to the Security Registrar a certificate
substantially in the form of Exhibit B hereto.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in a Global Security, upon receipt by the Security
Registrar of (x) the documents, if any, required by paragraph (i) and
(y) instructions given in accordance with the Depository's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of the applicable Global Security in an amount equal to
the principal amount of the beneficial interest in the Global Security
transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more U.S. Physical Securities of like
tenor and amount.
(b) 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) If the Security to be transferred consists of Physical
Securities, the Security Registrar shall register the transfer if 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, 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 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
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are to be evidenced by an interest in the U.S. Global Security, upon
receipt by the Security Registrar of instructions given in accordance
with the Depository's and the Security Registrar's procedures therefor,
the Security Registrar shall reflect on its books and records the date
and an increase in the principal amount of the U.S. 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 Security to be transferred consists of an interest
in the U.S. Global Security, and the proposed transferee is a Agent
Member, the Security Registrar shall reflect such transfer on its books
and records.
(c) Transfers by Non-U.S. Persons on or Prior to January 25, 1999. The
following provisions shall apply with respect to registration of any proposed
transfer of an Initial Security by a Non-U.S. Person on or prior to January 25,
1999:
(i) If the proposed transferee is (x) a Non-U.S. Person and the
proposed transferor has delivered to the Security Registrar a
certificate substantially in the form of Exhibit C hereto or (y) a QIB
and the proposed transferor has advised the Company and the Security
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has advised the Company and
the Security Registrar in writing, 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 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, upon instructions
given in accordance with the Depository's procedures, the Security
Registrar shall register the transfer of any Initial Security by
reflecting on its books and records a decrease in the principal amount
at maturity of the Offshore Global Security in an amount equal to the
beneficial interest in such Global Security so transferred.
(ii) If the proposed transferee is a Agent Member, upon receipt
by the Security Registrar of instructions given in accordance with the
Depository's and the Security Registrar's procedures therefor, the
Security Registrar shall reflect on its books and records the date and
an increase in the principal amount at maturity of the U.S. Global
Security in an amount equal to the principal amount of the beneficial
interest in the Offshore Global Security to be transferred, and the
Trustee shall decrease the principal amount at maturity of the Offshore
Global Security represented by the beneficial interest therein so
transferred.
(d) Transfers by Non-U.S. Persons after January 25, 1999. The following
provisions shall apply with respect to any transfer of an Initial Security by a
Non-U.S. Person after January 25, 1999:
(i) If the Initial Security to be transferred is a Permanent
Offshore Physical Security, the Security Registrar shall register such
transfer.
(ii) If the proposed transferee is an Agent Member, upon receipt
by the Security Registrar of instructions given in accordance with the
Depository's and the Security Registrar's procedures therefor, the
Security Registrar shall reflect on its books and records the date and
an increase in the principal amount of the U.S. Global Security in an
amount equal to the principal amount of the Permanent Offshore Physical
Security to be transferred, and the Trustee shall cancel the Permanent
Offshore Physical Security so transferred.
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(e) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of an Initial Security to a Non-U.S.
Person:
(i) On or prior to January 25, 1999, and subject to (ii) below,
the Security Registrar shall register any proposed transfer of an
Initial Security to a Non-U.S. Person upon receipt of a certificate
substantially in the form of Exhibit C hereto from the proposed
transferor, by reflecting on its books and records an increase in the
principal amount at maturity of the Offshore Global Security in an
amount equal to the principal amount of the Securities transferred.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the document, if any, required by paragraph
(i), and (y) instructions in accordance with the Depository's and the
Security Registrar's procedures thereof, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Security
transferred, and an increase in the same amount to the principal amount
at maturity of the Offshore Global Security.
(iii) After January 25, 1999, and subject to paragraph (iv)
below, the Security Registrar shall register any proposed transfer to
any Non-U.S. Person (x) if the Initial Security to be transferred is a
Permanent Offshore Physical Security, or (y) if the Initial Security to
be transferred is a U.S. Physical Security or an interest in the U.S.
Global Security, upon receipt of a certificate substantially in the form
of Exhibit C from the proposed transferor and (z) in the case of any of
clause (x) or (y), the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(iv) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Security, upon receipt by the
Security Registrar of (x) the document, if any, required by paragraph
(iii), and (y) instructions in accordance with the Depository's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount of the U.S. Global Security in an amount equal to the
principal amount of the beneficial interest in the U.S. Global Security
to be transferred and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Permanent Offshore Physical
Securities of like tenor and amount.
(f) 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. 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 either (i)
the circumstances contemplated by paragraphs (a)(i)(x), (d)(i) or (e)(iii) of
this Section 3.7 exist or (ii) 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.
(g) 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 3.6 or this Section
3.7. The Company shall have the right to inspect and make copies of all such
letters, notices
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or other written communications at any reasonable time upon the giving of
reasonable written notice to the Security Registrar.
Section 3.8. 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 other obligor on the Securities 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 other obligor on
the Securities or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon a Company Request the Trustee
shall authenticate and make available for delivery, 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 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 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 other obligor on the Securities,
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 3.9. 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.
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 an 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 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
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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 provided in this Subsection. 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 3.9, 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.
Section 3.10. 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 3.11. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company 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 3.9) interest on, such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 3.12. 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 may at any
time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company 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 3.12, except as expressly
permitted by this Indenture. If requested by the Company, all canceled
Securities held by the Trustee shall be returned to the Company. The Trustee
shall provide the Company a list of all Securities that have been canceled from
time to time as requested by the Company.
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Section 3.13. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.1. 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 4.2 or Section 4.3 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article IV.
Section 4.2. Defeasance and Discharge.
Upon the Company's exercise under Section 4.1 of the option applicable
to this Section 4.2, the Company and any other obligor on 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 4.4
below are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company and any other obligor on 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 4.5 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 4.4 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 3.4, 3.5, 3.8, 10.2 and
10.3, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
6.7, and (d) this Article IV. Subject to compliance with this Article IV, the
Company may exercise its option under this Section 4.2 notwithstanding the prior
exercise of its option under Section 4.3 with respect to the Securities.
Section 4.3. Covenant Defeasance.
