Exhibit T3C-2
COVANTA ENERGY CORPORATION
AND
U.S. BANK TRUST NATIONAL ASSOCIATION
as TRUSTEE
7.5% SUBORDINATED UNSECURED NOTES DUE 2012
INDENTURE
Dated as of March [ ], 2004
THE 7.5% SUBORDINATED UNSECURED NOTES DUE 2012 (THE "NOTES") WILL BE INITIALLY
ISSUED IN GLOBAL FORM AND HELD BY DTC. PLAN PARTICIPANTS ENTITLED TO RECEIVE
NOTES WILL BE REQUIRED TO HOLD THEIR INTERESTS DIRECTLY OR INDIRECTLY THROUGH
DTC PARTICIPANTS, AND WILL NOT BE ENTITLED TO RECEIVE PHYSICAL NOTES EXCEPT IN
THE LIMITED CIRCUMSTANCES SET FORTH IN THE INDENTURE.
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
----------- -----------------
310(a).................................................. 7.10
(b)................................................. 7.10
(b)(1).............................................. 7.10
311(a).................................................. 7.11
(b)................................................. 7.11
312(b).................................................. 11.3
(c)................................................. 11.3
313 7.6
314(a)(4)............................................... 3.4
316(c).................................................. 9.4
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 Definitions.............................................................1
1.2 Incorporation by Reference of Trust Indenture Act......................27
1.3 Rules of Construction..................................................27
ARTICLE II
THE NOTES
2.1 Form and Dating........................................................27
2.2 Execution and Authentication...........................................28
2.3 Registrar and Paying Agent.............................................28
2.4 Paying Agent to Hold Money in Trust....................................29
2.5 Holder Lists...........................................................29
2.6 Global Note Provisions.................................................29
2.7 Transfer and Exchange..................................................30
2.8 Xxxxxxxxx, Xxxxxxxxx, Lost or Stolen Notes.............................32
2.9 Temporary Notes........................................................32
2.10 Cancellation...........................................................32
2.11 Defaulted Interest.....................................................33
ARTICLE III
COVENANTS
3.1 Payment of Notes.......................................................34
3.2 Maintenance of Office or Agency........................................34
3.3 Corporate Existence....................................................34
3.4 Compliance Certificate.................................................35
3.5 Further Instruments and Acts...........................................35
3.6 Restricted Payments ...................................................35
3.7 Asset Sales............................................................39
3.8 Transactions with Affiliates...........................................42
3.9 Offer to Repurchase Upon Change of Control.............................43
3.10 Designation of Restricted and Unrestricted Subsidiaries................45
ARTICLE IV
OPTIONAL REDEMPTION OF NOTES
4.1 Optional Redemption....................................................46
4.2 Election to Redeem.....................................................46
4.3 Notice of Redemption...................................................46
4.4 Selection of Notes to Be Redeemed in Part..............................47
4.5 Deposit of Redemption Price............................................47
4.6 Notes Payable on Redemption Date.......................................47
4.7 Unredeemed Portions of Partially Redeemed Note.........................48
4.8 Offer to Purchase by Application of Excess Proceeds....................48
ARTICLE V
SUCCESSOR
5.1 Xxxxxx, Consolidation, or Sale of Assets...............................50
5.2 Successor Corporation Substituted......................................51
ARTICLE VI
DEFAULTS AND REMEDIES
6.1 Events of Default......................................................52
6.2 Acceleration...........................................................52
6.3 Other Remedies.........................................................53
6.4 Waiver of Past Defaults................................................53
6.5 Control by Majority....................................................53
6.6 Limitation on Suits....................................................53
6.7 Rights of Holders to Receive Payment...................................54
6.8 Collection Suit by Trustee.............................................54
6.9 Trustee May File Proofs of Claim, etc..................................54
6.10 Priorities.............................................................55
6.11 Undertaking for Costs..................................................55
ARTICLE VII
TRUSTEE
7.1 Duties of Trustee......................................................55
7.2 Rights of Trustee......................................................56
7.3 Individual Rights of Trustee...........................................57
7.4 Trustee's Disclaimer...................................................58
7.5 Notice of Defaults.....................................................58
7.6 Reports by Trustee to Holders..........................................58
7.7 Compensation and Indemnity.............................................58
7.8 Replacement of Trustee.................................................59
7.9 Successor Trustee by Merger............................................60
7.10 Eligibility; Disqualification..........................................60
7.11 Preferential Collection of Claims Against Company......................60
ARTICLE VIII
DISCHARGE OF INDENTURE
8.1 Satisfaction and Discharge.............................................60
8.2 Survival of Obligations................................................61
ARTICLE IX
AMENDMENTS
9.1 Without Consent of Holders.............................................61
9.2 With Consent of Holders................................................62
9.3 Compliance with Trust Indenture Act....................................63
9.4 Revocation and Effect of Consents and Waivers..........................63
9.5 Notation on or Exchange of Notes.......................................63
9.6 Trustee to Sign Amendments and Supplements.............................63
ARTICLE X
SUBORDINATION OF THE NOTES
10.1 Agreement to Subordinate...............................................64
10.2 Liquidation, Dissolution, Bankruptcy...................................64
10.3 Default on Senior Indebtedness of the Company..........................64
10.4 Acceleration of Payment of Notes.......................................65
10.5 When Distribution Must Be Paid Over....................................65
10.6 Subrogation............................................................65
10.7 Relative Rights........................................................65
10.8 Subordination May Not Be Impaired by Company...........................66
10.9 Rights of Trustee and Paying Agent.....................................66
10.10 Distribution or Notice to Representative...............................66
10.11 Trust Moneys Not Subordinated..........................................66
10.12 Trustee Entitled to Rely...............................................66
10.13 Trustee to Effectuate Subordination....................................67
10.14 Trustee Not Fiduciary for Holders of Senior Indebtedness...............67
10.15 Reliance by Holders of Senior Indebtedness on Subordination
Provisions.............................................................67
10.16 Changes in Senior Indebtedness.........................................68
ARTICLE XI
MISCELLANEOUS
11.1 Trust Indenture Act Controls...........................................68
11.2 Notices................................................................68
11.3 Communication by Holders with Other Holders............................69
11.4 Certificate and Opinion as to Conditions Precedent.....................69
11.5 Statements Required in Certificate or Opinion..........................69
11.6 Rules by Trustee, Paying Agent and Registrar...........................70
11.7 Legal Holidays.........................................................70
11.8 Governing Law, etc.....................................................70
11.9 No Recourse Against Others.............................................71
11.10 Successors.............................................................71
11.11 Duplicate and Counterpart Originals....................................71
11.12 Severability...........................................................71
11.13 Table of Contents; Headings............................................71
INDENTURE, dated as of March [___], 2004, between Covanta Energy
Corporation, a Delaware corporation (the "Company") and U.S. Bank Trust National
Association (the "Trustee"), as Trustee.
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 7.5%
Subordinated Unsecured Notes due 2012 issued hereunder.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
1.1 Definitions.
"Agent Members" has the meaning assigned to it in Section 2.6(b).
"Adjusted EBITDA" means, for any period, for the Company and its
Consolidated Subsidiaries (i) without duplication, the aggregate amount derived
by combining the amounts for such period of (a) "Operating income (loss)", plus
(b) "Net Depreciation and Amortization Expense", plus (c) "Amortization of
premium and discount, net", plus (d) "Unbilled receivables", to the extent
associated with accretion accounting for Limited Recourse Debt relating to
Projects of the Company and its Subsidiaries, minus (e) "Equity in income from
unconsolidated investments", minus (ii) without duplication, the aggregate
amount derived by combining the amounts (each expressed as a positive number)
for such period of (a) "Payment of debt", to the extent consisting of principal
payments on Limited Recourse Debt relating to Projects of the Company and its
Subsidiaries, plus (b) "Minority interests", plus (c) the change in accreted
value of the High Yield Notes, as each such line item referred to in clauses
(i)(a), (i)(e) and (ii)(b) is reflected in the Company's consolidated statement
of income prepared in conformity with GAAP and as each such line item referred
to in clauses (i)(c), (i)(d) and (ii)(a) is reflected in the Company's
consolidated statement of cash flows prepared in conformity with GAAP, in each
case reported in a manner consistent with the Company's reporting of such amount
in its last quarterly or annual report (as the case may be) on Form 10-Q or Form
10-K, respectively, filed with the Commission prior to the Issue Date, whether
such line items are so titled or otherwise titled; provided, however, that with
respect to any such period ending during 2008, each of the line items referred
to above shall be calculated as if the terms of the service agreement of the
Company and its Subsidiaries relating to the Alexandria Project in effect for
fiscal year 2007 continued in effect during 2008, without giving effect to any
negative impact on Adjusted EBITDA from the terms of any extension in 2008 of
such service agreement.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; that beneficial
ownership of 10% or more of the Voting Stock of a Person shallbe and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Approved DHC Investor" means any Person that acquires shares of
common stock of DHC pursuant to a transaction determined by at least a majority
of the members of the board of directors of DHC (who are not representatives,
nominees or Affiliates of such Person) to be in the best interests of DHC and
its stockholders.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets, property or rights (other than the sale of Equity Interests of
the Company by the Company); provided that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole will be governed by
Section 3.9 or Section 5.1 and not by Section 3.7; and
(2) the issuance of Equity Interests by any Restricted Subsidiary
of the Company or the sale of Equity Interests in any Restricted
Subsidiary of the Company.
Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:
(1) any single transaction or series of related transactions that
involves assets, property or rights or the issuance of Equity Interests
having a fair market value, or yielding Net Proceeds, of less than $10.0
million;
(2) any transfer of assets, property or rights by the Company to
a Restricted Subsidiary of the Company or by a Restricted Subsidiary of
the Company to the Company or another Restricted Subsidiary of the
Company;
(3) an issuance of Equity Interests by a Restricted Subsidiary of
the Company to the Company or a Restricted Subsidiary of the Company;
(4) the sale, lease, sublease or assignment of equipment,
inventory, accounts receivable or other assets, property or rights in
the ordinary course of business;
(5) the disposition of equipment no longer used or useful in the
business of the Company or any of its Restricted Subsidiaries;
(6) a Sale/Leaseback Transaction with respect to any assets
within 90 days of the acquisition of such assets which is not prohibited
by the High Yield Notes Indenture;
(7) the sale or other disposition of Cash Equivalents;
(8) the grant of any license of patents or trademarks or
registrations therefor and other similar intellectual property in the
ordinary course of business;
(9) the granting of any lien (or the foreclosure thereon) which
is not prohibited by the High Yield Notes Indenture;
(10) the surrender or waiver of contract rights or the
settlement, release or surrender of a contract, tort or other litigation
claim in the ordinary course of business;
(11) any sale of Indebtedness or other securities of an
Unrestricted Subsidiary of the Company;
(12) a Restricted Payment permitted to be made under Section 3.6
or a Permitted Investment; or
(13) any issuance of employee stock options or stock awards
pursuant to benefit plans in existence on the Issue Date.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate implicit in such transaction, determined in accordance with GAAP)
of the total obligations of the lessee for net rental payments during the
remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended or may be, at the
option of the lessor, extended).
"Authenticating Agent" has the meaning assigned to it in Section
2.2(d).
"Bank Indebtedness" means any and all amounts payable under or in
respect of the Credit Agreements and any Permitted Refinancing Indebtedness with
respect thereto, as amended from time to time, including principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Guarantor whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof.
"Bankruptcy Court" means the United States Bankruptcy Court for
the Southern District of New York and any other court properly exercising
jurisdiction over any relevant case under Chapter 11 of the Bankruptcy Law.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or non-U.S. law for the relief of debtors.
"Bankruptcy Event of Default" means:
(i) the Company or any Restricted Subsidiary of the Company (other than
a Bankrupt Subsidiary) that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, pursuant to or within the meaning of any Bankruptcy Law: (A)
commences a voluntary case; (B) consents to the entry of an order for relief
against it in an involuntary case; (C) consents to the appointment of or taking
possession by a custodian, receiver, liquidator, trustee, assignee or
sequestrator of it or for all or substantially all of its property; or (D) makes
a general assignment for the benefit of its creditors; or
(ii) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (A) is for relief against the Company or any Restricted
Subsidiary of the Company (other than a Bankrupt Subsidiary) that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company
that, taken as a whole, would constitute a Significant Subsidiary in an
involuntary case; or (B) appoints a custodian, receiver, liquidator, trustee,
assignee or sequestrator of the Company or any Restricted Subsidiary of the
Company (other than a Bankrupt Subsidiary) that is a Significant Subsidiary or
for all or substantially all of the property of the Company or any Restricted
Subsidiary of the Company that is a Significant Subsidiary or, in either case,
any group of Restricted Subsidiaries of the Company that, taken as a whole,
would constitute a Significant Subsidiary; or (C) orders the liquidation of the
Company or any Restricted Subsidiary of the Company (other than a Bankrupt
Subsidiary) that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken as a whole, would constitute a
Significant Subsidiary; and the order or decree remains unstayed and in effect
for 60 consecutive days.
"Bankrupt Subsidiary" means any of Covanta Xxxxxx Holdings I,
Inc., a Virginia corporation, Covanta Xxxxxx Holdings II, Inc., a California
corporation, Covanta Xxxxxx Energy Resource Co. LP, a Delaware limited
partnership, Covanta Lake II, Inc., a Florida corporation, Covanta Tampa
Construction, Inc., a Delaware corporation or Covanta Tampa Bay, Inc., a Florida
corporation, in each case so long as such Person remains subject to the Chapter
11 Cases before the Bankruptcy Court.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Own" and "Beneficially Owned" have a
corresponding meaning.
"Board of Directors" means, the Board of Directors of the
Company.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
is to be made, the amount of the liability in respect of a capital lease that
would at that time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means:
(i) in the case of a corporation, corporate stock;
(ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(iv) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means:
(i) United States dollars;
(ii) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the United
States government having maturities of not more than one year from the date of
acquisition;
(iii) time deposits, demand deposits, certificates of deposit and
eurodollar time deposits with maturities of one year or less from the date of
acquisition, bankers' acceptances with maturities not exceeding one year and
overnight bank deposits, in each case, with any bank lender party to the First
Lien Letter of Credit Facility or an Affiliate thereof or with any domestic
commercial bank having capital and surplus in excess of $500.0 million and a
Thomson Bank Watch Rating of "B" or better;
(iv) securities issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Xxxxx'x Investor Service, Inc. ("Moody's") or Standard & Poor's Corporation
("S&P") or any successor thereto;
(v) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above;
(vi) commercial paper having one of the two highest ratings obtainable
from Xxxxx'x or S&P and in each case maturing within one year after the date of
acquisition; and
(vii) money market funds at least 95% of the assets of which constitute
Cash Equivalents of the kinds described in clauses (ii) through (vi) of this
definition.
"Certificated Note" means any Note issued in fully-registered
certificated form (other than a Global Note), which shall be substantially in
the form of Exhibit A.
"Change of Control" means the occurrence of any of the following:
(1) any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act), other than one or more Permitted Holders, becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the Company, whether as a result of
the issuance of securities of the Company, any merger, consolidation,
liquidation or dissolution of the Company, any direct or indirect
transfer of securities or otherwise; provided that the creation of a
holding company to own all of the Capital Stock of the Company will not
be deemed to constitute a Change of Control under this clause (1) if,
immediately after consummation of such transaction, the holders of the
Capital Stock of such holding company are the same holders of the
Capital Stock of the Company immediately before such transaction and the
percentage holding of such holders is unaffected by the creation of such
holding company;
(2) the first day on which a majority of the members of the Board
of Directors are not Continuing Directors;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company, other than to effect a Change of Domicile;
or
(4) the sale, lease or transfer, other than by way of merger or
consolidation, in one or a series of related transactions, of all or
substantially all the assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" or "group" as that term is
used in Section 13(d)(3) of the Exchange Act (other than to the Company,
any Guarantor or one or more Permitted Holders or other than to effect a
Change of Domicile).
"Change of Domicile" means a transaction or series of related
transactions, including without limitation (1) a merger, amalgamation,
combination or consolidation of the Company with or into another Person, (2) the
acquisition of all the Capital Stock of the Company or (3) the sale, transfer,
conveyance or other disposition of all or substantially all the assets of the
Company and its Subsidiaries taken as a whole to another Person, the sole
purpose of which is to reincorporate the Company in another jurisdiction or
organize a successor entity to the Company in another jurisdiction.