Upon the Company's exercise under Section 4.1 of the option applicable
to this Section 4.3, the Company and any other obligor on the Securities shall
be released from its obligations under any covenant or provision contained or
referred to in Sections 10.4 through 10.18, inclusive, and the provisions of
Article VIII with respect to the Defeased Securities on and after the date the
conditions set forth in Section 4.4 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 any other obligor on the Securities
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
5.1(c), (d), (e) or (f), but, except as specified in this Indenture, the
remainder of this Indenture and such Defeased Securities shall be unaffected
thereby. In the event covenant defeasance occurs, the Events of Default
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specified in Sections 5.1(e) and (f) will no longer constitute Events of Default
with respect to the Securities.
Section 4.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
4.2 or Section 4.3 to the Securities to be defeased:
(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 Securities to
be defeased, 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 4.2 or its option applicable to Section 4.3, 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 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 4.2, 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 4.3, 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;
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(4) No Default or Event of Default (other than a Default or Event of
Default 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 5.1(g) or (h) 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 deemed 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;
(6) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a default under, (A) this Indenture or (B) any
other agreement or instrument to which the Company or any Significant Subsidiary
is a party or by which the Company or any Significant Subsidiary is bound, if
such breach, violation, or default thereof would have a material adverse effect
on the Company and its Subsidiaries taken as a whole;
(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 in the United States to the effect that after the 91st day
following the deposit, the trust funds will not be subject to avoidance under
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code (or any successor provision
thereto) and related judicial decisions;
(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 over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company 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 4.2 or the covenant defeasance under Section 4.3 (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 4.5. 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 10.3, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 4.4 in respect of the
Defeased Securities 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
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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.
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 4.4 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 IV 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 4.4 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 4.6. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 4.2 or 4.3, 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 shall be
revived and reinstated, with present and prospective effect, as though no
deposit had occurred pursuant to Section 4.2 or 4.3, 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 4.2 or
4.3, 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.
ARTICLE V
REMEDIES
Section 5.1. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
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) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company under this Indenture (other than a default
in the performance, or breach, of a covenant or agreement which is specifically
dealt with in clauses (a), (b) or (d) of this Section 5.1) 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
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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;
(d) (i) there shall be a default in the performance or breach of the
provisions of Article VIII; (ii) the Company shall have failed to make or
consummate an Offer required in accordance with the provisions of Section 10.12;
or (iii) the Company shall have failed to make or consummate a Change of Control
Offer required in accordance with the provisions of Section 10.13;
(e) one or more defaults shall have occurred under any of the
agreements, indentures or instruments under which the Company or any Subsidiary
then has outstanding Indebtedness in excess of $10,000,000, individually or in
the aggregate, and either (a) such default results from the failure to pay such
Indebtedness at its stated final maturity or (b) such default or defaults have
resulted in the acceleration of the maturity of such Indebtedness;
(f) one or more judgments, orders or decrees for the payment of money in
excess of $10,000,000 either individually or in the aggregate, shall be rendered
against the Company or any 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, order or decree, by reason of an appeal or otherwise, shall not
be in effect; provided that the amount of such money judgment, order or decree
shall be calculated net of any insurance coverage that the Company has
determined in good faith is available in whole or in part with respect to such
money judgment, order or decree;
(g) 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 or any Significant
Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy
Law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Significant
Subsidiary under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Significant 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
(h) (1) the Company or any Significant Subsidiary commences a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case or
proceeding to be adjudicated bankrupt or insolvent, (2) the Company or any
Significant Subsidiary consents to the entry of a decree or order for relief in
respect of the Company or such Significant Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (3) the Company or any
Significant Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (4) the
Company or any Significant Subsidiary (A) 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
or such Significant Subsidiary or of any substantial part of their respective
properties, (B) makes an assignment for the benefit of creditors or (C) admits
in writing its inability to pay its debts generally as they become due, or (5)
the Company or any Significant Subsidiary takes any corporate action in
furtherance of any such actions in this paragraph (h).
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Sections 5.1(g) and (h) with respect to the Company) shall occur and be
continuing with respect to this Indenture, the Trustee or the Holders of not
less than 25% in aggregate
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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 (g) or (h) of Section 5.1 occurs with respect to the Company
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 its
discretion, proceed to protect and enforce the rights of the Holders of the
Securities by appropriate judiciary proceedings.
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
(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 the 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 5.13. No such rescission shall
affect any subsequent Default or impair any right consequent thereon.
If payment of the Securities is accelerated because of an Event of
Default, the Company or the Trustee shall promptly notify the agent under the
Bank Credit Facility of the acceleration. If any indebtedness under the Bank
Credit Facility is outstanding, the Company may not pay the Securities until
five Business Days after the agent under the Bank Credit Facility receives
notice of such acceleration, and, thereafter, may pay the Securities only if
this Indenture otherwise permits payments at that time.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants 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 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
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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 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 other obligor on the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor on 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 by such appropriate private or judicial proceedings
as the Trustee shall deem most effectual to protect and enforce such rights,
subject however to Section 5.12. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
Section 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor on 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 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 6.7.
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 5.5. Trustee May Enforce Claims without Possession of
Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
and as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the
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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 5.6. Application of Money Collected.
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 6.7;
SECOND: Subject to Article Thirteen, 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.
Section 5.7. 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 30 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 30-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 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, except in the manner provided in
this Indenture and for the equal and ratable benefit of all the Holders.
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Section 5.8. 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 3.9) 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.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, 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 5.10. Rights and Remedies Cumulative.
Except as provided in Section 3.8, 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 5.11. 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 5.12. 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
(a) such direction shall not be in conflict with any rule of law or with
this Indenture (including, without limitation, Section 5.7) or 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 5.13. 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
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(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 5.14. 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
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).
Section 5.15. Waiver of Stay, Extension or Usury Laws.
Each of the Company and any other obligor on the Securities 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 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 any other obligor on the Securities (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 5.16. Remedies Subject to Applicable Law.
All rights, remedies and powers provided by this Article V may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law, and all the provisions of this Indenture are
intended to be subject to all applicable mandatory provisions of law which may
be controlling 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 VI
THE TRUSTEE
Section 6.1. Duties of Trustee.
Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
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(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:
(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 6.1;
(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 6.1; 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.
Section 6.2. Notice of Defaults.
Within 90 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.
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Section 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1 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 of its selection and any advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon 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;
(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.
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(i) Notwithstanding anything to the contrary herein, the Trustee shall
have no duties to review any Officers' Certificates, Board Resolutions, Opinions
of Counsel, financials or other documents furnished to it by the Company for
purposes of determining compliance with any provisions of this Indenture.
(j) The Trustee shall have no duty to inquire as to the performance of
the Company's covenants in Article X. In addition, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Sections 5.01(a), 5.01(b) and 10.1 or (ii) any
Default or Event of Default to which the Trustee shall have received written
notification or obtained actual knowledge.
Section 6.4. 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.
The Trustee makes no 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 true and accurate subject to the qualifications set forth therein.
The Trustee shall not be accountable for the 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 6.5. Trustee and Agents May Hold Securities; Collections; etc.
The Trustee, any Paying Agent, Security Registrar or any other agent of
the Company, 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, Paying Agent, Security Registrar or such other agent and, subject to
Sections 6.8 and 6.13 hereof and Trust Indenture Act Sections 310 and 311, may
otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
the Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.6. Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as
herein provided, and subject to Article XIII, 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 Article IV, the Trustee shall,
upon request by the Company, invest all moneys received by the Trustee, until
used or applied as herein provided, in Temporary Cash Investments in accordance
with the directions of the Company. The Trustee shall be under no liability to
the Company for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 6.7. 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, such compensation as the parties
shall agree in writing from time to time 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 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
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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
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 6.7
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 6.7 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.
Section 6.8. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 6.9. 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)(1) and which shall
have a combined capital and surplus of at least $100,000,000 or is a member of a
bank holding company with 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 a Corporate Trust 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 6.9,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 6.10. 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 6.11.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time, upon 30 days prior or written notice, resign by giving written notice
thereof to the Company. Upon receiving such notice or resignation, the Company
shall promptly appoint a successor trustee by written instrument executed by
authority of the Board of Directors, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance 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.
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(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 6.9 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 of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, 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 ii 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, by a Board Resolution, shall promptly appoint a successor trustee and
shall comply with the applicable requirements of Section 6.11. If, within 60
days 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 Trustee or the Holder of any Security who has
been a bona fide Holder for at least six months may, subject to Section 5.14, 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 6.11. 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 6.7 then unpaid, such
retiring Trustee shall pay over to the successor trustee all moneys at the time
held by it hereunder and shall execute and deliver an instrument transferring to
such successor trustee all such rights, powers,
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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 6.11 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 VI 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 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, 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
6.10. 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 6.12. 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 VI 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 6.9,
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 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 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
other obligor on 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.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
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(a) semiannually, not more than 15 days after each Regular Record Date,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the 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;
Section 7.2. 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 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 nor 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 Action Section 312.
Section 7.3. 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), provided that if no event described in Trust
Indenture Act Section 313(a) has occurred within the twelve-month period
preceding the reporting date, no such report need be transmitted. The Trustee
shall also transmit by mail to the 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 Sections
313(a) and 313(b)(2).
(b) A copy of each report transmitted to Holders pursuant to this
Section 7.3 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 SEC. The Company will notify the Trustee promptly if the
Securities are listed on any stock exchange.
Section 7.4. Reports by Company.
The Company shall:
(a) file with the Trustee, in accordance with Section 10.17 hereof, and
in any event within 15 days after the Company is required to file the same with
the SEC, 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 SEC may
from time to time by rules and regulations prescribe) which the Company is
required to file with the SEC pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the Company is not required to file information, 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 GAAP, 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 SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, 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
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securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the SEC, in accordance with the rules and
regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants for 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 pursuant to Section 10.17 hereunder
and subsections (a) and (b) of this Section as is required and not prohibited by
rules and regulations prescribed from time to time by the SEC. At the Company's
request and at the Company's expense, the Trustee shall deliver such documents
to the Holders.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OF ASSETS
Section 8.1. Company May Merge, Consolidate, etc., Only on Certain
Terms.
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 Subsidiaries on a Consolidated
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, as the case may be, 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 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), no Default or Event of Default will have occurred and be
continuing;
(iii) 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 results 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 obligor hereunder) could incur $1.00 of additional
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Indebtedness (other than Permitted Indebtedness or Permitted Subsidiary
Indebtedness) under Section 10.8; and
(iv) 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
Officer's 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;
provided, however, that the foregoing prohibition shall not prohibit any merger
between or among Subsidiaries or between a Subsidiary and the Company, provided
the Company is the continuing corporation.
Section 8.2. 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 in accordance with Section 8.1, the successor Person
formed by such consolidation or into which the Company 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 under this Indenture, with the same effect
as if such successor had been named as the Company herein. When a successor
assumes all the obligations of its predecessor under this Indenture or the
Securities, the predecessor shall be released from such assumed obligations and
covenants under the indenture and the Securities, as the case may be; provided
that in the case of a transfer by lease, the predecessor shall not be released
from the payment of principal and interest on the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures and Agreements without Consent of
Holders.
Without the consent of any Holders, the Company and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto 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 or any
other obligor on the Securities, and the assumption by any such successor of the
covenants of the Company or obligor herein and in the Securities in accordance
with Article VIII;
(b) to add to the covenants of the Company or any other obligor on the
Securities for the benefit of the Holders, or to surrender any right or power
conferred on the Company or any other obligor on the Securities, as applicable,
herein or in the Securities;
(c) to cure any ambiguity, or to correct or supplement any provision
herein or in any supplemental indenture or the Securities which may be defective
or inconsistent with any other provision herein or in the Securities or to make
any other provisions with respect to matters or questions arising under this
Indenture or the Securities; provided that, in each case, such provisions shall
not adversely affect the interest of the Holders;
(d) to comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act, as
contemplated by Section 9.5 or otherwise;
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(e) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder; or
(f) 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 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 9.2. Supplemental Indentures and Agreements with Consent of
Holders.
Except as permitted by Section 9.1, 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 and the Trustee, the Company
when authorized by Board Resolutions, and the Trustee may (i) enter into an
indenture or indentures supplemental hereto 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 or the Securities (including, but not limited to, for the purpose of
modifying in any manner the rights of the Holders under this Indenture or the
Securities) or (ii) waive compliance with any provision in this Indenture or the
Securities (other than waivers of past Defaults covered by Section 5.13 and
waivers of covenants which are covered by Section 10.19); 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 10.12 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 10.13, 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, 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 9.2 or Section 5.13 or
10.19, 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 VIII, consent to the
assignment or transfer by the Company of any of its rights and obligations
hereunder; or
(f) amend or modify any of the provisions of Article XIII of this
Indenture in any manner adverse to the Holders.
Upon the written request of the Company accompanied by a copy of Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture.
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It shall not be necessary for any Act of Holders under this Section 9.2
to approve the particular form of any proposed supplemental indenture but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.3. 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 IX 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 6.2 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 is
authorized or permitted by this Indenture. 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 or otherwise.