"Chapter 11 Cases" means those bankruptcy cases jointly
administered under the caption "In re Xxxxx New York Services, Inc., et al.,"
Case Nos. 02-40826 (CB), et al.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Company" means the party named as such in the introductory
paragraph to this Indenture, and any and all successors thereto.
"Company Order" has the meaning assigned to it in Section 2.2(c).
"Consolidated Cash Interest Expense" means, for any period, (i)
Consolidated Interest Expense for such period minus (ii) to the extent included
in Consolidated Interest Expense for such period, the change in accreted value
of the High Yield Notes, interest paid in kind and not in cash during such
period and any other amounts not paid or payable in cash.
"Consolidated Coverage Ratio" means, with respect to the Company
and its Consolidated Subsidiaries, as of any date of determination, the ratio
of:
(1) the aggregate amount of Adjusted EBITDA for the period of the most
recent four consecutive fiscal quarters (commencing on or after the
Issue Date) for which internal financial statements are available prior
to the date of such determination to
(2) Consolidated Cash Interest Expense for such four fiscal quarters;
provided, however, that:
(A) if the Company or any of its Restricted Subsidiaries
has incurred any Indebtedness since the beginning of such period
that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an incurrence of Indebtedness, Adjusted EBITDA
and Consolidated Cash Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been incurred on the
first day of such period (in each case other than Indebtedness
incurred under any revolving credit facility, in which case
interest expense shall be computed based upon the average daily
balance of such Indebtedness during the applicable period) and
the discharge of any other Indebtedness repaid, repurchased,
defeased (whether legally or as to covenants only) or otherwise
discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period;
(B) if the Company or any of its Restricted Subsidiaries
has repaid, repurchased, defeased or otherwise discharged,
including permanent reductions in letter of credit commitments,
any Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased (whether
legally or as to covenants only) or otherwise discharged,
including permanent reductions in letter of credit commitments
(in each case, if such Indebtedness has been permanently repaid
and has not been replaced, other than Indebtedness incurred under
any revolving credit facility unless such Indebtedness is
permanently reduced, in which case interest expense shall be
computed based upon the average daily balance of such
Indebtedness during the applicable period) on the date of the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio, Adjusted EBITDA and Consolidated Cash Interest
Expense for such period shall be calculated on a pro forma basis
as if such discharge had occurred on the first day of such period
and as if the Company or such Restricted Subsidiary has not
earned any interest income actually earned during such period in
respect of cash or Cash Equivalents used to repay, repurchase,
defease or otherwise discharge such Indebtedness;
(C) if since the beginning of such period, the Company or
any of its Restricted Subsidiaries has made any Asset Sale,
Adjusted EBITDA for such period shall be reduced by an amount
equal to Adjusted EBITDA (if positive) directly attributable to
the assets that are the subject of such Asset Sale for such
period or increased by an amount equal to Adjusted EBITDA (if
negative) directly attributable thereto for such period, and
Consolidated Cash Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Cash Interest
Expense directly attributable to any Indebtedness of the Company
or any Restricted Subsidiary of the Company repaid, repurchased,
defeased or otherwise discharged with respect to the Company and
its continuing Restricted Subsidiaries in connection with such
Asset Sale for such period (or, if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Cash Interest
Expense for such period directly attributable to the Indebtedness
of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(D) if since the beginning of such period, the Company or
any of its Restricted Subsidiaries (by merger or otherwise) has
made an Investment in any Restricted Subsidiary (or any Person
that becomes a Restricted Subsidiary) or an acquisition of
assets, including any such Investment or acquisition of assets
occurring in connection with a transaction causing a calculation
to be made hereunder, which constitutes all or substantially all
of an operating unit of a business, Adjusted EBITDA and
Consolidated Cash Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the
Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
(E) if since the beginning of such period, any Person
(that subsequently became a Restricted Subsidiary of the Company
or was merged with or into the Company or any of its Restricted
Subsidiaries since the beginning of such period) shall have made
any Asset Sale or any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (C) or (D)
above if made by the Company or any of its Restricted
Subsidiaries during such period, Adjusted EBITDA and Consolidated
Cash Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Asset Sale, Investment
or acquisition of assets occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto and the amount of Consolidated Cash Interest Expense associated with any
Indebtedness incurred in connection therewith, the pro forma calculations shall
be determined in good faith by a responsible financial or accounting officer of
the Company. Any such pro forma calculations shall reflect any pro forma expense
and cost reductions attributable to such acquisitions, to the extent such
expense and cost reduction would be consistent with Regulation S-X, promulgated
under the Securities Act, as such regulation is in effect from time to time, and
permitted by the Commission to be reflected in pro forma financial statements
included in a registration statement filed with the Commission.
If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest expense on such Indebtedness shall be calculated
as if the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Hedging Obligation
applicable to such Indebtedness if such Hedging Obligation has a remaining term
as at the date of determination in excess of twelve months).
"Consolidated Coverage Ratio Test" means, that the Company's
Consolidated Coverage Ratio at the time of any incurrence of Indebtedness, after
giving pro forma effect to such incurrence or issuance as of such date and to
the use of proceeds therefrom, as if the same had occurred at the beginning of
the most recently ended four fiscal quarter period of the Company (commencing on
or after the Issue Date) for which internal financial statements are available,
is no less than 2.00 to 1.00.
"Consolidated Interest Expense" means, for any period, (i) the total
interest expense, net of interest income, of the Company and its Consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, minus
(ii) interest expense incurred by the Company or its Consolidated Subsidiaries
in such period in connection with Indebtedness constituting Non-Recourse Debt or
Limited Recourse Debt, determined on a consolidated basis in accordance with
GAAP, plus (iii) to the extent incurred by the Company or its Consolidated
Subsidiaries in such period but not included in such interest expense, without
duplication, determined in each case on a consolidated basis in accordance with
GAAP, except to the extent related to Non-Recourse Debt and Limited Recourse
Debt:
(1) interest expense attributable to Capital Lease Obligations
and the imputed interest with respect to Attributable Debt;
(2) amortization of debt discount;
(3) amortization of debt issuance costs (other than any such
costs associated with the Indebtedness incurred by the Company or its
Subsidiaries in accordance with the Plan of Reorganization);
(4) amortization of capitalized interest;
(5) noncash interest expense;
(6) commissions, discounts and other fees and charges
attributable to letters of credit and bankers' acceptance financings;
(7) interest or dividends accrued and unpaid on any Indebtedness
of any other Person to the extent such Indebtedness is Guaranteed by the
Company or any Consolidated Subsidiary;
(8) net payments, if any, pursuant to Hedging Obligations
(including amortization of fees);
(9) dividends in respect of all Disqualified Stock of the Company
and all Preferred Stock of any of its Consolidated Subsidiaries, to the
extent held by Persons other than the Company or another Consolidated
Subsidiary; and
(10) cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income
or loss of the Company and its Consolidated Subsidiaries for such period
determined in accordance with GAAP; provided, however, that:
(1) net income of any Person (other than the Company) which is
not a Restricted Subsidiary, shall be excluded from such Consolidated
Net Income, except that:
(A) subject to the limitations contained in clause (4)
below, the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income
up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted
Subsidiary of the Company as a dividend or other distribution
(subject, in the case of a dividend or other distribution made to
a Restricted Subsidiary of the Company, to the limitations
contained in clause (2) below); and
(B) the Company's equity in a net loss of any such Person
for such period shall be included in determining such
Consolidated Net Income;
(2) net income (or loss) of any Restricted Subsidiary of the
Company, other than a Guarantor, to the extent that the declaration or
payment of dividends or similar distributions by such Restricted
Subsidiary of that income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or
is, directly or indirectly, restricted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Restricted Subsidiary
or its stockholders or other holders of its equity, which restrictions
have not been legally and effectively waived, shall be excluded from
such Consolidated Net Income except that:
(A) subject to the limitations contained in clause (4)
below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary of the
Company as a dividend or other distribution (subject, in the case
of a dividend or other distribution made to another Restricted
Subsidiary of the Company, to the limitation contained in this
clause); and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(3) any gain (or loss) realized upon the sale or other
disposition of any asset of the Company or any of its Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction) that
is not sold or otherwise disposed of in the ordinary course of business
and any gain (or loss) realized upon the sale or other disposition of
any Capital Stock of any Subsidiary of the Company shall be excluded
from such Consolidated Net Income (without regard to abandonments or
reserves relating thereto);
(4) amounts specified in clause (ii)(a) of the definition of
Adjusted EBITDA (determined in accordance with such definition) shall be
excluded from such Consolidated Net Income;
(5) any extraordinary gain or loss shall be excluded from such
Consolidated Net Income;
(6) the cumulative effect of a change in accounting principles
shall be excluded from such Consolidated Net Income;
(7) gains or losses due solely to fluctuations in currency values
and the related tax effects determined in accordance with GAAP shall be
excluded from such Consolidated Net Income;
(8) any non-cash deferred tax expense shall be excluded from such
Consolidated Net Income;
(9) Fresh Start Charges and reorganization charges taken in
connection with the Plan of Reorganization shall be excluded from such
Consolidated Net Income;
(10) amortization of debt issuance costs in respect of
Indebtedness incurred by the Company or its Subsidiaries in accordance
with the Plan of Reorganization shall be excluded from such Consolidated
Net Income;
(11) any charges resulting from the application of Statement of
Financial Accounting Standards No. 142 or 145 shall be excluded from
such Consolidated Net Income; and
(12) the results of operations of CPIH and its Subsidiaries shall
be excluded in determining such Consolidated Net Income.
"Consolidated Subsidiaries" means the Restricted Subsidiaries of
the Company; provided, however, that the interest of the Company or any of its
Restricted Subsidiaries in an Unrestricted Subsidiary will be accounted for as
an Investment.
"Continuing Directors" means, as of any date of determination,
those members of the Board of Directors of the Company who: (a) were members of
the Board of Directors on the Issue Date; or (b) were nominated for election or
elected to the Board of Directors with the affirmative vote of, or whose
election or appointment was otherwise approved or ratified (whether before or
after nomination or election) by, at least a majority of the Continuing
Directors who were members of the Board of Directors at the time of the
nomination, election or approval, as applicable.
"Corporate Services Reimbursement Agreement" means the corporate
services and expense reimbursement agreement entered into by DHC and the Company
dated March [__], 2004, and any amendments, modifications or extensions thereof
on terms not materially less favorable to the Company and its Restricted
Subsidiaries, taken as a whole, than the terms of such agreement as in effect on
the Issue Date.
"Corporate Trust Office" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at U.S. Bank National Association,
000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx, Attention: Corporate Trust
Services, or such other address as the Trustee may designate from time to time
by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as such successor Trustee
may designate from time to time by notice to the Holders and the Company).
"CPIH" means Covanta Power International Holdings, Inc., a
Delaware corporation, and any and all successors thereto.
"CPIH Reimbursement Agreement" means the Management Services &
Reimbursement Agreement entered into by CPIH, the Company and certain of their
respective Subsidiaries on the Issue Date, as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Credit Agreements" means the First Lien Letter of Credit
Facility and the Second Lien Letter of Credit Facility (each being referred to
individually herein as a "Credit Agreement").
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which is,
or with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Defaulted Interest" means overdue installments of interest on
the Notes.
"Deposit Account" means a demand, time, savings, passbook or
similar account maintained with a Person engaged in the business of banking,
including a savings bank, savings and loan association, credit union or trust
company, [in each case that qualifies under clause (iii) of the definition of
"Cash Equivalents".]
"DHC" means Xxxxxxxxx Holding Corporation, a Delaware
corporation, and any and all successors thereto.
"Disqualified Stock" means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder of such Capital
Stock), or upon the happening of any event, matures, excluding any maturity as
the result of the redemption thereof at the option of the issuer thereof, or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder of such Capital Stock, in whole or in
part, on or prior to the date on which the Notes mature, except to the extent
that such Capital Stock is solely redeemable with, or solely exchangeable for,
any Capital Stock that is not Disqualified Stock; provided that only the portion
of the Capital Stock or other security which so matures, is mandatorily
redeemable or is so redeemable at the option of the holder prior to such date
shall be deemed to be Disqualified Stock; provided further that if such Capital
Stock or other security is issued to and held by any employee pursuant to any
plan program or arrangement or any plan for the benefit of employees of the
Company or its Subsidiaries or by any such plan to such employees, such Capital
Stock or other security shall not constitute Disqualified Stock solely because
it may be required to be repurchased by the Company or any of its Subsidiaries
in order to satisfy applicable statutory or regulatory obligations or as a
result of such employee's termination, death or disability. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of such Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an Asset Sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 3.6.
"DTC" means The Depository Trust Company, its nominees and their
respective successors and assigns, or such other depositary institution
hereinafter appointed by the Company that is a clearing agency registered under
the Exchange Act.
"Equity Interests" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Event of Default" has the meaning assigned to it in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreements) in
existence on the Issue Date or otherwise issued in accordance with the Plan of
Reorganization.
"First Lien Letter of Credit Facility" means the Credit
Agreement, dated as of March [ ], 2004, by and among the Company, the guarantors
party thereto, Deutsche Bank AG, Securities, Inc., as documentation agent, Bank
of America, N.A., as administrative agent, and the lenders party thereto,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended
(including any amendment and restatement thereof), modified, renewed,
supplemented, refunded, replaced or refinanced in whole or in part from time to
time, including any agreement, extending the maturity of, consolidating or
otherwise restructuring (including adding subsidiaries of the Company as
additional guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
of any other agent, lender or group; provided, however, that in no case shall
any such amendment, modification, renewal, supplementation, refunding,
replacement or refinancing cause the First Lien Letter of Credit Facility to
fail to comply with clause 3(b) of the definition of Senior Indebtedness,
without regards to the duration of letters of credit issued thereunder.
"Fiscal Year" means the fiscal year of the Company and its
subsidiaries ending on December 31st of each calendar year.
"Fresh Start Charges" means, for any period, the aggregate
non-cash charges of the Company and its Restricted Subsidiaries arising from the
application of fresh start accounting principles, determined on a consolidated
basis in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, as in effect from time to time.
"Global Note" means any Note issued in fully-registered
certificated form to DTC (or its nominee), as depositary for the beneficial
owners thereof, which shall be substantially in the form of Exhibit A, with
appropriate legends as specified in Exhibit A.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise)
or
(2) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include
(i) endorsements of negotiable instruments for collection or deposit in the
ordinary course of business or (ii) Performance Guarantees. The term "guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" means, with respect to any specified
Person, the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements;
(2) other agreements or arrangements designed to protect such
Person against fluctuations in currency exchange rates or interest
rates; and
(3) forward agreements or arrangements designed to hedge against
fluctuation in electricity rates pertaining to electricity produced by a
Project, so long as the contractual arrangements relating to such
Project contemplate that the Company or its Subsidiaries shall deliver
such electricity to third parties.
"High Yield Notes Documents" means those 8.25% Senior Secured
Notes due 2011 (the "High Yield Notes") issued by the Company pursuant to the
indenture between the Company, the subsidiary guarantors named therein and U.S.
Bank National Association, as trustee, dated March [__], 2004 (the "High Yield
Notes Indenture"), and all related documents, as such notes, indenture and such
other documents and the obligations thereunder may be amended, extended,
restated, supplemented or otherwise modified from time to time.
"Holder" means the Person in whose name a Note is registered in
the Note Register.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication) the following items if and to the extent
that any of them (other than items specified under clauses (3), (8) and (9)
below) would appear as a liability or, in the case of clause (6) only, Preferred
Stock on the balance sheet of such Person, prepared in accordance with GAAP:
(1) the principal amount of and premium, if any, in respect of
indebtedness of such Person for borrowed money;
(2) the principal amount of and premium, if any, in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(3) all obligations of such Person in respect of letters of
credit, bankers' acceptances, or other similar instruments (including
reimbursement obligations with respect thereto, but excluding
obligations in respect of letters of credit issued in respect of Trade
Payables);
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than twelve months after the date of placing
such property in service or taking delivery and title thereto or the
completion of such services;
(5) all Capital Lease Obligations and all Attributable Debt of
such Person;
(6) the amount of all obligations of such Person with respect to
the redemption, repayment or repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends);
(7) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness of such
Person shall be the lesser of:
(A) the fair market value of such asset at such date of
determination and
(B) the amount of such Indebtedness of such other Persons;
(8) Hedging Obligations of such Person;
(9) all obligations of such Person in respect of Insurance
Premium Financing Arrangements; and
(10) all obligations of the type referred to in clauses (1)
through (9) of other Persons and all dividends or distributions of other
Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise, including by means of any Guarantee.