Section 9.4. 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 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article IX shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX 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 authenticated and delivered by the Trustee in
exchange for Outstanding Securities.
Section 9.7. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.2, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 1.7, setting forth in general terms the
substance of such supplemental indenture. Any failure of the Company to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
ARTICLE X
COVENANTS
Section 10.1. 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.
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Section 10.2. 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 office of the Trustee, at its Corporate Trust Office, will be such
office or agency of the Company, unless the Company shall designate and maintain
some other office or agency for one or more of such purposes. 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 Trustee and the Company
hereby appoints the Trustee 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 10.3. 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 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 Persons 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 to so 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 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
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(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.
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 10.4. Corporate Existence.
Subject to Article VIII, 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 Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors shall determine that the
preservation thereof is no longer necessary or desirable in the conduct of the
business of the Company and its Subsidiaries as a whole; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its assets in compliance with the terms of this
Indenture.
Section 10.5. 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 Subsidiaries shown to be due on any return of the Company or any of its
Subsidiaries or otherwise assessed or upon the income, profits or property of
the Company or any of its 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 to perform its obligations hereunder and (b) all lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien upon
the property of the Company or any of its Subsidiaries, except for any Lien
permitted to be incurred under Section 10.11, if failure to pay or discharge the
same could reasonably be expected to have a material adverse effect on the
ability of the Company to perform its obligations hereunder; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
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.
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Section 10.6. Maintenance of Properties.
The Company shall cause all material properties owned by the Company or
any of its Subsidiaries or used or held for use in the conduct of its business
or the business of any of its 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
Subsidiaries; and provided, further, however, that the foregoing shall not
prohibit a sale, transfer or conveyance of a Subsidiary or any of its properties
or assets in compliance with the terms of this Indenture.
Section 10.7. Insurance.
The Company shall at all times keep all of its and its 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 in the same
general geographic areas in which the Company and its 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 Subsidiaries, taken as a
whole.
Section 10.8. Limitation on Indebtedness.
The Company will not create, issue, incur, assume, guarantee or
otherwise in any manner become directly or indirectly liable for the payment of
or otherwise suffer to exist (collectively, "incur"), any Indebtedness
(including any Acquired Indebtedness), other than Permitted Indebtedness, unless
such Indebtedness is incurred by the Company and the Company's Consolidated
Fixed Charge Coverage Ratio for the four full fiscal quarters for which
financial results are available immediately preceding the date of incurrence of
such Indebtedness (the "Incurrence Date"), 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 to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such
proceeds occurred, at the beginning of such four-quarter period; (ii) the
incurrence, repayment or retirement of any other Indebtedness by the Company
since the first day of such four-quarter period as if such Indebtedness was
incurred, repaid or retired at the beginning of such four-quarter 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 four-quarter period); (iii) in the case of Acquired
Indebtedness, the related acquisition; and (iv) any acquisition or disposition
by the Company and its Subsidiaries of any company or any business or any assets
out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period,
assuming such acquisition or disposition and any such related payments had been
consummated on the first day of such four-quarter period), would be at least
1.8:1 from the date of the Indenture to and including December 31, 1998, and
2.0:1 thereafter. The Company will not permit any of its Subsidiaries to incur
any Indebtedness (other than Permitted Subsidiary Indebtedness).
Section 10.9. Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Subsidiary to,
directly or indirectly:
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(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 shares of its 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 Subsidiary of the Company);
(iii) prior to any scheduled principal payment, sinking fund
payment or maturity of any Subordinated Indebtedness, make any principal
payment on, or repurchase, redeem, defease, retire or otherwise acquire
for value, such Subordinated Indebtedness (other than any such
Indebtedness owed to the Company or a Wholly Owned Subsidiary);
(iv) declare or pay any dividend or distribution on any Capital
Stock of any Subsidiary to any Person (other than to the Company or any
of its Wholly Owned Subsidiaries) or purchase, redeem or otherwise
acquire or retire for value any Capital Stock of any Subsidiary held by
any person (other than the Company or any of its Wholly Owned
Subsidiaries);
(v) incur, create, or assume, any guarantee of Indebtedness of
any Affiliate of the Company (other than a Wholly Owned Subsidiary of
the Company); or
(vi) make any Investment in any Person
(other than, in the case of clauses (ii) through (vi) above, Permitted
Investments) (any of the foregoing actions described in clauses (i) through
(vi), other than any such action that is a Permitted Payment (as defined below),
collectively, a "Restricted Payment") (the amount of any such Restricted
Payment, if other than cash, being determined by the Board of Directors, 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 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 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 or Permitted Subsidiary
Indebtedness) under the provisions of Section 10.8; and (3) after giving effect
to the proposed Restricted Payment, the aggregate amount of all such Restricted
Payments declared or made after the date of the B Indenture plus the Permitted
Payments made under clause (b)(vi), do not exceed $5,000,000 plus the sum of:
(A) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period beginning on January 1,
1998 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); plus
(B) the aggregate Net Cash Proceeds received after the date of
the B Indenture by the Company either (x) as capital contributions in
the form of common equity to the Company or (y) 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 in clause (ii)
or (iii) of paragraph (b) below), in each case, other than Net Cash
Proceeds received from the issuance or sale of Qualified Capital Stock
or
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options, warrants or rights to purchase Qualified Capital Stock in, or
otherwise received in connection with, the Refinancing; plus
(C) the aggregate Net Cash Proceeds received after the date of
the B Indenture by the Company (other than from any of its Subsidiaries)
upon the exercise of any options, warrants or rights to purchase
Qualified Capital Stock of the Company; plus
(D) the aggregate Net Cash Proceeds received after the date of
the B 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 the B Indenture, the aggregate of Net Cash Proceeds
from their original issuance; plus
(E) in the case of the disposition or repayment of any Investment
constituting a Restricted Payment made after the date of the B
Indenture, an amount 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 the 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 (vii) being referred to as a "Permitted Payment"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof if at the date of declaration thereof such other
dividend (A) would be permitted by the provisions of paragraph (a) of
this Section and (B) shall be deemed to have been paid on such date of
declaration for purposes of the calculation required by paragraph (a) of
this Section;
(ii) the repurchase, redemption, or other acquisition or
retirement for value 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 the Net Cash Proceeds from
the issuance of such shares of Qualified Capital Stock are, to the
extent so used, excluded from clause (3) (B) of paragraph (a) of this
Section;
(iii) the repurchase, redemption, defeasance, retirement or
acquisition for value or payment of principal of any Subordinated
Indebtedness or Redeemable Capital Stock 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
any Qualified Capital Stock of the Company, provided that the Net Cash
Proceeds from the issuance of such shares of Qualified Capital Stock
are, to the extent so used, excluded from clause (3)(B) 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
"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 Indebtedness being refinanced, or (II)
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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; (2) has an
Average Life to Stated Maturity greater than the remaining Average Life
to Stated Maturity of the Securities; (3) has a Stated Maturity for its
final scheduled principal payment later than 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) the repurchase, redemption, defeasance, retirement,
refinancing, acquisition for value or payment of any Redeemable Capital
Stock through the substantially concurrent issuance of new Redeemable
Capital Stock of the Company, provided that any such new Redeemable
Capital Stock (1) shall have an aggregate liquidation preference that
does not exceed the aggregate liquidation preference of the amount so
refinanced; (2) has an Average Life to Stated Maturity greater than the
remaining Average Life to Stated Maturity of the Securities; and (3) has
a Stated Maturity later than the Stated Maturity for the final scheduled
principal payment of the Securities;
(vi) the repurchase of shares of, or options or warrants to
purchase shares of, common stock of the Company or any of its
Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including
employment agreements) or plans (or amendments thereto) approved by the
Board of Directors under which such individuals purchase or sell or are
granted the option to purchase or sell, shares of such common stock; and
(vii) the repurchase, redemption, defeasance, retirement or
acquisition for value of the 13% Notes on or prior to their scheduled
maturity.
In addition, so long as any of the Series B Securities are
outstanding, the provisions of this section shall not restrict the ability of
any Subsidiary to (i) pay dividends or make any other distribution on its
Capital Stock, (ii) pay any Indebtedness owed to the Company or any other
Subsidiary, (iii) make any Investment in the Company or any other Subsidiary, or
(iv) transfer any of its properties or assets to the Company or any other
Subsidiary, to the extent such prohibition would violate the terms of the B
Indenture as in effect on the Issue Date.
Section 10.10. Limitation on Transactions with Affiliates.
The Company will not, and will not permit any of its 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 or for the benefit of any Affiliate
of the Company (other than the Company or a Subsidiary) unless such transaction
or series of related transactions is entered into in good faith and (a) such
transaction or series of related transactions is on terms that are no less
favorable to the Company or such 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 $1,000,000, 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 value in excess of $10,000,000, either (A) 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 (B) 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
transactions or series of related
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transactions are fair to the Company or such Subsidiary from a financial point
of view; provided, however, that clauses (a) through (c) above shall not apply
to (i) any transaction with an employee or director of the Company or any of its
Subsidiaries entered into in the ordinary course of business (including
compensation and employee benefit arrangements with any officer, director or
employee of the Company or any Subsidiary, including under any stock option or
stock incentive plans), (ii) Restricted Payments made in accordance with Section
10.9 or Permitted Payments, (iii) any transactions related to the Securitization
Facility, (iv) management agreements or similar agreements between (A) the
Company or any Subsidiary and (B) Affiliates in which the Company or any
Subsidiary has made an Investment, and (v) contributions by the Company or any
Subsidiary to a real estate investment trust pursuant to clause (ix) of the
definition of Permitted Investments.
Section 10.11. Limitation on Liens.
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create or incur any Lien of any kind securing any Pari Passu
Indebtedness or Subordinated Indebtedness (including any assumption, guarantee
or other liability with respect thereto by any Subsidiary) upon any property or
assets (including any intercompany notes) of the Company or any Subsidiary owned
on the date hereof or acquired after the date hereof, 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 obligations or liability secured by such Lien
except for Liens (A) securing any Indebtedness which became Indebtedness
pursuant to a transaction permitted under Section 8.1 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 Subsidiary) and which
Indebtedness is permitted under the provisions of Section 10.8, (B) securing any
Indebtedness incurred in connection with any refinancing, renewal, substitutions
or replacements 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 Subsidiaries, or (C) securing Indebtedness
incurred to effect a defeasance of (i) the Securities pursuant to Article IV
hereof or (ii) the Series B Securities pursuant to Article IV of the B
Indenture.
Section 10.12. Limitation on Sale of Assets.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, consummate an Asset Sale unless (i) at least 75% 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 and
evidenced in a Board Resolution).
(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 then
outstanding as required by the terms thereof, or the Company determines not to
apply such Net Cash Proceeds to the permanent prepayment of such Senior
Indebtedness, or if no such Senior Indebtedness is then outstanding, then the
Company or a Subsidiary may, within 360 days of the Asset Sale, invest the Net
Cash Proceeds in properties and other assets that (as determined by the Board of
Directors) replace the properties and assets that were the
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subject of the Asset Sale or in properties and assets that will be used in the
businesses of the Company or its Subsidiaries existing on the date of the B
Indenture or in businesses reasonably related or complementary thereto. The
amount of such Net Cash Proceeds not applied to repay Senior Indebtedness or
used or invested within 360 days of the Asset Sale as set forth in this
paragraph constitutes "Excess Proceeds".
(c) When the aggregate amount of Excess Proceeds exceeds $15,000,000,
the Company will apply the Excess Proceeds to the repayment of the Securities
and any other Pari Passu Indebtedness outstanding with provisions requiring the
Company to make an offer to purchase or to purchase or redeem 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 "Securities 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 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 Securities 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 Securities 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 will 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) 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 $1,000, on a date that is not earlier than 30 days and not
later than 60 days from the date the notice of such 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.
(e) The Company will comply with the applicable tender offer rules,
including Rule 14e-l under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
Section 10.13. Purchase of Securities upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each Holder
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
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Section 10.13 (the "Change of Control Offer") and in accordance with the other
procedures set forth in subsections (b), (c), (d) and (e) of this Section 10.13.
(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 by first-class mail,
postage prepaid, at his 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, if applicable, 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 pursuant to Section
10.17), (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 10.13 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 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 10.2;
(8) that Securities must be surrendered not later than one
Business Day prior to the Change of Control Purchase Date to the Paying
Agent at the office of the Paying Agent or to an office or agency
referred to in Section 10.2 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.
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(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 3.9. 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
at least one Business Day 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 attorneys 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 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
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 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 10.13, 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
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(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 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, promptly after the Business Day following the Change of
Control Purchase Date the Trustee shall return any such excess 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 10.14. Limitation on Preferred Stock of Subsidiaries.