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations described above, at such date;
provided, however, that the amount outstanding at any time of any Indebtedness
issued with original issue discount will be deemed to be the face amount of such
Indebtedness less the remaining unaccreted portion of the original issue
discount of such Indebtedness at such time, as determined in accordance with
GAAP.
"Indenture" means this Indenture as amended or supplemented from
time to time, including the Exhibits hereto.
"Insurance Premium Financers" means Persons who are not
Affiliates of the Company who advance insurance premiums for the Company and its
Subsidiaries pursuant to Insurance Premium Financing Arrangements.
"Insurance Premium Financing Arrangements" means, with respect to
any Person, agreements with Insurance Premium Financers pursuant to which such
Insurance Premium Financers advance insurance premiums for or on behalf of such
Person. Insurance Premium Financing Arrangements (i) shall not provide, for the
benefit of such Insurance Premium Financers, any security interest in any
property of the Company or any of its Subsidiaries other than gross unearned
premiums for the insurance policies that are the subject of such arrangements,
and (ii) shall not contain any provision or contemplate any transaction
prohibited by the Indenture.
"Intercreditor Agreement" means that certain intercreditor
agreement, dated as of March [__], 2004, by and among the Company, the Company's
subsidiaries listed on the signature pages thereto, the financial institutions
listed on the signature pages thereto, Bank of America, N.A., as administration
agent, Deutsche Bank Securities, Inc., as documentation agent, DHC and the
trustee of the High Yield Notes Indenture, as amended (including any amendment
and restatement thereof), supplemented or otherwise modified from time to time.
"Interest Payment Date" means the stated due date of an
installment of principal and interest on the Notes as specified in the Form of
Face of Note contained in Exhibit A.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the form of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Subsidiary of the Company sells or otherwise disposes of any Equity
Interests of any direct or indirect Restricted Subsidiary of the Company such
that, after giving effect to any such sale or disposition, such Person is no
longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Company's Investments in such Restricted Subsidiary
that were not sold or disposed of in an amount determined as provided in the
final paragraph of Section 3.6. Any deemed investment in any Person not
involving a transfer of cash or other assets to such Person and resulting solely
from the application of pushdown accounting rules will not constitute an
Investment.
"Investor Parties" means (i) D.E. Shaw Laminar Portfolios,
L.L.C., (ii) SZ Investments, LLC, and (iii) Third Avenue Value Fund, Inc.
"Issue Date" means March [__], 2004.
"Legal Holiday" has the meaning assigned to it in Section 11.7.
"Limited Recourse Debt" means, with respect to any Subsidiary of
the Company, Indebtedness of such Subsidiary with respect to which the recourse
of the holder or obligee of such Indebtedness is limited to (i) assets
associated with a Project (which in any event shall not include assets held by
the Company or any Subsidiary other than a Subsidiary whose sole business is the
ownership and/or operation of such Project and substantially all of whose assets
are associated with such Project) in respect of which such Indebtedness was
incurred or (ii) the Equity Interests in such Subsidiary, but in the case of
clause (ii) only if such Subsidiary's sole business is the ownership and/or
operation of such Project and substantially all of such Subsidiary's assets are
associated with such Project. Indebtedness of a Subsidiary of the Company shall
not fail to be Limited Recourse Debt solely by virtue of the fact that the
holders of such Limited Recourse Debt have recourse to the Company or another
Subsidiary of the Company pursuant to a Performance Guaranty.
"Management Investors" means the officers and employees of the
Company or a Subsidiary of the Company who acquire Voting Stock of DHC or the
Company on or after the Issue Date.
"Maturity Date" means March [__], 2012.
"Net Proceeds" means the aggregate Cash proceeds received by the
Company in respect of any Asset Sale (including, without limitation, any Cash
received upon the sale or other disposition of any non-Cash consideration
received in any Asset Sale), net of (i) the costs directly related to such Asset
Sale, including, without limitation, legal, accounting and investment banking
fees, sales commissions and consent fees, (ii) taxes paid or payable as a result
of such Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (iii) amounts required
to be applied to the repayment of indebtedness secured by a lien on the asset or
assets that were the subject of such Asset Sale, and (iv) any reserve for
adjustment in respect of the sale price of such asset or assets established in
accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company, any Guarantor, nor any
Restricted Subsidiary (i) provides credit support of any kind (including
any undertaking, agreement or instrument that would constitute
Indebtedness), (ii) is directly liable as a guarantor or otherwise, or
(iii) constitutes the lender; and
(2) no default with respect to which (including any rights that
the holders of the Indebtedness may have to take enforcement action
against an Unrestricted Subsidiary) would permit upon notice, lapse of
time or both any holder of any other Indebtedness (other than the Notes)
of the Company, any Guarantor, or any Restricted Subsidiary to declare a
default on such other Indebtedness or cause the payment of such other
Indebtedness to be accelerated or payable prior to its stated maturity;
provided that Performance Guarantees not prohibited under the
High Yield Note Indenture will not cause any such Indebtedness not to be
Non-Recourse Debt.
"Note Custodian" means the custodian with respect to any Global
Note appointed by DTC, or any successor Person thereto, and shall initially be
the Trustee.
"Note Register" has the meaning assigned to it in Section 2.3(a).
"Notes" means any of the Company's 7.5% Subordinated Unsecured
Notes due 2012 issued and authenticated pursuant to this Indenture.
"Obligations" means, with respect to any Indebtedness, any
principal, interest (including, without limitation, Post-Petition Interest),
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing such Indebtedness.
"Officer" means, when used in connection with any action to be
taken by the Company, the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, any Vice President, the Treasurer,
the Controller or the Secretary of the Company.
"Officers' Certificate" means, when used in connection with any
action to be taken by the Company, a certificate signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who,
unless otherwise indicated in this Indenture, may be an employee of counsel for
the Company and who shall be reasonably acceptable to the Trustee.
"Outstanding Notes" means, as of the date of determination, all
Notes theretofore authenticated and delivered under this Indenture, except:
(A) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(B) Notes, or portions thereof, for the payment or redemption of
which money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company or an
Affiliate of the Company) in trust or set aside and segregated in
trust by the Company or an Affiliate of the Company (if the Company or
such Affiliate of the Company is acting as Paying Agent) for the
Holders of such Notes; provided that, if Notes (or portions thereof)
are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(C) Notes which have been surrendered pursuant to Section 2.8 or
in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture, other than any
such Notes in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Notes are held by a bona
fide purchaser in whose hands such Notes are valid obligations of the
Company,
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company, any other obligor of the Notes or any Affiliate of the
Company or of 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 Notes which a Trust Officer of the Trustee actually
knows to be so owned shall be so disregarded. Notes so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Company, any other obligor of the
Notes or any Affiliate of the Company or of such other obligor.
"Paying Agent" has the meaning assigned to it in Section 2.3(a).
"Payment Blockage Notice" has the meaning assigned to it in
Section 10.3(a)(B).
"Performance Guaranty" means any agreement entered into by the
Company or any Restricted Subsidiary of the Company under which the Company or
such Restricted Subsidiary (i) guarantees the performance of a Subsidiary of the
Company under a lease or sublease or under a service, management or operating
agreement relating to a Project or (ii) guarantees the performance of CPIH or
any of its Subsidiaries under a lease or sublease or under a service, management
or operating agreement in existence on the Issue Date, as amended or modified on
terms not materially less advantageous to the Company or such Restricted
Subsidiary.
"Permitted Business" means any business of the type engaged in by
the Company or any of its Restricted Subsidiaries as of the Issue Date or any
business reasonably related, ancillary or complementary thereto.
"Permitted Holders" means (i) DHC and the Management Investors
and (ii) any Related Party of a Person referred to in the immediately preceding
clause (i).
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary of the Company:
(1) in the Company, a Restricted Subsidiary of the Company (other
than a Bankrupt Subsidiary) or a Person that will, upon the making of
such Investment, become a Restricted Subsidiary of the Company;
(2) consisting of intercompany loans to Bankrupt Subsidiaries, so
long as (a) the proceeds of such loans are applied to working capital,
maintenance, operation, payroll and other liquidity requirements in the
ordinary course of business of such Bankrupt Subsidiaries, and (b) the
aggregate amount of such intercompany loans outstanding to all Bankrupt
Subsidiaries at any time does not exceed $3.0 million;
(3) in another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary of the Company;
(4) in Cash Equivalents;
(5) in receivables owing to the Company or any Restricted
Subsidiary of the Company if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms; provided that such trade terms may include such
concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances;
(6) in payroll, travel and similar advances to employees to cover
matters that are expected at the time of such advances ultimately to be
treated as expenses for accounting purposes and that are made in the
ordinary course of business;
(7) in loans or advances to employees made in the ordinary course
of business and not exceeding $4.0 million in the aggregate outstanding
at any one time, of which not more than $2.0 million shall be for
purposes other than employee relocation expenses;
(8) received in settlement of debts created in the ordinary
course of business and owing to the Company or any Restricted Subsidiary
or in satisfaction of judgments;
(9) in any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset Sale that
was made pursuant to and in compliance with Section 3.7 or a transaction
not constituting an Asset Sale by reason of the $10.0 million threshold
contained in the definition thereof;
(10) that constitutes a Hedging Obligation or commodity hedging
arrangement entered into for bona fide hedging purposes of the Company
in the ordinary course of business and otherwise in accordance with this
Indenture;
(11) in securities of any trade creditor, supplier or customer
received in settlement of obligations or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency
of such trade creditor, supplier or customer;
(12) acquired as a result of a foreclosure with respect to any
secured Investment or other transfer of title with respect to any
secured Investment in default;
(13) consisting of purchases and acquisitions of inventory,
supplies, materials, equipment or contract rights or licenses or leases
of intellectual property, in any case, in the ordinary course of
business;
(14) consisting of intercompany Indebtedness not prohibited under
the High Yield Note Indenture;
(15) consisting of a Guarantee not prohibited under the High
Yield Note Indenture;
(16) the consideration for which consists solely of shares of
Capital Stock (other than Disqualified Stock) of the Company;
(17) required to be made by the Company and its Restricted
Subsidiaries under Performance Guarantees not prohibited under the High
Yield Note Indenture;
(18) deemed to have been made as a result of the acquisition of a
Person that at the time of such acquisition held instruments
constituting Investments that were not made or acquired in contemplation
of such acquisition;
(19) in prepaid expenses and leases, and in utility and workers'
compensation performance and other similar deposits made in ordinary
course of business;
(20) in CPIH and its Subsidiaries and in Unrestricted
Subsidiaries of the Company to fund administrative services including,
but not limited to, payroll, cash management, administration, billing,
procurement, and equity investments the Company is required to make in
CPIH and its Subsidiaries in a net amount not to exceed $20.0 million in
the aggregate outstanding at any one time;
(21) under the CPIH Reimbursement Agreement or Tax Sharing
Agreement;
(22) advances by the Company or a Restricted Subsidiary of the
Company to fund expansion, replacements or improvements in respect of a
publicly-owned Project, which advances are reimbursable by the owner of
the Project;
(23) made pursuant to the Plan of Reorganization; and
(24) other Investments having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value) not exceeding $70.0 million in
the aggregate outstanding at any one time.
"Permitted Junior Securities" means any securities of the Company
or any other Person that are:
(A) common equity securities without special covenants; or
(B) unsecured debt securities expressly subordinated in right of
payment to all Senior Indebtedness (as modified or issued in exchange
for Senior Indebtedness by the Plan of Reorganization or other court
order pursuant to which such securities are issued) that may at the time
be outstanding, to the same extent as, or to a greater extent than, the
Notes are subordinated as provided in the Indenture, and that have a
final maturity date and a Weighted Average Life to Maturity which is at
least one year after than the final maturity of all such Senior
Indebtedness.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries incurred or issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund (A) other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal
amount (or accreted value, if applicable) of the Indebtedness extended,
refinanced, renewed, replaced, defeased (whether legally or as to
covenants only) or refunded (plus all accrued interest on such
Indebtedness and the amount of all fees, expenses and premiums incurred
in connection therewith); provided, however, that, notwithstanding the
foregoing, Permitted Refinancing Indebtedness with respect to the
Company and its Restricted Subsidiaries of the Existing Indebtedness,
may be incurred in an amount not in excess of 110% of the principal
amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus all accrued interest on such Indebtedness and
the amount of all fees, expenses and premiums incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and is subordinated in right
of payment to, the Notes on terms at least as favorable to the Holders
of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary of the Company which is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded;
or (B) Limited Recourse Debt or Non-Recourse Debt of municipally-sponsored
privately-owned Projects so long as the terms of such Permitted Refinancing
Indebtedness, taken as a whole, are not materially more restrictive to the
Company and its Subsidiaries.
"Person" means an individual, partnership, limited partnership,
corporation, company, limited liability company, unincorporated organization,
trust, joint venture, or governmental agency or political subdivision thereof.
"Plan of Reorganization" means the Debtors' Second Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code, filed with the United
States Bankruptcy Court for the Southern District of New York on January 14,
2004, as amended pursuant to the confirmation order thereof dated March
[________], 2004.
"Post-Petition Interest" means all interest accrued or accruing
after the commencement of any insolvency or liquidation proceeding (and interest
that would accrue but for the commencement of any insolvency or liquidation
proceeding) in accordance with an at the contract rate (including, without
limitation, any rate applicable upon default) specified in the agreement or
instrument creating, evidencing or governing any Indebtedness, whether or not,
pursuant to applicable law or otherwise, the claim for such interest is allowed
as a claim in such insolvency or liquidation proceeding.
"Preferred Stock" as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of Capital Stock of any other class of such Person.
"Project" means any waste-to-energy facility, electrical
generation plant, cogeneration plant, water treatment facility or other facility
for the generation of electricity or engaged in another line of business in
which the Company and its Subsidiaries are permitted to be engaged hereunder for
which a Subsidiary or Subsidiaries of the Company was, is or will be (as the
case may be) an owner, operator, manager or builder, and shall also mean any two
or more of such plants or facilities in which an interest has been acquired in a
single transaction, so long as such interest constitutes an existing Investment
on the Issue Date permitted hereunder; provided however, that a Project shall
cease to be a Project at such time that the Company or any of its Subsidiaries
ceases to have any existing or future rights or obligations (whether direct or
indirect, contingent or matured) associated therewith.
"Record Date" has the meaning assigned to it in the Form of Face
of Note contained in Exhibit A.
"Redemption Date" means, with respect to any redemption of Notes,
the date fixed for such redemption pursuant to this Indenture and the Notes.
"Registrar" has the meaning assigned to it in Section 2.3(a).
"Related Party" means (a) with respect to DHC, (i) any direct or
indirect wholly-owned Subsidiary of DHC, any Approved DHC Investor and any
officer, director or employee of DHC or any wholly-owned Subsidiary of DHC, (ii)
any spouse or lineal descendant (including by adoption and stepchildren) of the
officers, directors and employees referred to in clause (a)(i) of this
definition or (iii) any trust, corporation or partnership 100%-in-interest of
the beneficiaries, stockholders or partners of which consists of one or more of
the persons described in clauses (a)(i) or (a)(ii) of this definition; or (b)
with respect to any Management Investor (i) any spouse or lineal descendant
(including by adoption and stepchildren) of such officer or employee or (ii) any
trust, corporation or partnership 100%-in-interest of the beneficiaries,
stockholders or partners of which consists of such officer or employee, any of
the persons described in clause (b)(i) of this definition or any combination
thereof.
"Representative" means any trustee or other authorized agent or
other Representative in any issue of Senior Indebtedness.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company whereby the Company
transfers such property to a Person and the Company leases it from such Person.