The Company will not permit (a) any Subsidiary of the Company to issue
any Preferred Stock, except for (i) Preferred Stock issued to the Company or a
Wholly-Owned Subsidiary and (ii) Preferred Stock issued by a Person prior to the
time (A) such Person becomes a Subsidiary, (B) such Person merges with or into a
Subsidiary or (C) a Subsidiary merges with or into such Person; provided that
such Preferred Stock referred to in clause (ii) above 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 Subsidiary) to acquire Preferred Stock of any Subsidiary from the
Company or any Subsidiary, except, in the case of clause (a) or (b), upon the
acquisition of all the outstanding Preferred Stock of such Subsidiary in
accordance with the terms hereof.
Section 10.14A. Limitation on Senior Subordinated Indebtedness.
The Company will not, 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 unless
such Indebtedness is also pari passu with the Securities or subordinate in right
of payment to the Securities at least to the same extent as the Securities are
subordinate in right of payment to Senior Indebtedness.
Section 10.15. Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or suffer to exist any consensual encumbrance or
restriction on the ability of any Subsidiary to (i) pay dividends or make any
other distribution on its Capital Stock, (ii) pay any Indebtedness owed to the
Company or any other Subsidiary, (iii) make any Investment in the Company or any
other Subsidiary or (iv) transfer any of its properties or assets to the Company
or any other Subsidiary, except for: (a) any encumbrance or restriction pursuant
to any agreement in effect on the date of the B Indenture; (b) any encumbrance
or restriction, with respect to a Subsidiary that is not a Subsidiary of the
Company on the date of the B Indenture, in existence at the time such Person
becomes a Subsidiary of the Company and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary; (c) customary
non-assignment or subletting provisions of any lease, license or other contract;
(d) any restriction entered into in the ordinary course of business contained in
any lease of any Subsidiary or any security agreement or mortgage securing
Indebtedness of any Subsidiary to the extent such restriction restricts the
transfer
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of property subject to such security agreement, mortgage or lease; (e) any
restriction contained in an agreement pursuant to which Permitted Subsidiary
Indebtedness is incurred; and (f) any encumbrance or restriction existing under
any agreement that amends, substitutes, restructures, supplements, extends,
renews, refinances or replaces or otherwise modifies the agreements containing
the encumbrances or restrictions in the foregoing clauses (a), (b), (c), (d) or
(e), or in this clause (f); 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
amended, substituted, restructured, supplemented, extended, renewed, refinanced,
replaced or modified.
Section 10.16. Limitations on Unrestricted Subsidiaries.
The Company will not make, and will not permit its Subsidiaries to make,
an Investment in Unrestricted Subsidiaries unless, at the time thereof, (a) the
aggregate amount of such Investments would not exceed the amount of Restricted
Payments then permitted to be made pursuant to the provisions of Section 10.9 or
(b) such Investment is a Permitted Investment. Except for Permitted Investments,
any Investment in Unrestricted Subsidiaries permitted to be made pursuant to
this covenant (i) must be permitted to be made pursuant to the provisions of
Section 10.9 and 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 10.17. Provision of Financial Statements.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, the Company will, to the extent permitted under the Exchange Act,
file with the SEC the annual reports, quarterly reports and other documents
which the Company would have been required to file with the SEC pursuant to
Sections 13(a) or 15(d) of the Exchange Act if the Company were so subject, such
documents to be filed with the SEC on or prior to the date (a "Required Filing
Date") by which the Company would have been required so to file such documents
if the Company were so subject. The Company will also in any event (x) within 15
days of each Required Filing Date occurring after the issuance of the Securities
(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 would have been required to file with the SEC pursuant to Sections 13(a)
or 15(d) of the Exchange Act if the Company were subject to either of such
Sections and (y) if filing such documents by the Company with the SEC 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 cost. So long as any of the
Securities remain Outstanding, the Company will make available to any
prospective purchaser of Securities or beneficial owner of Securities in
connection with any sale thereof the information required by Rule 144A(d)(4)
under the Securities Act, until such time as the Company has either exchanged
the Securities for securities identical in all material respects which have been
registered under the Securities Act or until such time as the Holders thereof
have disposed of such Securities pursuant to an effective registration statement
under the Securities Act.
Section 10.18. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, on or before a date 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, one of whom shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company, as to
compliance herewith, including whether or not, after a review of the activities
of the Company during such year and of the Company's performance under this
Indenture, to the best knowledge, based on such review, of the signers thereof,
the Company has fulfilled all of its respective obligations and is in compliance
with all conditions and covenants under this Indenture throughout such year
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and, if there has been a Default specifying each Default and the nature and
status thereof and any actions being taken by the Company 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 shall
deliver to the Trustee by registered or certified mail or facsimile transmission
followed by hard copy of an Officers' Certificate specifying such Default, Event
of Default, notice or other action, the status thereof and what actions the
Company is taking or proposes to take with respect thereto, within ten Business
Days of becoming aware of its occurrence.
Section 10.19. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.6 through 10.11 and 10.14 through
10.18, 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.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. 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) In addition, at any time on or 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 35% of the aggregate principal amount
of Securities originally issued (whether on or after the Issue Date) under this
Indenture at a redemption price equal to 109.875% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Redemption Date; provided that at least 65% of the aggregate principal amount of
Securities originally issued under the Indenture 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 related Public Equity Offering and must consummate such redemption
within 90 days of the closing of the Public Equity Offering.
Section 11.2. 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 XI.
Section 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section
11.1 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
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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 11.4. 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 45
days prior to the Redemption Date. The Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable. The amounts to be redeemed shall be
equal to $1,000 or any integral multiple thereof.
If requested by the Company, 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 11.5. 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.
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;
(g) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 10.2 where such Securities are to be surrendered
for payment of the Redemption Price;
(h) 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
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redemption, it shall provide the Trustee with a certificate stating that such
notice has been given in compliance with the requirements of this Section 11.5.
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 11.6. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York time, on 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 10.3) an amount of money in same day funds
sufficient to pay 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 11.6, the Company shall choose a Paying Agent which
shall not be the Company.
Section 11.7. 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. Holders will be required
to surrender the Securities to be redeemed to the Paying Agent at the address
specified in the notice of redemption at least one Business Day prior to the
Redemption Date. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price together with accrued 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 3.9.
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 11.8. 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 10.2 (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.
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ARTICLE XII
SATISFACTION AND DISCHARGE
Section 12.1. 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 3.8 or (ii) all Securities for
whose payment United States 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 10.3) 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 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 has paid or caused to be paid all other sums payable
hereunder by the Company; 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 or any Subsidiary is a
party or by which the Company or any Subsidiary is bound.