"Second Lien Letter of Credit Facility" means the Credit
Agreement, dated as of [ ], 2004, by and among the Company, each of its
subsidiaries listed on the signature pages thereof, the financial institutions
listed on the signature pages thereof and Bank One, N.A., as administrative
agent, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended (including any amendment and restatement thereof), modified, renewed,
supplemented, refunded, replaced or refinanced in whole or in part from time to
time, including any agreement extending the maturity of, consolidating or
otherwise restructuring (including adding Subsidiaries of the Company as
additional guarantors thereunder) all or any portion of the Indebtedness under
such agreement or any successor or replacement agreement and whether by the same
or any other agent, lender or group; provided, however, that in no case shall
any such amendment, modification, renewal, supplementation, refunding,
replacement or refinancing cause the Second Lien Letter of Credit Facility to
fail to comply with clause 3(b) of the definition of Senior Indebtedness,
without regards to the duration of letters of credit issued thereunder.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means, at any date, all Obligations of the
Company under: (1) the Credit Agreements as set forth in the Plan of
Reorganization, (2) the High Yield Notes Documents as set forth in the Plan of
Reorganization, (3) Indebtedness of the Company incurred or issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund the Credit Agreements and the High Yield Notes Documents,
provided, that (a) if the principal amount of such Indebtedness exceeds the
principal amount of such Indebtedness as set forth in the Plan of Reorganization
(plus all accrued interest on such Indebtedness and the amount of all fees,
expenses and premiums incurred in connection therewith) extended, refinanced,
renewed, replaced, defeased (whether legally or as to covenants only) or
refunded, such excess must fall within the limits set forth under (4) below, and
(b) such Indebtedness has a final Stated Maturity later than the final Stated
Maturity of and has a Weighed Average Life to Maturity equal to or greater than
the Weighted Average Life to Maturity of, the Indebtedness being extended,
refinanced, renewed replaced, defeased or refunded, and (4) any other
Indebtedness of the Company with a principal amount of up to $50,000,000, that
is designated by its express terms to be senior to the Notes.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date.
"Special Record Date" has the meaning assigned to it in Section
2.11(b).
"Stated Maturity" means, with respect to any installment of
interest or principal on any Indebtedness, the fixed date on which the payment
of interest or principal is scheduled to be paid in the documentation governing
such Indebtedness, but does not include any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the fixed date
scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person
or (ii) the only general partners of which are that Person or one or
more Subsidiaries of such Person (or any combination thereof);
provided, however, that, except to the extent expressly indicated, the term
"Subsidiary," when used with respect to the Company or its Restricted
Subsidiaries, shall not include CPIH or any of its Subsidiaries.
"Tax Sharing Agreement" means the Tax Sharing Agreement among
DHC, the Company and CPIH and any amendments, modifications or extensions
thereof on terms not materially less favorable to the Company and its Restricted
Subsidiaries, taken as a whole, than the terms of such agreement as in effect on
the Issue Date.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of
1939, as amended, as in effect on the date of this Indenture (except as
otherwise provided in this Indenture).
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors created,
assumed or guaranteed by such Person arising in the ordinary course of business
in connection with the acquisition of goods or services.
"Trustee" means the party named as such in the introductory
paragraph of this Indenture until a successor replaces it in accordance with the
terms of this Indenture and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means any Subsidiary of the Company
that is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a resolution of the Board of Directors, but only to the extent that
such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement or
understanding are not materially less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (i)
to subscribe for additional Equity Interests or (ii) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
will be evidenced by filing with the Trustee a certified copy of the resolution
of the Board of Directors giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the preceding
conditions and was permitted by Section 3.10. If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements to be an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Indenture and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date.
The Board of Directors may at any time designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided that such designation will be deemed to be
an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
will only be permitted if no Default or Event of Default would be in existence
following such designation.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
board of directors or comparable governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (i) the
amount of each then remaining installment, sinking fund, serial maturity
or other required payments of principal, including payment at final
maturity, in respect of the Indebtedness, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment; by
(2) the then outstanding principal amount of such Indebtedness.
1.2 Incorporation by Reference of Trust Indenture Act. If any provision
of this Indenture limits, qualifies or conflicts with the duties that would be
imposed by any of Sections 310 to 317 of the TIA through operation of Section
318(c) thereof on any person if this Indenture were qualified under the TIA,
such imposed duties shall control.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined in the TIA by reference to another statute or defined by Rules
or Regulations of the Commission have the meanings assigned to them by such
definitions.
1.3 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
ARTICLE II
THE NOTES
2.1 Form and Dating.
(a) The Notes will be issued in fully-registered certificated form without
coupons, and only in denominations of $500 and any integral multiple thereof,
and will be issued initially solely in global form. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A.
(b) The terms and provisions of the Notes, the form of which is in Exhibit
A, shall constitute, and are hereby expressly made, a part of this Indenture,
and, to the extent applicable, the Company and the Trustee, by their execution
and delivery of this Indenture expressly agree to such terms and provisions and
to be bound thereby. Except as otherwise expressly permitted in this Indenture,
all Notes shall be identical in all respects. Notwithstanding any differences
among them, all Notes issued under this Indenture shall vote and consent
together on all matters as one class.
(c) The Notes may have notations, legends or endorsements as specified in
Exhibit A or as otherwise required by law, stock exchange rule or DTC rule or
usage. The Company and the Trustee shall approve the form of the Notes and any
notation, legend or endorsement on them. Each Note shall be dated the date of
its authentication.
2.2 Execution and Authentication.
(a) Two Officers shall sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.
(b) A Note shall not be valid until an authorized signatory of the Trustee
manually authenticates the Note. The signature of the Trustee on a Note shall be
conclusive evidence that such Note has been duly and validly authenticated and
issued under this Indenture.
At any time and from time to time after the execution and delivery of this
Indenture, the Trustee shall authenticate and make available for delivery Notes
upon a written order of the Company signed by two Officers or by an Officer and
either an Assistant Treasurer or an Assistant Secretary of the Company (the
"Company Order"). A Company Order shall specify the amount of the Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated. The aggregate principal amount that may be authenticated and
delivered under this Indenture is limited up to $50 million, except for Notes
authenticated and delivered in exchange for or in lieu of Notes pursuant to
Sections 2.7, 2.8, 2.9 and 4.7. Other than Notes authenticated and delivered in
exchange for or in lieu of Notes pursuant to Sections 2.7, 2.8, 2.9 and 4.7,
Notes may only be authenticated and delivered to (i) creditors as provided for
under the Plan of Reorganization, (ii) unsecured creditors under the plans of
reorganization of the Bankrupt Subsidiaries or (iii) additional Holders,
provided that, without increasing the maximum aggregate amount of Notes to be
issued under this Indenture above $50 million (x) the Notes issued to any such
additional Holders shall not exceed 20% of the sum of the aggregate amounts
issued under (i) and (ii) above, and (y) in no event shall any such issuances be
made prior to the completion of all issuances of Notes under (i) and (ii) above.
(c) The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.
(d) The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Notes. Unless limited
by the terms of such appointment, any such Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by the Authenticating
Agent.
2.3 Registrar and Paying Agent.
(a) The Company shall maintain an office or agency in the Borough of
Manhattan, City of New York, where Notes may be presented or surrendered for
registration of transfer or for exchange (the "Registrar"), where Notes may be
presented for payment (the "Paying Agent") and for the service of notices and
demands to or upon the Company in respect of the Notes and this Indenture. The
Registrar shall keep a register of the Notes and of their transfer and exchange
(the "Note Register"). The Company may have one or more co-Registrars and one or
more additional paying agents. The term "Paying Agent" includes any additional
paying agent.
(b) The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-Registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company may act as Paying Agent, Registrar, co-Registrar or transfer agent.
(c) The Company initially appoints the Trustee at its Corporate Trust
Office as Registrar, Paying Agent and agent for service of demands and notices
in connection with the Notes and this Indenture, until such time as another
Person is appointed as such.
2.4 Paying Agent to Hold Money in Trust. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that such Paying Agent
shall hold in trust for the benefit of Holders or the Trustee all money held by
such Paying Agent for the payment of principal of or interest on the Notes and
shall notify the Trustee in writing of any Default by the Company in making any
such payment. If the Company or an Affiliate of the Company acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent (other
than the Trustee) to pay all money held by it to the Trustee and to account for
any funds disbursed by such Paying Agent. Upon complying with this Section 2.4,
the Paying Agent (if other than the Company) shall have no further liability for
the money delivered to the Trustee. Upon any proceeding under any Bankruptcy Law
with respect to the Company or any Affiliate of the Company, if the Company or
such Affiliate is then acting as Paying Agent, the Trustee shall replace the
Company or such Affiliate as Paying Agent.
2.5 Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders. If the Trustee is not the Registrar, or to the extent
otherwise required under the TIA, the Company shall furnish to the Trustee, in
writing at least seven Business Days before each Interest Payment Date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Holders.
2.6 Global Note Provisions.
(a) Each Global Note initially shall: (i) be registered in the name of DTC
or the nominee of DTC; (ii) be delivered to the Note Custodian; and (iii) bear
the appropriate legend, as set forth on Exhibit A. Any Global Note may be
represented by more than one certificate. The aggregate principal amount of each
Global Note may from time to time be increased or decreased by adjustments made
on the records of the Note Custodian, as provided in this Indenture.
(b) Members of, or participants in, DTC ("Agent Members") shall have no
rights under this Indenture with respect to any Global Note held on their behalf
by DTC or by the Note Custodian under such Global Note, and DTC may be treated
by the Company, the Trustee, the Paying Agent and the Registrar and any of their
agents as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, the Paying Agent or the Registrar or any of their agents from giving
effect to any written certification, proxy or other authorization furnished by
DTC or impair, as between DTC and its Agent Members, the operation of customary
practices of DTC governing the exercise of the rights of an owner of a
beneficial interest in any Global Note. The registered Holder of a Global Note
may grant proxies and otherwise authorize any person, including Agent Members
and persons that may hold interests through Agent Members, to take any action
that a Holder is entitled to take under this Indenture or the Notes.
(c) Except as provided below, owners of beneficial interests in Global
Notes will not be entitled to receive Certificated Notes. Certificated Notes
shall be issued to all owners of beneficial interests in a Global Note in
exchange for such interests only if:
(A) DTC notifies the Company that it is unwilling or unable
to continue as depositary for such Global Note or DTC ceases to
be a clearing agency registered under the Exchange Act, at a time
when DTC is required to be so registered in order to act as
depositary, and in each case a successor depositary is not
appointed by the Company within 120 days of such notice,
(B) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Note
shall be so exchangeable, or
(C) an Event of Default has occurred and is continuing and
the Registrar has received a request from DTC.
In connection with the exchange of an entire Global Note for Certificated Notes
pursuant to this paragraph (c), such Global Note shall be deemed to be
surrendered to the Trustee for cancellation, and the Company shall execute, and
upon Company Order the Trustee shall authenticate and deliver, to each
beneficial owner identified by DTC in exchange for its beneficial interest in
such Global Note, an equal aggregate principal amount of Certificated Notes of
authorized denominations.
2.7 Transfer and Exchange.
(a) Transfers. Transfers of a Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to nominees of DTC or to a successor
of DTC or such successor's nominee.
(A) When Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer of such
Notes or to exchange such Notes for an equal principal amount of
Notes of other authorized denominations, the Registrar or
co-Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met;
provided that any Notes presented or surrendered for registration
of transfer or exchange shall be duly endorsed or accompanied by
a written instrument of transfer in form satisfactory to the
Company and the Registrar or co-Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges and subject to
the other terms and conditions of this Article II, the Company
will execute and upon Company Order the Trustee will authenticate
Notes at the Registrar's or co-Registrar's written request.
(B) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes, assessments or
similar governmental charges payable upon exchange or transfer
pursuant to Article IV or Section 9.5).
(C) The Registrar or co-Registrar shall not be required to
register the transfer of or exchange of any Note for a period
beginning: (1) 15 days before the mailing of a notice of an offer
to repurchase or redeem Notes and ending at the close of business
on the day of such mailing, or (2) 15 days before an Interest
Payment Date and ending on such Interest Payment Date.
(D) Prior to the due presentation for registration of
transfer of any Note, the Company, the Trustee, the Paying Agent,
the Registrar or any co-Registrar may deem and treat the person
in whose name a Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and
interest on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-Registrar
shall be affected by notice to the contrary.
(E) All Notes issued upon any transfer or exchange pursuant
to the terms of this Indenture shall evidence the same debt and
shall be entitled to the same benefits under this Indenture as
the Notes surrendered upon such transfer or exchange.
(b) No Obligation of the Trustee. The Trustee shall have no responsibility
or obligation to any beneficial owner of an interest in a Global Note, an Agent
Member or other Person with respect to the accuracy of the records of DTC or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Notes or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than DTC) of any notice
(including any notice of redemption) or the payment of any amount or delivery of
any Notes (or other security or property) under or with respect to such Notes.
All notices and communications to be given to the Holders and all payments to be
made to Holders in respect of the Notes shall be given or made only to or upon
the order of the registered Holders (which shall be DTC or its nominee in the
case of a Global Note). The Trustee may rely and shall be fully protected in
relying upon information furnished by DTC with respect to its Agent Members and
any beneficial owners.
(c) Retention of Documents. The Registrar and co-Registrar shall retain
copies of all letters, notices and other written communications received
pursuant to this Article II. The Company shall have the right to inspect and
make copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
2.8 Mutilated, Destroyed, Lost or Stolen Notes.
(a) If a mutilated Note is surrendered to the Registrar or co-Registrar or
if the Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken, the Company shall execute and upon Company Order the Trustee
shall authenticate a replacement Note if the requirements of Section 8-405 of
the Uniform Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee and the Company. If required by the
Trustee or the Company, such Holder shall furnish an affidavit of loss and
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-Registrar from any loss that any of them may suffer if a Note is replaced,
and, in the absence of notice to the Company or the Trustee that such Note has
been acquired by a protected purchaser, the Company shall execute and upon
Company Order the Trustee shall authenticate and make available for delivery, in
exchange for any such mutilated Note or in lieu of any such destroyed, lost or
stolen Note, a new Note of like tenor and principal amount, bearing a number not
contemporaneously Outstanding.
(b) Upon the issuance of any new Note under this Section 2.8, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
(c) Every new Note issued pursuant to this Section 2.8 in exchange for any
mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall
constitute an original additional contractual obligation of the Company and any
other obligor upon the Notes, whether or not the mutilated, destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
2.9 Temporary Notes. Until definitive Notes are ready for delivery, the
Company may execute and upon Company Order the Trustee will authenticate
temporary Notes. Temporary Notes will be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes. Without unreasonable delay, the Company will prepare and
execute and upon Company Order the Trustee will authenticate definitive Notes.
After the preparation of definitive Notes, the temporary Notes will be
exchangeable for definitive Notes upon surrender of the temporary Notes at any
office or agency maintained by the Company for that purpose and such exchange
shall be without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Company will execute and upon Company Order the
Trustee will authenticate and make available for delivery in exchange therefor
one or more definitive Notes representing an equal principal amount of Notes.
Until so exchanged, the Holder of temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as a Holder of definitive
Notes.
2.10 Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar, co-Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for registration of transfer,
exchange or payment. The Trustee and no one else shall cancel and dispose of
cancelled Notes in accordance with its policy of disposal or return to the
Company all Notes surrendered for registration of transfer, exchange, payment or
cancellation. The Company may not issue new Notes to replace Notes it has paid
or delivered to the Trustee for cancellation for any reason other than in
connection with a transfer or exchange upon Company Order.
2.11 Defaulted Interest.
(a) When any installment of interest becomes Defaulted Interest, such
installment shall forthwith cease to be payable to the Holders in whose names
the Notes were registered on the Record Date applicable to such installment of
interest. Defaulted Interest (including any interest on such Defaulted Interest)
shall be paid by the Company, at its election, as provided in Sections 2.11(b)
or (c).
(b) The Company may elect to make payment of any Defaulted Interest
(including any interest on such Defaulted Interest) to the Holders in whose
names the Notes are registered at the close of business on a special record date
for the payment of such Defaulted Interest (a "Special Record Date"), which
shall be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest and interest payable on such
Defaulted Interest, if any, proposed to be paid and the date of the proposed
payment, 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 and interest payable on such Defaulted Interest, if any,
or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Holders entitled to such Defaulted Interest and interest
payable on such Defaulted Interest, if any, as provided in this Section 2.11(b).
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest, and interest payable on such Defaulted Interest, if any,
which shall be not more than 15 calendar days and not less than ten calendar
days prior to the date of the proposed payment and not less than ten calendar
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and interest payable on such Defaulted
Interest, if any, and the Special Record Date therefor to be sent, first-class
mail, postage prepaid, to each Holder at such Holder's address as it appears in
the registration books of the Registrar, not less than ten calendar days prior
to such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and interest payable on such Defaulted Interest, if any, and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest and interest payable on such Defaulted Interest, if any, shall be paid
to the Holders in whose names the Notes are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to Section
2.11(c).
(c) Alternatively, the Company may make payment of any Defaulted Interest
(including any interest on such Defaulted Interest) in any other lawful manner
not inconsistent with the requirements of the securities exchange, if any, on
which the Notes are listed if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Section 2.11(c), such manner of payment
shall be deemed practicable by the Trustee.
ARTICLE III
COVENANTS
3.1 Payment of Notes.
(a) The Company shall pay the principal of and interest (including
Defaulted Interest) on the Notes in U.S. Legal Tender on the dates and in the
manner provided in the Notes and in this Indenture. Prior to 10:00 a.m. New York
City time on each Interest Payment Date and the Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds U.S. Legal Tender
sufficient to make Cash payments of the principal and interest due on such
Interest Payment Date or Maturity Date, as the case may be. If the Company or an
Affiliate of the Company is acting as Paying Agent, the Company or such
Affiliate shall, prior to 10:00 a.m. New York City time on each Interest Payment
Date and the Maturity Date, segregate and hold in trust U.S. Legal Tender
sufficient to make Cash payments of principal and interest due on such Interest
Payment Date or Maturity Date, as the case may be. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (other than the Company or an Affiliate of the Company) holds in
accordance with this Indenture U.S. Legal Tender designated for and sufficient
to pay all principal and interest then due and the Trustee or the Paying Agent,
as the case may be, is not prohibited from paying such money to the Holders on
that date pursuant to the terms of this Indenture.
(b) Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
3.2 Maintenance of Office or Agency.
(a) The Company shall maintain each office or agency required under Section
2.3. The Company will give prompt written notice to the Trustee of any change in
the location of any such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
(b) The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York for such purposes. 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 other office or agency.
3.3 Corporate Existence. The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect
(1) its corporate existence and the corporate, partnership or other
existence of each of its Restricted Subsidiaries, in accordance with the
respective or organizational documents (as the same may be amended from
time to time) of the Company or any such Restricted Subsidiary; and
(2) the material rights (charter and statutory), licenses and
franchises of the Company and its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, of the Company or any of its Restricted Subsidiaries,
if the Board of Directors shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole, and that the loss thereof is not
materially adverse to the Holders of the Notes or such action as is
otherwise permitted by this Indenture.
3.4 Compliance Certificate. The Company shall deliver to the Trustee within
105 days after the end of each Fiscal Year of the Company an Officers'
Certificate that complies with TIA Section 314(a)(4) stating that in the course
of the performance by the signers of their duties as Officers of the Company
they would normally have knowledge of any Default or Event of Default and
whether or not the signers know of any Default or Event of Default that occurred
during such period. If they do, the certificate shall describe the Default or
Event of Default, its status and what action the Company is taking or proposes
to take with respect thereto. The Company also shall comply with any other
applicable requirements of TIA Section 314(a)(4).
3.5 Further Instruments and Acts. The Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper or as the Trustee may reasonably request to carry out more effectively
the purpose of this Indenture.
3.6 Restricted Payments
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or any
of its Restricted Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company and other than
dividends or distributions payable to the Company or any Restricted
Subsidiary);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company or
any direct or indirect parent of the Company held by a Person other than
the Company or a Restricted Subsidiary of the Company;
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness that is
subordinated by its terms in right of payment to the Notes, except payments
of interest or principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in these clauses (1) through (4) being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(5) no Default or Event of Default has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(6) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness under the
Consolidated Coverage Ratio Test; and
(7) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments permitted
by clauses (2), (3), (4), (5), (6), (7), (8), (9), (10), (11) (other than
payments with respect to Equity Interests of the Company or any of its
Restricted Subsidiaries), (12) and (13) of Section 3.6(b)), is less than
the sum, without duplication, of:
(A) 50% of the aggregate Consolidated Net Income of the Company
(or, in the event such Consolidated Net Income shall be a deficit,
minus 100% of such deficit) accrued for the period beginning on the
Issue Date and ending on the last day of the Company's most recent
fiscal quarter for which financial information is available to the
Company ending prior to the date of such proposed Restricted Payment,
taken as one accounting period, plus
(B) 100% of the aggregate net cash proceeds received by the
Company since the Issue Date (x) from the issue or sale of Equity
Interests of the Company (other than Disqualified Stock) or
Disqualified Stock or debt or other securities of the Company that
have been converted into or exchanged for such Equity Interests (other
than (i) Equity Interests (or Disqualified Stock or convertible or
exchangeable debt or other securities) sold to a Subsidiary of the
Company or any employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries for the benefit
of its employees to the extent that the purchase by such plan or trust
is financed by Indebtedness of such plan or trust owed to the Company
or any of its Subsidiaries or Indebtedness guaranteed by the Company
or any of its Subsidiaries, and (ii) Disqualified Stock or convertible
or exchangeable debt or other securities that have been converted into
or exchanged for Disqualified Stock), and (y) as capital contributions
from its shareholders, plus
(C) to the extent that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary after the Issue Date, the fair
market value of such Subsidiary, as determined by the Board of
Directors, as of the date of such redesignation, plus
(D) the sum of (i) the aggregate amount in cash returned to the
Company or any of its Restricted Subsidiaries and (ii) the aggregate
principal amount of Indebtedness of the Company or any of its
Restricted Subsidiaries cancelled, in each case with respect to
Restricted Investments made after the Issue Date whether through
interest payments, principal payments, dividends, or other
distributions or the forgiveness or cancellation of Indebtedness, plus
(E) the net cash proceeds received by the Company or any of its
Restricted Subsidiaries from the disposition or sale (other than to a
Restricted Subsidiary), or liquidation, retirement or redemption of
all or any portion of Restricted Investments made after the Issue
Date, plus
(F) the net reduction in Investments in Unrestricted Subsidiaries
resulting from payments of dividends, repayments of the principal of
loans or advances or other transfers of assets from Unrestricted
Subsidiaries to the Company or any of its Restricted Subsidiaries,
plus
(G) in the event that the Company or any of its Restricted
Subsidiaries makes any Investment in a Person that, as a result of or
in connection with such Restricted Investment, becomes a Restricted
Subsidiary, an amount equal to such portion of the Company's or any of
its Restricted Subsidiaries' existing Investments in such Person that
was previously treated as a Restricted Payment.
(b) The provisions of Section 3.6(a) will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of this Indenture;
provided, however, that any such dividend will be included in the
calculation of the amount of Restricted Payments (without duplication for
declaration);
(2) the making of any Restricted Investment or the payment on or with
respect to or, the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any of its
Restricted Subsidiaries or of any Equity Interests of the Company in
exchange for, or out of the net cash proceeds of the substantially
concurrent sale of, Equity Interests of the Company (other than (i)
Disqualified Stock and (ii) Equity Interests issued or sold to a Restricted
Subsidiary of the Company or to any employee stock ownership plan or other
trust established by the Company or any of its Subsidiaries for the benefit
of its employees to the extent that the purchase by such plan or trust is
financed by Indebtedness of such plan or trust owed to the Company or any
of its Subsidiaries or Indebtedness guaranteed by the Company or any of its
Subsidiaries) or out of the net cash proceeds of substantially concurrent
capital contributions made to the Company; provided that the amount of any
such net cash proceeds that are utilized for any such Restricted
Investment, redemption, repurchase, retirement, defeasance or other
acquisition will be excluded from clause (7)(B) of Section 3.6(a);
(3) the defeasance (whether legally or as to covenants only),
redemption, repurchase or other acquisition of subordinated Indebtedness of
the Company or any of its Restricted Subsidiaries or Disqualified Stock of
the Company with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(4) the declaration and payment of any dividend by a Restricted
Subsidiary of the Company to the holders of such Restricted Subsidiary's
Equity Interests on a pro rata basis;
(5) the retirement of any shares of Disqualified Stock of the Company
by conversion into, or by exchange for, shares of Disqualified Stock of the
Company, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of other shares
of Disqualified Stock of the Company; provided that the Disqualified Stock
of the Company that replaces the retired shares of Disqualified Stock of
the Company shall not require the direct or indirect payment of any
liquidation preference earlier in time than the final Stated Maturity of
the retired shares of Disqualified Stock of the Company;
(6) payments required to be made or otherwise contemplated pursuant to
the Plan of Reorganization;
(7) payments required to be made pursuant to the CPIH Reimbursement
Agreement, the Corporate Services Reimbursement Agreement or Tax Sharing
Agreement;
(8) payments in respect of the limited partnership interests in
Covanta Onondaga Limited Partnership and Covanta Huntington Limited
Partnership pursuant to the limited partnership agreements of such entities
as in effect on the Issue Date and as amended, modified or extended on
terms not materially less favorable to the Company and its Restricted
Subsidiaries, taken as a whole;
(9) repurchases of Equity Interests deemed to occur upon the exercise
of stock options if such Equity Interests represent a portion of the
exercise price thereof;
(10) payments in satisfaction of earn-out and deferred purchase price
obligations pursuant to agreements relating to the acquisition of any
Person which, following such acquisition, would be a Restricted Subsidiary
of the Company;
(11) any Restricted Payments made pursuant to any employee benefit
plan, arrangement or perquisite (including plans, arrangements or
perquisites for the benefit of directors) or employment agreements or other
compensation arrangements, in each case as approved by the Board of
Directors in its good faith judgment;
(12) the distribution, as a dividend or otherwise, of Equity Interests
of, or Indebtedness owed to the Company or a Restricted Subsidiary of the
Company by, any Unrestricted Subsidiary of the Company;
(13) payments or distributions to dissenting stockholders pursuant to
applicable law or pursuant to or in connection with a consolidation, merger
or transfer of assets that complies with Section 5.1;
(14) any purchase, redemption, retirement or other acquisition for
value of any subordinated Indebtedness pursuant to the provisions of such
Indebtedness relating to a change of control or sale of assets; provided
that the Company shall have complied with any requirement to make a Change
of Control Offer or Asset Sale Offer, as the case may be, in connection
with such change of control or sale of assets; and
(15) other Restricted Payments in an aggregate amount not to exceed
$10.0 million.
(c) The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the assets or
securities proposed to be transferred or issued by the Company or any Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued by this
covenant will be determined, in good faith, by the Board of Directors. The Board
of Directors' determination must be based upon an opinion or appraisal issued by
an accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $15.0 million and if the Restricted Payment is to be
made to an Affiliate of the Company or to the holders of or in respect of any
Equity Interest. Not later than the date of making any Restricted Payment having
a fair market value exceeding $15.0 million, the Company will deliver to the
Trustee an Officer's Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 3.6 (c) were computed, together with a copy of the fairness opinion
or appraisal required by this Indenture. In determining whether any Restricted
Payment is permitted by the covenant described above, the Company may in its
sole discretion allocate all or any portion of such Restricted Payment among the
categories described in the immediately preceding paragraph or among such
categories and the types of Restricted Payments described in the first paragraph
under the "Restricted Payments" heading above; provided that at the time of such
allocation, all such Restricted Payments, or allocated portions thereof, would
be permitted under the various provisions of the covenant described above.
3.7 Asset Sales.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value is determined by the Board of Directors and
evidenced by a resolution of the Board of Directors and, if such fair
market value is in excess of $15.0 million, is set forth in an Officer's
Certificate delivered to the Trustee; and
(3) at least 75% of the consideration received in the Asset Sale by
the Company or such Restricted Subsidiary is in the form of Cash or Cash
Equivalents. For purposes of this clause (3), each of the following will be
deemed to be Cash:
(A) any liabilities, as shown on the Company's most recent
consolidated balance sheet, of the Company or any of its Restricted
Subsidiaries (other than contingent liabilities and liabilities that
are by their terms subordinated in right of payment to the Notes) that
are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such
Restricted Subsidiary from further liability;
(B) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee
converted by the Company or such Restricted Subsidiary within 90 days
into cash or Cash Equivalents, to the extent of the cash and Cash
Equivalents received in that conversion; and
(C) any Voting Stock or assets of the kind referred to in clause
(2) or (4) of Section 3.7 (b).
(b) Within 425 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary may, at its option and to the
extent it elects, apply (i) 33% of all such Net Proceeds received after the
Issue Date and until the aggregate Net Proceeds received by the Company and all
of its Restricted Subsidiaries equal $7.5 million, and (ii) thereafter, 100% of
such Net Proceeds:
(1) to repay or cash collateralize Bank Indebtedness and, to the
extent the Bank Indebtedness repaid is revolving credit Indebtedness, to
correspondingly reduce commitments with respect thereto;
(2) to redeem the High Yield Notes in whole or in part;
(3) to repay any other Senior Indebtedness in whole or in part;
(4) to acquire all or substantially all of the assets of, or a
majority of the Voting Stock of, a Permitted Business, or to make a
Permitted Investment in another Person that is engaged in a Permitted
Business;
(5) to make capital expenditures that are used or useful in a
Permitted Business;
(6) to acquire other assets that are used or useful in a Permitted
Business; or
(7) any combination of the foregoing;
provided that the Company and any such Restricted Subsidiary will be deemed to
have applied such Net Proceeds in accordance with clause (2) or clause (4) of
this Section 3.7(b) if, within 365 days after the date of such Asset Sale, the
Company or such Restricted Subsidiary shall have entered into, and not abandoned
or rejected, a binding agreement with respect to an acquisition, expenditure or
Investment that would result in such application of such Net Proceeds and that
acquisition, expenditure or Investment is thereafter completed within 455 days
after the date of such Asset Sale.
(c) Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
(d) Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 3.7(b), other than Net Proceeds not required to be applied
or invested in the manner specified in Section 3.7(b), will constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $15.0 million,
the Company will, to the extent permitted under the High Yield Note Indenture
and the Intercreditor Agreement, make an Asset Sale Offer to all Holders of
Notes and to all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth in this Indenture with respect
to offers to purchase or redeem with the proceeds of sales of assets to purchase
or redeem the maximum principal amount of the Notes and such other pari passu
Indebtedness that may be purchased or redeemed out of the Excess Proceeds. The
offer price for the Notes in any Asset Sale Offer will be equal to 100% of the
principal plus accrued and unpaid interest on the Notes to be purchased, to the
date fixed for the closing of such Asset Sale Offer in accordance with the
procedures set forth in this Indenture, and will be payable in cash. If the date
of purchase is on or after an interest record date and on or before the related
Interest Payment Date, accrued and unpaid interest, if any, will be paid to the
Holder in whose name a Note is registered at the close of business on such
record date, and no additional interest will be payable to Holders who tender
pursuant to the Asset Sale Offer. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company and its Restricted Subsidiaries
may use those Excess Proceeds for any purpose not otherwise prohibited by the
High Yield Note Indenture. If the aggregate principal of Notes and the amount of
other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the
amount of Excess Proceeds, the Trustee will select the Notes and such other pari
passu Indebtedness to be purchased or redeemed on a pro rata basis. Upon
completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset
at zero.
(e) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 4.8 or
this Section 3.7, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
Section 4.8 or this Section 3.7 by virtue of such conflict.
(f) Notwithstanding the foregoing, to the extent the Intercreditor
Agreement is in effect, any Asset Sale shall be governed by the terms of the
Intercreditor Agreement to the extent that the applicable terms of this
Indenture are inconsistent therewith. Furthermore, the Company shall not be
required to make any Asset Sale Offer to the extent such offer would be
prohibited by the terms of any Senior Indebtedness.
3.8 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any of its Affiliates (each, an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no less favorable
to the Company or such Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $5.0 million, a resolution of the Board of Directors set
forth in an Officer's Certificate certifying that such Affiliate
Transaction complies with this Section 3.8 and that such Affiliate
Transaction has been approved by a majority of the members of the
Board of Directors having no personal stake in such Affiliate
Transaction; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in
excess of $30.0 million, an opinion as to the fairness to the Company
and its Restricted Subsidiaries of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing.