Notwithstanding the satisfaction and discharge hereof, the obligations
of the Company to the Trustee under Section 6.6 and, if United States dollars
shall have been deposited with the Trustee pursuant to subclause (2) of
subsection (a) of this Section 12.1, the obligations of the Trustee under
Section 12.2 and the last paragraph of Section 10.3 shall survive.
Section 12.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
United States dollars deposited with the Trustee pursuant to Section 12.1 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 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.
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ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Indebtedness.
Anything in this Indenture or the Securities to the contrary
notwithstanding, the Company covenants and agrees, and each Holder of a
Security, 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 Securities and the payment of the principal of, premium, if
any, and interest on (including any payment required under any provision of this
Indenture and the Securities, including Sections 10.12 and 10.13), each and all
of the Securities and the other Indenture Obligations are hereby expressly made
subordinate and subject in right of payment as provided in this Article to the
prior payment in full, in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of the Senior Indebtedness
(including any interest accruing after the occurrence of an Event of Default
under Section 5.1(g) or (h), whether or not such interest is an allowed claim
enforceable against the debtor in a case brought under the Bankruptcy Law).
As used in this Indenture and the Securities, "paying the Securities",
"payment of the Securities" and similar phrases mean any direct or indirect
payment or distribution by or on behalf of the Company on account of principal
of (or premium, if any) or interest on the Securities, the Indenture Obligations
or other amounts owed by the Company under this Indenture and the Securities
(other than amounts owing to the Trustee pursuant to Section 6.7 hereof) or to
acquire or repurchase pursuant to the provisions of this Indenture or redeem,
retire or defease all or any portion of the Securities or to make any deposit,
payment or transfer in furtherance of the foregoing.
This Article Thirteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders or continue to hold Senior
Indebtedness; and such provisions are made for the benefits of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 13.2. 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, whether voluntary
or involuntary, or whether or not involving insolvency or bankruptcy, then and
in any such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or, as acceptable to the holders of
Senior Indebtedness, in any other manner, 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 or any other corporation that are equity securities or are
subordinate in right of payment to all Senior Indebtedness, that may be
outstanding, to substantially the same 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 or other Indenture Obligations or on account of the
purchase, redemption, defeasance or other acquisition of, or in respect of, the
Securities or other Indenture Obligations (other than amounts previously set
aside with the Trustee, or payments previously made, in either case, in
accordance with the provisions of Sections 4.2 and 4.3 of this Indenture); and
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(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 the 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 in cash or Cash Equivalents or, as acceptable to the holders or
Senior Indebtedness, in any other manner, 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
other Indenture Obligations before all Senior Indebtedness is paid in full, in
cash or Cash Equivalents or, as acceptable to the holder of Senior Indebtedness,
in any other manner, 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
in cash or Cash Equivalents or, as acceptable to the holders of Senior
Indebtedness, in any other manner, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.
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, 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, comply with the conditions set forth in Article Eight.
Section 13.3. Suspension of Payment When Designated Senior Indebtedness
in Default.
(a) Upon the occurrence and during the continuance of any default in the
payment of any Designated Senior Indebtedness beyond any applicable grace period
( a "Payment Default"), no payment (other than amounts previously set aside with
the Trustee or payments previously made, in either case, in accordance with
Section 4.2 and 4.3 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 other Indenture
Obligations, or on account of the purchase, redemption, defeasance or other
acquisition of or in respect of, the Securities or other Indenture Obligations
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, in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, 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.
-88-
(b) (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, in accordance with the provisions of Sections 4.2 or 4.3 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 other Indenture Obligations, or on account of the purchase,
redemption, defeasance or other acquisition of, or in respect of, the Securities
or other Indenture Obligations for the period specified below ("Payment Blockage
Period").
(c) A 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 cured, waived or ceases to exist or on which such
Designated Senior Indebtedness is discharged or paid in full, in cash or Cash
Equivalents or, as acceptable to the holders of Senior Indebtedness, in any
other manner, 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 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 or ceases to exist or on which the Designated Senior Indebtedness
related thereto is discharged or paid in full, in cash or Cash Equivalents or,
as acceptable to the holders of Senior Indebtedness, in any other manner, and
the Trustee is authorized to act in reliance on such notice.
(d) In the event that, notwithstanding the foregoing, the Company or any
Subsidiary shall make any payment or distribution to or for the benefit of the
Trustee or the Holder of any Security prohibited by the foregoing provisions of
this Section, then and in such event such payment or distribution shall be 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.
Section 13.4. 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 or creditors or other marshaling of assets and
liabilities of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
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Section 13.5. Subrogation to Rights of Holders of Senior Indebtedness.
After the payment in full, in cash or Cash Equivalents or, as acceptable
to the holders of Senior Indebtedness, in any other manner, 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, in cash or Cash Equivalents or, as acceptable to the holders of
Securities, in any other manner. 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
account of the Senior Indebtedness.
Section 13.6. Provisions Solely to Define Relative Rights.
The provisions of this Article are and 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, and 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
the 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
13.2, to receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder, (2) under the conditions specified in Section 13.3, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
13.3(d), or (3) as specified in Section 5.2.
Section 13.7. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his 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. If the Trustee
does not file such a claim prior to 30 days before the expiration of the time to
file a claim, the holders of Senior Indebtedness, or any Senior Representative,
may file such a claim on behalf of the Holders of the Securities.
Section 13.8. 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 by any
non-compliance by the
-90-
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 or
increase, 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; and (4) exercise or refrain
from exercising any rights against the Company and any other 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 actions does
not otherwise violate the terms of this Indenture.
(c) The provisions of this Article Thirteen shall be reinstated if at
any time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any holder of Senior Indebtedness upon the insolvency,
bankruptcy or reorganization of the Company or otherwise.
Section 13.9. 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 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 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 representing himself
to be 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
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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 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 13.10. 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 the 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
appraised of the provisions of this Article.
Section 13.11. 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 6.7.
Section 13.12. 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 13.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 13.13. No Suspensions 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 Senior
Indebtedness to receive the cash, property or securities receivable upon the
exercise of such rights or remedies.