(b) The following transactions will not be deemed to be Affiliate
Transactions and therefore will not be subject to the provisions of Section
3.8(a):
(1) any Restricted Payment permitted to be made pursuant to Section
3.6 and any Permitted Investment;
(2) payments made pursuant to the CPIH Reimbursement Agreement, the
Corporate Services Reimbursement Agreement and the Tax Sharing Agreement;
(3) any employment, service or termination agreement entered into in
the ordinary course of business;
(4) any issuance of Equity Interests (other than Disqualified Stock),
or other payments, awards or grants in cash, Equity Interests (other than
Disqualified Stock) or otherwise pursuant to, or the funding of, employment
arrangements, employee stock options and employee stock ownership plans
approved by the Board of Directors;
(5) loans or advances to employees of the Company or its Subsidiaries
in the ordinary course of business permitted by clause (7) of the
definition of Permitted Investments;
(6) the payment or provision of reasonable fees, compensation or
employee benefit plans, arrangements or perquisites to, and any indemnity
provided for the benefit of, directors, officers, consultants or employees
of the Company or any Subsidiary in the ordinary course of business;
(7) any transaction between or among the Company and its Restricted
Subsidiaries or between Restricted Subsidiaries of the Company;
(8) transactions with customers, suppliers, contractors, joint venture
partners or purchasers or sellers of goods or services, in each case which
are in the ordinary course of business (including, without limitation,
pursuant to joint venture agreements) and otherwise in compliance with the
terms of this Indenture, and which are fair to the Company and its
Restricted Subsidiaries, as applicable, in the reasonable determination of
the Board of Directors;
(9) transactions with the Investor Parties pursuant to the
Indemnification Agreement, the Second Lien Letter of Credit Facility and
any other agreement in existence on the Issue Date, between the Company,
DHC or any Investor Party, as such agreement may thereafter be amended,
modified, restated, renewed, extended, refinanced, refunded or replaced, as
applicable, on terms not materially less favorable to the Company and its
Restricted Subsidiaries, taken as a whole, than those terms in effect on
the Issue Date, and any such amendment, modification, restatement, renewal,
extension, refinancing, refunding or replacement;
(10) transactions with CPIH and its Subsidiaries pursuant to
agreements in existence or entered into on the Issue Date, as such
agreements may thereafter be amended, modified, restated, renewed,
extended, refinanced, refunded or replaced, as applicable, on terms not
materially less favorable to the Company and its Restricted Subsidiaries,
taken as a whole, than the terms of such agreements as in effect on the
Issue Date, and any such amendment, modification, restatement, renewal,
extension, refinancing, refunding or replacement;
(11) transactions pursuant to any other arrangement, contract or
agreement in existence on the Issue Date, as such arrangement, contract or
agreement may thereafter be amended, modified, restated, renewed, extended,
refinanced, refunded or replaced from time to time; provided that any such
amendment, modification, restatement, renewal, extension, refinancing,
refunding or replacement is on terms not materially less favorable to the
Company and its Restricted Subsidiaries, taken as a whole, than the
arrangement, contract or agreement in existence on the Issue Date; and
(12) sales of Equity Interests, other than Disqualified Stock, of the
Company to Affiliates of the Company.
3.9 Offer to Repurchase Upon Change of Control.
(a) Subject to the Company's right to redeem the Notes pursuant to Section
4.1, upon the occurrence of a Change of Control, the Company will make an offer
(a "Change of Control Offer") to each Holder to repurchase all or any part (in a
minimum aggregate principal amount at Stated Maturity of $500 or an integral
multiple of $500) of such Holder's Notes at a purchase price in cash equal to
101% of the principal of the Notes repurchased plus accrued and unpaid interest
on the Notes repurchased to the date of repurchase (the "Change of Control
Payment"). Within 10 days following any Change of Control, unless the Company
has sent a redemption notice pursuant to Section 4.3 for all of the Notes, the
Company will mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 3.9 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which date shall be no
earlier than 30 days and no later than 60 days after the date on which such
notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Notes purchased pursuant to a
Change of Control Offer will be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder; the principal amount of Notes delivered for purchase, and a
statement that such Xxxxxx is withdrawing his election to have the Notes
purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $500 in
principal amount or an integral multiple thereof.
(b) The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.8 or this Section 3.9, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 4.8, or this Section 3.9 by virtue of
such conflict.
(c) On the Change of Control Payment Date, the Company shall, to the extent
lawful:
(1) accept for payment all Notes or portions thereof properly tendered
pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all Notes or portions of Notes properly
tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes properly
accepted together with an Officer's Certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by the
Company.
Any Note so accepted for payment shall cease to accrue interest on and
after the Change of Control Payment Date.
(d) The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each new Note will be in a minimum
aggregate principal amount of $500 or an integral multiple thereof. If the
Change of Control Payment Date is on or after an interest record date and on or
before the related Interest Payment Date, accrued and unpaid interest, if any,
will be paid to the Holder in whose name a note is registered at the close of
business on such record date, and no additional interest will be payable to the
holders who tender pursuant to the Change of Control Offer. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
(e) Notwithstanding anything to the contrary in this Section 3.9, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section 3.9 and purchases all Notes validly tendered and not withdrawn under the
Change of Control Offer.
3.10 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary, if that designation would not cause a Default. If a
Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate
fair market value of all outstanding Investments owned by the Company and its
Restricted Subsidiaries in the Subsidiary properly so designated will be deemed
to be an Investment made as of the time of the designation and will reduce the
amount available for Restricted Payments under the first paragraph of Section
3.6 or Permitted Investments, as determined by the Company. Such a designation
will only be permitted if the Investment would be permitted at that time and if
the Restricted Subsidiary otherwise meets the criteria for being an Unrestricted
Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary
to be a Restricted Subsidiary if the redesignation would not cause a Default.
ARTICLE IV
OPTIONAL REDEMPTION OF NOTES
4.1 Optional Redemption. The Company may redeem the Notes, as a whole or
from time to time in part, subject to the conditions and at 100% of the
outstanding principal amount thereof.
4.2 Election to Redeem. The Company shall evidence its election to redeem
any Notes pursuant to Section 4.1 by a Board Resolution.
4.3 Notice of Redemption.
(a) The Company shall give or cause the Trustee to give notice of
redemption, in the manner provided for in Section 11.2, not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Notes to be
redeemed. If the Company itself gives the notice, it shall also deliver a copy
to the Trustee.
(b) If either (i) the Company is not redeeming all Outstanding Notes, or
(ii) the Company elects to have the Trustee give notice of redemption, then the
Company shall deliver to the Trustee, at least 45 days prior to the Redemption
Date (unless the Trustee is satisfied with a shorter period), an Officers'
Certificate requesting that the Trustee select the Notes to be redeemed and/or
give notice of redemption and setting forth the information required by
paragraph (c) of this Section 4.3 (with the exception of the identification of
the particular Notes, or portions of the particular Notes, to be redeemed in the
case of a partial redemption). If the Company elects to have the Trustee give
notice of redemption, the Trustee shall give the notice in the name of the
Company and at the Company's expense.
(c) All notices of redemption shall state:
(A) the Redemption Date,
(B) the redemption price and the amount of any accrued interest
payable as provided in Section 4.6,
(C) whether or not the Company is redeeming all Outstanding
Notes,
(D) if the Company is not redeeming all Outstanding Notes, the
aggregate principal amount of Notes that the Company is redeeming and
the aggregate principal amount of Notes that will be Outstanding after
the partial redemption, as well as the identification of the
particular Notes, or portions of the particular Notes, that the
Company is redeeming,
(E) if the Company is redeeming only part of a Note, the notice
that relates to that Note shall state that on and after the Redemption
Date, upon surrender of that Note, the Holder will receive, without
charge, a new Note or Notes of authorized denominations for the
principal amount of the Note remaining unredeemed,
(F) that on the Redemption Date the redemption price and any
accrued interest payable to the Redemption Date as provided in Section
4.6 will become due and payable in respect of each Note, or the
portion of each Note, to be redeemed, and, unless the Company defaults
in making the redemption payment, that interest on each Note, or the
portion of each Note, to be redeemed, will cease to accrue on and
after the Redemption Date,
(G) the place or places where a Holder must surrender the
Holder's Notes for payment of the redemption price, and
(H) the CUSIP or ISIN number, if any, listed in the notice or
printed on the Notes, and that no representation is made as to the
accuracy or correctness of such CUSIP or ISIN number.
4.4 Selection of Notes to Be Redeemed in Part.
(a)If there is more than one Holder of the Notes and if the Company is not
redeeming all Outstanding Notes, the Trustee shall select the Notes to be
redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not then listed on a national securities exchange, by lot. The Trustee shall
make the selection from the Outstanding Notes not previously called for
redemption. The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount of the Notes to be redeemed. In the event of a
partial redemption by lot, the Trustee shall select the particular Notes to be
redeemed not less than 30 nor more than 60 days prior to the relevant Redemption
Date from the Outstanding Notes not previously called for redemption. The
Company may redeem Notes in denominations of $500 only in whole. The Trustee may
select for redemption portions (equal to $500 or any integral multiple of $500)
of the principal of Notes that have denominations larger than $500.
(b) For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of that Note which has been or is to be redeemed.
4.5 Deposit of Redemption Price. Prior to 10:00 a.m. New York City time on
the relevant Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as Paying Agent, segregate and hold
in trust as provided in Section 2.4) an amount of money in immediately available
funds sufficient to pay the redemption price of, and accrued interest on, all
the Notes that the Company is redeeming on that date.
4.6 Notes Payable on Redemption Date. If the Company, or the Trustee on
behalf of the Company, gives notice of redemption in accordance with this
Article IV, the Notes, or the portions of Notes, called for redemption, shall,
on the Redemption Date, become due and payable at the redemption price specified
in the notice (together with accrued interest, if any, to the Redemption Date),
and from and after the Redemption Date (unless the Company shall default in the
payment of the redemption price and accrued interest) the Notes or the portions
of Notes called for redemption shall cease to bear interest. Upon surrender of
any Note for redemption in accordance with the notice, the Company shall pay the
Notes at the redemption price, together with accrued interest, if any, to the
Redemption Date (subject to the rights of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date). If
the Company shall fail to pay any Note called for redemption upon its surrender
for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Notes.
4.7 Unredeemed Portions of Partially Redeemed Note. Upon surrender of a
Note that is to be redeemed in part, the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of the Note at
the expense of the Company, a new Note or Notes, of any authorized denomination
as requested by the Holder, in an aggregate principal amount equal to, and in
exchange for, the unredeemed portion of the principal of the Note surrendered,
provided that each new Note will be in a principal amount of $500 or integral
multiple of $500.
4.8 Offer to Purchase by Application of Excess Proceeds.
(a) In the event that, pursuant to Section 3.7, the Company is required to
commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"), it
will follow the procedures specified below.
(b) Subject to the Intercreditor Agreement and the High Yield Notes
Indenture, the Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase or
redemption of Notes and such other pari passu Indebtedness containing provisions
similar to this Section 4.8 (on a pro rata basis, if applicable) or, if less
than the Offer Amount has been tendered, all Notes and other Indebtedness
tendered in response to the Asset Sale Offer. Payment for any Notes so purchased
will be made in the same manner as interest payments are made.
(c) If the Purchase Date is on or after an interest record date and on or
before the related Interest Payment Date, any accrued and unpaid interest will
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest will be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
(d) Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section
4.8 and Section 3.7 and the length of time the Asset Sale Offer will remain
open;
(2) the Offer Amount, the offer price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue
to accrue interest;
(4) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;
(5) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral multiples of
$500 of principal at Stated Maturity only;
(6) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice at least
three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Xxxxxx is withdrawing his election to have such Note
purchased;
(8) that, if the aggregate purchase or redemption price of Notes and
other pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other pari passu Indebtedness
to be purchased or redeemed on a pro rata basis based on the principal
amount of the Notes and principal of such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by the
Company so that only Notes in denominations of $500 of principal at Stated
Maturity, or integral multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount at Stated Maturity to that of
the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
(e) On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 4.8. The Company, the depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note, and the
Trustee, upon written request from the Company will authenticate and mail or
deliver such new Note to such Holder, in a principal amount at Stated Maturity
equal to that of any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Asset Sale Offer
on the Purchase Date.
(f) Other than as specifically provided in this Section 4.8, any purchase
pursuant to this Section 4.8 shall be made in accordance with the provisions of
Sections 4.3 through 4.7.
(g) The Company shall not be required to make any Asset Sale Offer to the
extent such offer would be prohibited by the terms of any Senior Indebtedness or
the Intercreditor Agreement.
ARTICLE V
SUCCESSOR
5.1 Merger, Consolidation, or Sale of Assets.
(a) The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition has been made is a Person organized or existing under
the laws of the United States, any state of the United States or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of the Company under the Notes and this Indenture, pursuant to
a supplemental indenture or other agreements reasonably satisfactory to the
Trustee;
(3) immediately after giving effect to such transaction no Default or
Event of Default exists;
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, conveyance or other disposition has been made shall,
on the date of such transaction after giving pro forma effect thereto and
any related financing transactions as if the same had occurred at the
beginning of the applicable four-quarter period, (i) be permitted to incur
at least $1.00 of additional Indebtedness under the Consolidated Coverage
Ratio Test or (ii) (A) would have a Consolidated Coverage Ratio greater
than the Consolidated Coverage Ratio of the Company immediately prior to
such transaction and without taking into account such transaction and any
related financing transactions and (B) has received and delivered to the
Trustee letters from Xxxxx'x and S&P stating that the High Yield Notes (if
any are outstanding at that time), after giving effect to such transaction
and any related financing transactions, will be rated at least "Ba1" and
"BB" by such agencies, respectively; and
(5) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture, if any,
comply with this Indenture.
(b) In addition, the Company shall not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.1 will not prohibit (i) any
sale, assignment, transfer, conveyance or other disposition of assets between or
among the Company and any Restricted Subsidiary, (ii) any Restricted Subsidiary
from consolidating with, merging into or transferring all or part of its assets
to the Company, or (iii) the Company from merging with an Affiliate incorporated
solely for the purpose of reincorporating the Company in another jurisdiction to
realize tax or other benefits.
(c) In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which the Company is not the surviving Person and the surviving Person is to
assume all the obligations of the Company under the Notes and this Indenture
pursuant to a supplemental indenture, such surviving Person shall succeed to,
and be substituted for, and may exercise every right and power of, the Company,
and the Company would be discharged from its obligations under this Indenture
and the Notes.
5.2 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of, and interest and premium, if any, on, the Notes except in the case
of a sale of all of the Company's assets in a transaction that is subject to,
and that complies with the provisions of, Section 5.1.
ARTICLE VI
DEFAULTS AND REMEDIES
6.1 Events of Default.
(a) Each of the following is an "Event of Default":
(A) default in the payment when due of the principal of any
Notes, including the failure to make a required payment to
purchase Notes tendered pursuant to an optional redemption,
except if the Company is prohibited from making such payment
pursuant to Section 10.3 and for five Business Days after the
relevant prohibition is terminated;
(B) default for 30 days or more in the payment when due of
interest on any Notes, except if the Company is prohibited from
making such payment pursuant to Section 10.3 and for five
Business Days after the relevant prohibition is terminated;
(C) the failure to perform or comply with any other covenant
or agreement contained in the Indenture or in the Notes for 60
days or more after written notice to the Company from the Trustee
or the Holders of at least 25% in aggregate principal amount of
the Outstanding Notes;
(D) a Bankruptcy Event of Default; and
(E) default by the Company under any Indebtedness which
results in the acceleration of such Indebtedness prior to its
Stated Maturity and the principal or accreted amount of
Indebtedness at the relevant time aggregates $20 million or more.
The foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
(b) The Company shall deliver to the Trustee upon becoming aware of any
Default or Event of Default written notice in the form of an Officers'
Certificate of any Default or Event of Default, their status and what action the
Company proposes to take in respect thereof.
6.2 Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
Section 6.1(a)(D) above) shall occur and be continuing, the Trustee or the
Holders of at least 25% in principal amount of Outstanding Notes may declare the
unpaid principal of and accrued and unpaid interest on all the Notes to be
immediately due and payable by notice in writing to the Company and the Trustee
specifying the Event of Default and that it is a "notice of acceleration." If an
Event of Default specified in Section 6.1(a)(D) above occurs with respect to the
Company, then the unpaid principal of and accrued and unpaid interest on all the
Notes will become immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder.
(b) At any time after a declaration of acceleration with respect to the
Notes as described in Section 6.2(a), the Holders of a majority in aggregate
principal amount of the Outstanding Notes may rescind and cancel such
declaration and its consequences:
(A) if the rescission would not conflict with any judgment or
decree;
(B) if all existing Events of Default have been cured or waived,
except nonpayment of principal or interest that has become due solely
because of the acceleration; and
(C) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its reasonable expenses,
disbursements and advances.
No rescission shall affect any subsequent Default or impair any rights relating
thereto.
6.3 Other Remedies.
(a) If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal of and interest on the
Notes or to enforce the performance of any provision of the Notes or this
Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
6.4 Waiver of Past Defaults. The Holders of not less than a majority in
principal of the aggregate principal amount of the Outstanding Notes may waive
any existing Default or Event of Default under the Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Notes.
6.5 Control by Majority. The Holders of a majority in aggregate principal
amount of the Outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. Subject to Sections 7.1
and 7.2, however, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture unless the Holders have offered to the Trustee
reasonable indemnity; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction.
6.6 Limitation on Suits. No Holder of any Notes will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless:
(a) such Holder gives to the Trustee written notice of a continuing Event
of Default;
(b) Holders of at least 25% in aggregate principal amount of the then
Outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holders of the Notes provide to the Trustee satisfactory
indemnity;
(d) the Trustee does not comply with the request delivered in clause (b)
within 60 days; and
(e) during such 60 day period the Holders of a majority in aggregate
principal amount of the Outstanding Notes do not give the Trustee a written
direction which, in the opinion of the Trustee, is inconsistent with the
request.
6.7 Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture (including, without limitation, Section 6.6), the
right of any Holder to receive payment of principal of or interest on the Notes
held by such Holder, on or after the respective due dates, Redemption Dates or
repurchase date expressed in this Indenture or the Notes, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
6.8 Collection Suit by Trustee. If an Event of Default specified in
Sections 6.1(a)(A) and 6.1(a)(B) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with applicable
interest on any overdue principal and, to the extent lawful, interest on overdue
interest) and the amounts provided for in Section 7.7.
6.9 Trustee May File Proofs of Claim, etc.
(a) The Trustee may (irrespective of whether the principal of the Notes is
then due):
(A) file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee and the Holders under this Indenture and the Notes allowed in
any bankruptcy, insolvency, liquidation or other judicial proceedings
relative to the Company or its respective creditors or properties; and
(B) collect and receive any moneys or other property payable or
deliverable in respect of any such claims and distribute them in
accordance with this Indenture.
Any receiver, trustee, liquidator, sequestrator (or other similar official) in
any such 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 to the Trustee any amount due to
it for the reasonable compensation, expenses, taxes, disbursements and advances
of the Trustee, its agent and counsel, and any other amounts due to the Trustee
pursuant to Section 7.7.
(b) Nothing in this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
6.10 Priorities. If the Trustee collects any money or property pursuant to
this Article VI, it shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may, upon notice to the Company, fix a record date and payment date
for any payment to Holders pursuant to this Section 6.10.
6.11 Undertaking for Costs. In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of
more than 10% in principal amount of Outstanding Notes.
ARTICLE VII
TRUSTEE
7.1 Duties of Trustee.
(a) If a Default or an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of a Default or an Event of Default
actually known to the Trustee:
(A) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(B) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine such 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:
(A) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.1;
(B) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(C) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Sections 6.2, 6.4 or 6.5.
(d) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(e) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(f) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any 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 to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(g) Every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of this Article VII and to the provisions
of the TIA.
(h) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
(i) 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 unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to the Trustee against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
7.2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely on any document reasonably believed by it to be
genuine and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting at the direction of the
Company, it may require an Officers' Certificate or an Opinion of Counsel or
both. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on an Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) If the Trustee shall determine, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney.
(g) The Trustee shall not be deemed to have notice of any Default or Event
of Default unless a Trust Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Notes and this Indenture.
(h) The rights, privileges, protections, immunities and benefits given to
the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
(i) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
7.3 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Company or any of its Affiliates with the same rights it would have if
it were not Trustee. Any Paying Agent, Registrar or co-Registrar may do the same
with like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
7.4 Trustee's Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Company's use of the proceeds from
the Notes or any money paid to the Company or upon the Company's direction under
any provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or in any other document in connection with the sale of
the Notes or pursuant to this Indenture other than the Trustee's certificate of
authentication.
7.5 Notice of Defaults. If a Default or Event of Default occurs and is
continuing and if the Trustee has actual knowledge thereof, the Trustee shall
mail to each Holder as their names and addresses appear on the Holder list
described in Section 2.5, notice of the Default or Event of Default within 90
days after the occurrence thereof. Except in the case of a Default or Event of
Default in payment of principal of or interest on any Note, the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of the Holders.
7.6 Reports by Trustee to Holders. The Trustee shall comply with TIA ss.
313. The Company agrees to notify promptly the Trustee whenever the Notes become
listed on any stock exchange and of any delisting thereof.
7.7 Compensation and Indemnity.
(a) The Company shall pay to the Trustee, from time to time, reasonable
compensation for its acceptance of this Indenture and services hereunder as the
Company and the Trustee shall from time to time agree in writing. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, costs of preparing and reviewing reports, certificates and other
documents, costs of preparation and mailing of notices to Holders and reasonable
costs of counsel retained by the Trustee in connection with the delivery of an
Opinion of Counsel or otherwise, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts.
(b) The Company shall indemnify the Trustee, and hold it harmless, against
any and all loss, liability or expense (including reasonable attorneys' fees and
expenses) incurred by it without negligence, willful misconduct or bad faith on
its part in connection with the acceptance and administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Holder, the Company or otherwise).
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and the
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by the Trustee through the Trustee's own negligence, willful
misconduct or bad faith.
(c) To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Notes. Such lien shall survive the
satisfaction and discharge of this Indenture. The Trustee's right to receive
payment of any amounts due under this Section 7.7 shall not be subordinate to
any other liability or indebtedness of the Company.
(d) The Company's payment obligations pursuant to this Section 7.7 shall
survive the discharge of this Indenture and the resignation or removal of the
Trustee. When the Trustee incurs expenses (including the fees and expenses of
its agents and counsel) after the occurrence of a Bankruptcy Event of Default,
the expenses are intended to constitute expenses of administration under any
Bankruptcy Law and shall be preferred over Holders in a proceeding under any
Bankruptcy Law; provided, however, that this shall not affect the Trustee's
rights as set forth in this Section 7.7 or Section 6.10.
7.8 Replacement of Trustee.
(a) The Trustee may resign at any time by so notifying the Company. The
Holders of a majority in principal amount of the Outstanding Notes may remove
the Trustee by so notifying the Trustee and may appoint a successor Trustee
reasonably acceptable to the Company. The Company shall remove the Trustee if:
(A) the Trustee fails to comply with Section 7.10;
(B) the Trustee is adjudged bankrupt or insolvent;
(C) a receiver or other public officer takes charge of the
Trustee or its property; or
(D) the Trustee otherwise becomes incapable of acting.
(b) If the Trustee resigns or is removed by the Company or by the Holders
of a majority in principal amount of the Outstanding Notes and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of the Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
(c) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided that all sums owing to
the Trustee hereunder have been paid and subject to the lien provided for in
Section 7.7.
(d) If a successor Xxxxxxx does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Outstanding Notes may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
(e) If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(f) Notwithstanding the replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
7.9 Successor Trustee by Xxxxxx.
(a) If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.
(b) In case at the time such successor or successors to the Trustee shall
succeed to the trusts created by this Indenture, any of the Notes 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 Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of the Trustee shall have.
7.10 Eligibility; Disqualification. The Trustee shall at all times satisfy
the requirements of TIA Section 310(a). The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
7.11 Preferential Collection of Claims Against Company. The Trustee shall
comply with TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 311(b). A Trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE
8.1 Satisfaction and Discharge. The Indenture will be discharged and will
cease to be of further effect (except as to surviving rights or registration of
transfer or exchange of the Notes, as expressly provided for in the Indenture)
as to all Outstanding Notes when:
(a) either:
(A) all the Notes theretofore executed, authenticated and
delivered (except lost, stolen or destroyed Notes which have been
replaced or paid and Notes for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee
for cancellation, or
(B) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, and the Company has
irrevocably deposited or caused to be deposited with the Trustee
to be held in trust U.S. Legal Tender or U.S. Government
Obligations sufficient, without consideration of any reinvestment
of interest, to pay and discharge the entire indebtedness on the
Notes not theretofore delivered to the Trustee for cancellation,
for principal of and interest on the Notes to the date of
deposit, together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment;
(b) the Company has paid all other sums payable under this Indenture and
the Notes by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
stating that all conditions under this Indenture relating to the satisfaction
and discharge of this Indenture have been complied with.
8.2 Survival of Obligations.Notwithstanding Section 8.1, the Company's
obligations in Sections 6.7 and 7.8 and this Article VIII shall survive until
the Notes are paid in full.
ARTICLE IX
AMENDMENTS
9.1 Without Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the Notes
without notice to or consent of any Holder:
(A) to cure any ambiguity, defect or inconsistency;
(B) to provide for uncertificated Notes in addition to or in
place of certificated Notes; provided, however, that the
uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code;
(C) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(D) to comply with any requirements of the Commission in
connection with qualifying this Indenture under the TIA;
(E) to add a guarantor for the Notes; or
(F) to make any change that does not adversely affect the rights
of any Holder in any material respect.
(b) After an amendment under this Section 9.1 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 9.1.
9.2 With Consent of Holders.
(a) The Company and the Trustee may amend this Indenture or the Notes
without notice to any Holder but with the written consent of the Holders of at
least a majority in principal amount of the Outstanding Notes (including,
without limitation, consents obtained in connection with a purchase of, or
tender offer or exchange offer for, Notes). However, without the consent of each
Holder affected, an amendment may not:
(A) reduce the amount of Notes whose Holders must consent to
an amendment or waiver (including, without limitation, an
amendment or waiver of this Section 9.2(a));
(B) reduce the rate of or change or have the effect of
changing the time for payment of interest, including Defaulted
Interest, on any Notes;
(C) reduce the principal of or change or have the effect of
changing the fixed maturity of any Notes, or change the date on
which any Notes may be subject to redemption, or reduce the
redemption price therefor;
(D) make any Notes payable in money other than that stated
in the Notes; or
(E) make any change in the provisions of this Indenture
entitling each Holder to receive payment of principal of and
interest on such Notes on or after the due date thereof or to
bring suit to enforce such payment, or permitting Holders of a
majority in principal amount of Outstanding Notes to waive
Defaults or Events of Default.
(b) It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
(c) After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to Holders a notice briefly describing such
amendment, supplement or waiver. The failure to give such notice to all Holders,
or any defect therein, shall not impair or affect the validity of an amendment,
supplement or waiver under this Section 9.2.
(d) An amendment, supplement or waiver under Section 8.1 and this Section
9.2 may not make any change that adversely affects the rights under Article X of
any holder of Senior Indebtedness then outstanding unless the holders of all
such Senior Indebtedness (or any Representative thereof authorized to give a
consent) consent to such change.
9.3 Compliance with Trust Indenture Act. Every amendment to this Indenture
or the Notes shall comply with the TIA as then in effect.
9.4 Revocation and Effect of Consents and Waivers.
(a) A consent to an amendment, supplement or waiver by a Holder of a Note
shall bind the Holder and every subsequent Holder of that Note or portion of the
Note that evidences the same debt as the consenting Holder's Note, even if
notation of the consent or waiver is not made on the Note. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Note or portion of the Note if the Trustee receives the notice of revocation
before the date the amendment, supplement or waiver becomes effective. After an
amendment, supplement or waiver becomes effective, it shall bind every Holder,
except as otherwise provided in this Article IX. An amendment, supplement or
waiver shall become effective upon receipt by the Trustee of the requisite
number of written consents under Section 9.2.
(b) The Company may, but shall not be obligated to, fix a record date,
which need not be the date provided in TIA Section 316(c) to the extent it would
otherwise be applicable, for the purpose of determining the Holders entitled to
give their consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 90 days after such record date.
9.5 Notation on or Exchange of Notes. If an amendment or supplement changes
the terms of a Note, the Trustee may require the Holder of the Note to deliver
it to the Trustee. The Trustee may place an appropriate notation on the Note
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Note will
execute and upon Company Order the Trustee will authenticate a new Note that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Note shall not affect the validity of such amendment or supplement.
9.6 Trustee to Sign Amendments and Supplements. The Trustee shall sign any
amendment or supplement authorized pursuant to this Article IX if the amendment
or supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may but need not sign it. In
signing such amendment or supplement the Trustee shall be entitled to receive
indemnity reasonably satisfactory to it and to receive, and (subject to Sections
7.1 and 7.2) shall be fully protected in relying upon, such evidence as it deems
appropriate, including, without limitation, solely on an Opinion of Counsel
stating that such amendment or supplement is authorized or permitted by this
Indenture.
ARTICLE X
SUBORDINATION OF THE NOTES
10.1 Agreement to Subordinate. The Company agrees, and each Holder by
accepting a Note agrees, that Obligations under the Indenture and the Notes are
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment in full, in Cash or Cash Equivalents, of
all Senior Indebtedness of the Company and that the subordination is for the
benefit of the holders of such Senior Indebtedness (and their successors and
assigns) and shall be enforceable by them directly against the Holders (and
their successors and assigns). Only Senior Indebtedness of the Company shall
rank senior to the Notes in accordance with the provisions set forth herein. The
Notes shall in all respects rank pari passu with, or be senior to, all other
indebtedness of the Company.
10.2 Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution
of the assets of the Company to creditors upon a total or partial liquidation or
dissolution of the Company, in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment by the Company for the benefit of its creditors or the marshaling of
the assets and liabilities of the Company:
(a) holders of Senior Indebtedness of the Company shall be entitled to
receive payment in full in Cash or Cash Equivalents of all Obligations due in
respect thereof before Holders shall be entitled to receive any payment of
principal of or interest on the Notes; and
(b) until such Senior Indebtedness is paid in full in Cash or Cash
Equivalents, any distribution to which Holders would be entitled but for this
Article X shall be made to holders of such Senior Indebtedness as their
interests may appear;
except that Holders, with the consent of each Holder affected thereby, may
receive Permitted Junior Securities.
10.3 Default on Senior Indebtedness of the Company.
(a) The Company may not pay the principal of or interest on the Notes or
make any deposit pursuant to Section 8.1 and may not repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes"), other than, with the
consent of each Holder affected thereby, payments and other distributions in the
form of Permitted Junior Securities if:
(A) a payment default on Senior Indebtedness of the Company
occurs and is continuing beyond any applicable grace period; or
(B) any other default occurs and is continuing on Senior
Indebtedness of the Company that permits the holders thereof to
accelerate its maturity and the Trustee receives a notice of that
default (a "Payment Blockage Notice") from the Company or the
holders of such Senior Indebtedness.
(b) Payments on the Notes may and shall be resumed:
(A) in the case of a payment default, upon the date on which
it is cured or waived by holders of Senior Indebtedness; and
(B) in case of a Payment Blockage Notice relating to a
nonpayment default, the earlier of the date on which it is cured
or waived by holders of Senior Indebtedness or 179 days after the
date on which such Payment Blockage Notice is received, unless
the maturity of the relevant Senior Indebtedness of the Company
has been accelerated.
(c) No new Payment Blockage Notice may be delivered unless and until 180
days have elapsed since the termination of the prohibition of payments on the
Notes pursuant to the immediately prior Payment Blockage Notice.
(d) No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice unless that default shall have
been cured or waived for a period of not less than 90 days.
10.4 Acceleration of Payment of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company or the Trustee shall
promptly notify the holders of the Senior Indebtedness (if any is outstanding)
of the Company (or their Representative) of the acceleration. If Senior
Indebtedness of the Company is outstanding, the Company may not make payments
under the Notes in respect of such acceleration until five Business Days after
such notice, subject to Section 10.2 and Section 10.3.
10.5 When Distribution Must Be Paid Over. If a distribution is made to the
Trustee or the Holders that because of this Article X should not have been made
to them, the Trustee or the Holders who receive the distribution shall hold it
in trust for holders of Senior Indebtedness of the Company and pay it over to
them as their interests may appear.
10.6 Subrogation. After all Senior Indebtedness of the Company is paid in
full in Cash or Cash Equivalents and until the Notes are paid in full in Cash or
Cash Equivalents, Holders shall be subrogated to the rights of holders of such
Senior Indebtedness to receive distributions applicable to such Senior
Indebtedness. A distribution made under this Article X to holders of such Senior
Indebtedness which otherwise would have been made to Holders is not, as between
the Company and Holders, a payment by the Company on such Senior Indebtedness.
10.7 Relative Rights. This Article X defines the relative rights of Holders
and holders of Senior Indebtedness of the Company. Nothing in this Indenture
shall:
(a) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay its Obligations in respect
of this Indenture and the Notes in accordance with their terms; or
(b) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of Senior Indebtedness
of the Company to receive distributions otherwise payable to Holders as provided
in this Article X.