Section 13.14. 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 obligation 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
-92-
if it shall in good faith mistakenly (absent negligence or willful misconduct or
violation of Section 13.9(a)) 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
BALLY TOTAL FITNESS HOLDING CORPORATION
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Trust Officer
-94-
SCHEDULE I
EXISTING INDEBTEDNESS
SCHEDULE II
EXISTING UNRESTRICTED SUBSIDIARIES
EXHIBIT A
FORM OF CERTIFICATE
TO BE DELIVERED UPON
TERMINATION OF RESTRICTED PERIOD
On or after __________, 1998
[Trustee Name and Address]
Attention:
Re: Bally Total Fitness Holding Corporation (the "Company") 9-7/8%
Senior Subordinated Notes due 2007 (the "Securities")
Ladies and Gentlemen:
This letter relates to U.S. $_________ principal amount of Securities
represented by the global note certificate (the "Offshore Global Security").
Pursuant to Section 3.6 of the Indenture dated as of December 16, 1998 relating
to the Securities (the "Indenture"), we hereby certify that (1) we are the
beneficial owner of such principal amount of Securities represented by the
Offshore Global Security and (2) we are a person outside the United States to
whom the Securities could be transferred in accordance with Rule 904 of
Regulation S promulgated under the United States Securities Act of 1933, as
amended. Accordingly, you are hereby requested to issue a certificated Security
representing the undersigned's interest in the principal amount of Securities
represented by the Global Security, all in the manner provided by the Indenture.
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 Holder]
By:_________________________
Authorized Signature
A-1
EXHIBIT B
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS
------------, ------
Bally Total Fitness Holding Corporation
c/o [Trustee Name and Address]
Attention: Corporate Trust Division
Re: Bally Total Fitness Holding Corporation (the "Company") 9-7/8%
Senior Subordinated Notes due 2007 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $__________ aggregate
principal amount of the Securities:
1. We understand that the Securities have not been registered under the
United States Securities Act of 1933, as amended (the "Securities Act"), and may
not be sold within the United States or to, or for the benefit of, U.S. Persons
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing the Securities to
offer, resell, pledge or otherwise transfer such Securities prior to the date
which is two years after the later of the date of original issue and the last
date on which the Company or any affiliate of the Company was the owner of such
Securities, or any predecessor thereto (the "Resale Restriction Termination
Date") 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 144A under the Securities
Act ("Rule 144A"), inside the United States to a person we reasonably believe is
a qualified institutional buyer under Rule 144A (a "QIB") that purchases for its
own account or for the account of a QIB to whom notice is given that the
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, (e) inside the
United States to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act that
is acquiring the Securities for its own account or for the account of such an
institutional "accredited investor" for investment purposes and not with a view
to, or for offer or sale in connection with, any distribution thereof in
violation of the Securities Act or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
and the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Securities
is proposed to be made pursuant to clause (e) above prior to the Resale
Restriction Termination Date, the transferor shall deliver a letter from the
transferee substantially in the form of this letter to the Trustee, which shall
provide, among other things, that the transferee is an institutional "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
under the Securities Act and that it is acquiring such Securities for investment
purposes and not for distribution in violation of the Securities Act. We
acknowledge that the Company and the Trustee reserve the right prior to any
offer, sale or other transfer prior to the Resale Restriction Termination Date
of the Securities pursuant to clauses (d), (e) and (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee. As used herein, the terms "United
States", "Offshore
B-1
Transaction", and "U.S. Person" have the respective meanings given to them by
Regulation S under the Securities Act.
2. We are an institutional "accredited investor" (as defined in Rule 501
(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing for
our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or the securities laws of any state of the
United States or any other applicable jurisdiction, provided that the
disposition of our property and the property of any accounts for which we are
acting as fiduciary shall remain at all times within our and their control; and
we have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
3. We are acquiring the Securities purchased by us for our own account
or for one or more accounts as to each of which we exercise sole investment
discretion.
4. We understand that the Trustee will not be required to accept for
registration of transfer any Securities acquired by us, except upon presentation
of evidence satisfactory to the Company and the Trustee that the foregoing
restrictions on transfer have been complied with. We further understand that the
Securities purchased by us will be in the form of definitive physical
certificates and that such certificates will bear a legend reflecting the
substance of this paragraph. We further agree to provide to any person acquiring
any of the Securities from us a notice advising such person that resales of the
Securities are restricted as stated herein and that certificates representing
the Notes will bear a legend to that effect.
5. We acknowledge that you, the Company, the Trustee and others will
rely upon our acknowledgments, representations and agreements set forth herein,
and we agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein cease to be accurate and complete.
6. We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any investor account for which we are acting as a fiduciary or agent.
THIS LETTER 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).
Very truly yours,
By: -------------------------------
(Name of Purchaser)
Date: ------------------------------
B-2
Upon transfer, the Securities should be registered in the name of the
new beneficial owner as follows:
Name: --------------------------------------------------------------------------
Address: -----------------------------------------------------------------------
Taxpayer ID Number: ------------------------------------------------------------
B-3
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S
---------------, -------
[Trustee Name and Address]
Attention:
Re: Bally Total Fitness Holding Corporation (the "Company") 9-7/8%
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 ("Regulation S") under the
United States 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 United States 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 sale has been made in accordance with the
applicable provisions of Rule 903(c)(2) 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-1
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 C 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
December 16, 2000, 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 United States Securities
Act of 1993, as amended, provided by Rule 144A thereunder.
OR
[ ] (b) 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 3.7 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:
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
I-1
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 ("Rule 144A") under the
United States 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)
[Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.]
II-1
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939
AND INDENTURE, DATED AS OF DECEMBER 16, 1998
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
--------------------------------------------------------------------------------
Section 310 (a)(1) 6.9
(a)(2) 6.9
(a)(5) 6.9
(b) 6.7, 6.10
Section 311 (a) 6.13
(b) 6.13
Section 312 (a) 7.1
(b) 7.2
(c) 7.2
Section 313 (a) 7.3
(b) 7.3
(c) 7.3
(d) 7.3
Section 314 (a)(1) 7.4
(a)(2) 7.4
(a)(3) 7.4
(a)(4) 10.18
(c)(1) 1.3
(c)(2) 1.3
(e) 1.3
Section 315 (a) 6.1
(b) 6.2
(c) 6.1
(d) 6.1, 6.3
(e) 5.14
Section 316 (a) (last sentence)1.1 ("Outstanding")
(a)(1)(A) 5.12
(a)(2)(B) 5.13
(b) 5.8
(c) 1.5
Section 317 (a)(1) 5.3
(a)(2) 5.4
(b) 10.3
Section 318 (a) 1.8
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Indenture.
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