10.8 Subordination May Not Be Impaired by Company. No right of any holder
of Senior Indebtedness of the Company to enforce the subordination of the
indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or by its failure to comply with this Indenture.
10.9 Rights of Trustee and Paying Agent.
(a) Notwithstanding Section 10.3, the Trustee or Paying Agent may continue
to make payments on the Notes and shall not be charged with knowledge of the
existence of facts that would prohibit the making of any such payments unless,
not less than one Business Day prior to the date of such payment, the Trustee
receives notice that payments may not be made under this Article X. The Company,
the Registrar or co-Registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness may give the notice; provided, however, that, if the holders
of an issue of Senior Indebtedness of the Company have a Representative, only
the Representative may give the notice.
(b) The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee. The Registrar and co-Registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article X with respect to any Senior Indebtedness of the Company which may
at any time be held by it, to the same extent as any other holder of such Senior
Indebtedness, and nothing in Article VI shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article X shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7.
10.10 Distribution or Notice to Representative. Whenever a distribution is
to be made or a notice given to holders of Senior Indebtedness of the Company,
the distribution may be made and the notice given to their Representative (if
any).
10.11 Trust Moneys Not Subordinated. Notwithstanding anything contained
herein to the contrary, payments from money or the proceeds of U.S. Government
Obligations held in trust under Section 7.1 by the Trustee for the payment of
principal of and interest on the Notes shall not be subordinated to the prior
payment of any Senior Indebtedness or subject to the restrictions set forth in
this Article X, and none of the Holders shall be obligated to pay over any such
amount to the Company or any holder of Senior Indebtedness of the Company or any
other creditor of the Company.
10.12 Trustee Entitled to Rely. Upon any payment or distribution pursuant
to this Article X, the Trustee and the Holders shall be entitled to rely (i)
upon any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 10.2 are pending, (ii) upon a
certificate of the liquidating trustee or agent or other Person making such
payment or distribution to the Trustee or to the Holders or (iii) upon the
Representative for the holders of Senior Indebtedness of the Company for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of such 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
X. In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness of the Company to participate in any payment or distribution
pursuant to this Article X, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article X, 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. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
10.13 Trustee to Effectuate Subordination. Each Holder by accepting a Note
irrevocably authorizes and directs the Trustee on such Holder's behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness of the
Company as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes, including in the event of any
insolvency, bankruptcy or receivership case or proceeding or any dissolution,
winding-up, liquidation, reorganization or other similar proceedings relative to
the Company (whether voluntary or involuntary and whether in bankruptcy,
insolvency or receivership proceedings or otherwise), the timely filing of a
claim for the unpaid balance of the Holders in the form required in such
proceedings and the causing of such claim to be approved. If the Trustee does
not file a proper claim of proof of debt in the form required in such
proceedings prior to 30 days before the expiration of the time to file such
claims or proofs, then the holders of Senior Indebtedness are hereby authorized
and shall have the right (without any duty) to demand, sue for, collect, receive
and receipt for the payments and distributions in respect of the Senior
Indebtedness, and to file and prove all claims therefor and to take all other
actions in the name of the Holders or otherwise, as any such holder of Senior
Indebtedness or Representative of the holders of Senior Indebtedness may
determine to be necessary or appropriate for the enforcement of the provisions
of this Article X. In no event shall any Holder waive, forgive or cancel any
claim relating to the Note such Holder may now or hereafter have against the
Company.
10.14 Trustee Not Fiduciary for Holders of Senior Indebtedness. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Holders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article X or otherwise. If, however, a payment or
distribution is made to the Holders or the Trustee or the Company or any other
Person that because of this Article X should not have been made to them, those
who receive such payment or distribution shall hold it in trust for holders of
Senior Indebtedness and pay it over to them as their interests may appear.
10.15 Reliance by Holders of Senior Indebtedness on Subordination
Provisions. Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness of the Company,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Notes, to acquire and continue to hold, or to continue to hold,
such Senior Indebtedness and such holder of such Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
10.16 Changes in Senior Indebtedness. At any time and from time to time
without the consent of or notice to any Holder or the Trustee: (a) Senior
Indebtedness may be extended, renewed, modified, waived or terms of Senior
Indebtedness may be amended; (b) any property pledged, mortgaged or otherwise
securing Senior Indebtedness may be sold, exchanged, released or otherwise dealt
with; and (c) any guarantor or any other Person (except the Company) liable in
any manner for the Senior Indebtedness may be released or the terms of any
guarantee of the Senior Indebtedness may be amended or waived. Holders of Senior
Indebtedness may at any time and from time to time without the consent of or
notice to any Holder or the Trustee: (a) exercise or refrain from exercising any
rights against the Company or any other Person; (b) apply any sums by whomever
paid or however realized to Senior Indebtedness; and (c) take any other action
which otherwise might be deemed to impair the rights of the holders of Senior
Indebtedness. Any and all of such actions may be taken by holders of Senior
Indebtedness without incurring any responsibility to any Holder or the Trustee
and without impairing or releasing the obligations of any Holder or the trustee
to the holders of Senior Indebtedness.
ARTICLE XI
MISCELLANEOUS
11.1 Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with another provision which is required to be
included in this Indenture by the TIA, the provision required by the TIA shall
control.
11.2 Notices.
(a) Any notice or communication shall be in writing and delivered in person
or mailed by first-class mail, postage prepaid, addressed as follows:
if to the Company:
COVANTA ENERGY CORPORATION
00 Xxxx Xxxx
Xxxxxxxxx, XX 00000
ATTN: General Counsel's Office
if to the Trustee:
U.S. Bank Trust National Association
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, XX 00000
ATTN: Corporate Trust Services
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
(b) Any notice or communication mailed to a registered Holder shall be
mailed to the Holder at the Holder's address as it appears on the registration
books of the Registrar and shall be sufficiently given if so mailed within the
time prescribed.
(c) Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
11.3 Communication by Holders with Other Holders. Holders may communicate
pursuant to TIA ss. 312(b) with other Holders with respect to their rights under
this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA ss. 312(c).
11.4 Certificate and Opinion as to Conditions Precedent. Upon any request
or application by the Company to the Trustee to take or refrain from taking any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably satisfactory
to the Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee stating that, in the opinion of such counsel, all conditions
precedent have been complied with.
11.5 Statements Required in Certificate or Opinion. Each certificate or
opinion, including each Officers' Certificate with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(a) a statement that the individual making such certificate has read such
covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate are based;
(c) a statement that, in the opinion of such individual, he or she has made
such examination or investigation as is necessary to enable him or her 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 or not, in the opinion of such individual,
such covenant or condition has been complied with.
11.6 Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by, or a meeting of, Holders. The Registrar and the
Paying Agent may make reasonable rules for their functions.
11.7 Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or other
day on which commercial banking institutions are authorized or required to be
closed in New York City, or at a place of payment of the Notes. If a payment
date is a Legal Holiday, payment shall be made on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening period.
If a regular record date is a Legal Holiday, the record date shall not be
affected.
11.8 Governing Law, etc.
(a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. THE PARTIES HERETO EACH
HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW.
(b) The Company hereby:
(A) agrees that any suit, action or proceeding against it
arising out of or relating to this Indenture or the Notes, as the
case may be, may be instituted in any Federal or state court
sitting in The City of New York,
(B) waives to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to the
laying of venue of any such suit, action or proceeding, and any
claim that any suit, action or proceeding in such a court has
been brought in an inconvenient forum,
(C) irrevocably submits to the non-exclusive jurisdiction of
such courts in any suit, action or proceeding,
(D) agrees that final judgment in any such suit, action or
proceeding brought in such a court shall be conclusive and
binding may be enforced in the courts of the jurisdiction of
which it is subject by a suit upon judgment, and
(E) agrees that service of process by mail to the addressed
specified herein shall constitute personal service of such
process on it in any such suit, action or proceeding.
(c) Nothing in this Section 11.8 shall affect the right of the Trustee or
any Holder of the Notes to serve process in any other manner permitted by law.
11.9 No Recourse Against Others. An incorporator, director, officer,
employee, stockholder or controlling person, as such, of the Company shall not
have any liability for any obligations of the Company under the Notes, this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder shall waive and
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
11.10 Successors. All agreements of the Company in this Indenture and the
Notes shall bind its successors. All agreements of the Trustee in this Indenture
shall bind its successors.
11.11 Duplicate and Counterpart Originals. The parties may sign any number
of copies of this Indenture. One signed copy is enough to prove this Indenture.
This Indenture may be executed in any number of counterparts, each of which so
executed shall be an original, but all of them together represent the same
agreement.
11.12 Severability. In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
11.13 Table of Contents; Headings. The table of contents and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not intended to be considered a part hereof and shall not
modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
COVANTA ENERGY CORPORATION
By:
-------------------------
Name:Xxxxxxx Xxxxxxx
Title: CEO and President
U.S. BANK TRUST NATIONAL
ASSOCIATION,
as Trustee
By:
-------------------------
Name:
Title:
EXHIBIT A
FORM OF NOTE
------------
[FOR GLOBAL NOTES:
"THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO
HEREINAFTER.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC 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 THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF."
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR SUCH
OPINIONS OF COUNSEL, CERTIFICATES AND/OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE IN FORM REASONABLY SATISFACTORY TO IT AS PROVIDED FOR IN THE INDENTURE
TO CONFIRM THAT THE TRANSFER COMPLIED WITH THE FOREGOING RESTRICTIONS AS
PROVIDED FOR IN THE INDENTURE."]
FORM OF FACE OF NOTE
No. [___]
Principal Amount $[______________]
[For Global Notes: as revised by the Schedule of Increases and
Decreases in Global Note attached hereto]
CUSIP NO. 22281N AB9
ISIN NO. US22281NA B91
Covanta Energy Corporation, a Delaware corporation, promises to pay to
[___________], or registered assigns, the principal sum of [__________________]
Dollars as revised by the Schedule of Increases and Decreases in Global Note
attached hereto, the dates provided for herein.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Additional provisions of this Note are set forth on the other
side of this Note.
COVANTA ENERGY CORPORATION
By:
-------------------------
Name: Xxxxxxx Xxxxxxx
Title: CEO and President
By: Xxxxxxx Xxxxxxx, Esq.
-------------------------
Name: Vice-President
Title:
CERTIFICATE OF AUTHENTICATION
This is one of
the Notes referred
to in the Indenture.
By: ______________________
Authorized Signatory Date: ___________________
FORM OF REVERSE SIDE OF NOTE
7.5% Subordinated Unsecured Notes due 2012
1. Interest
Covanta Energy Corporation, a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, the "Company"), promises to pay interest on the principal amount of
this Note at the rate per annum shown above. The Company will pay interest
semiannually in arrears on each Interest Payment Date of each year commencing
September 15, 2004. Interest on the Notes will accrue from the most recent date
to which interest has been paid on the Notes or, if no interest has been paid,
from September 15, 2004. The Company will repay an amount of outstanding
principal on this Note equal to the product of $3.9 million multiplied by the
ratio of:
the principal amount of this Note
----------------------------------------------------------
the principal amount of all Outstanding Notes
on March 7 of each of 2006, 2007, 2008, 2009, 2010 and 2011, to be distributed
pro rata to the holders of the Notes. The Company will repay the remaining
outstanding principal amount of the Notes, together with accrued and unpaid
interest thereon, on March 7, 2012.
Any Note issued after the Issue Date shall be accompanied by (i)
the right to receive on the next Interest Payment Date accrued interest from the
date of initial distribution of Notes under the Indenture (or, in the case of a
Note which is issued after one or more Interest Payment Dates, the most recent
Interest Payment Date) to the date of issuance (whether or not such Note is
outstanding on the Record Date applicable to such Interest Payment Date) and
(ii) in the case of any Note which is issued after one or more Interest Payment
Dates, cash equal to the amount of interest which would have been payable on
such Notes if it had been outstanding on such Interest Payment Date(s).
Notwithstanding clause (i) of the previous sentence, (x) any Note issued in the
interval between a Record date and the applicable Interest Payment Date shall be
accompanied by a cash payment equal to the amount of interest which would have
been payable on such Note on the applicable Interest Payment Date had such Note
been outstanding on such Record Date and (y) the Holder of such Note shall not
be entitled to receive any interest payment on such Interest Payment Date.
Interest will be computed on the basis of a 360-day year of
twelve 30-day months. To the extent lawful, the Company shall pay interest on
overdue principal and on overdue installments of interest at the rate borne by
the Notes plus 1.0%.
2. Method of Payment
Prior to 10:00 a.m. New York City time on the date on which any
principal of or interest on any Note is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal and/or interest. The Company will pay interest (except Defaulted
Interest) to the Persons who are registered Holders of Notes at the close of
business on the Record Date preceding the Interest Payment Date even if Notes
are canceled, repurchased or redeemed after the Record Date and on or before the
relevant Interest Payment Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company will pay principal and interest in
U.S. Legal Tender.
Payments in respect of Notes represented by a Global Note
(including principal and interest) will be made by the transfer of immediately
available funds to the accounts specified by DTC. The Company will make all
payments in respect of a Certificated Note (including principal and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Notes may also be made, in the case of a Holder of
at least $5,000,000 aggregate principal amount of Notes, by wire transfer to a
U.S. dollar account maintained by the payee with a bank in the United States if
such Holder elects payment by wire transfer by giving written notice to the
Trustee or the Paying Agent to such effect designating such account no later
than 15 days immediately preceding the relevant due date for payment (or such
other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, U.S. Bank Trust National Association (the "Trustee"),
will act as Trustee, Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-Registrar without notice to any Holder.
The Company may act as Paying Agent, Registrar or co-Registrar.
4. Indenture
The Company issued the Notes under an Indenture, dated as of
March [__], 2004 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the TIA. Capitalized terms used
herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture and the TIA for a statement of those terms. Each Holder by
accepting a Note, agrees to be bound by all of the terms and provisions of the
Indenture, as amended or supplemented from time to time.
The Notes are general unsecured obligations of the Company
subordinated to Senior Indebtedness of the Company as provided in the Indenture.
All Notes will be treated as a single class of securities under the Indenture.
5. Redemption
The Company may redeem the Notes, at its option, in whole at any
time or in part from time to time, at 100% of the outstanding principal amount
thereof.
In the case of any partial redemption, selection of the Notes for
redemption will be made in accordance with Article IV of the Indenture. On and
after the redemption date, interest will cease to accrue on Notes or portions
thereof called for redemption as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to the Indenture.
6. Repurchase at Option of Holders.
Subject to the Company's right to redeem the Notes pursuant to
Section 4.1 of the Indenture, upon the occurrence of a Change of Control, the
Company will be required to make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (in a minimum aggregate principal amount at
Stated Maturity of $500 or an integral multiple of $500) of such Holder's Notes
at a purchase price in cash equal to 101% of principal amount of the Notes
repurchased plus accrued and unpaid interest on the Notes repurchased to the
date of repurchase (the "Change of Control Payment"). Within 10 days following
any Change of Control, if the Company has not sent a redemption notice pursuant
to Section 4.3 of the Indenture for all of the Notes, the Company will mail a
notice to each Holder setting forth the procedures governing the Change of
Control Offer as required by the Indenture.
If the Company or a Subsidiary consummates any Asset Sale, and
the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company will,
subject to the Intercreditor Agreement, commence an offer to all Holders and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (an "Asset Sale Offer")
pursuant to Section 4.8 of the Indenture to purchase or redeem the maximum
principal amount at Stated Maturity of Notes and such other pari passu
Indebtedness that may be purchased or redeemed out of the Excess Proceeds. The
offer price for the Notes in any Asset Sale Offer will be equal to 100% of the
principal amount thereof plus accrued and unpaid interest on the Notes to be
purchased to the date fixed for the closing of such Asset Sale Offer in
accordance with the procedures set forth in the Indenture, and will be payable
in cash. If any Excess Proceeds remain after consummation of an Asset Sale
Offer, the Company and its Restricted Subsidiaries may use those Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and principal amount of other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and other pari passu Indebtedness to be purchased
or redeemed on a pro rata basis. Upon the commencement of an Asset Sale Offer,
the Company will send, by first class mail, a notice to each of the Holders
containing all instructions and materials necessary to enable such Holders to
tender Notes pursuant to the Asset Sale Offer. Holders electing to have a Note
purchased pursuant to any Asset Sale Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date.
7. Subordination
This Note is subordinated in right of payment, as set forth in
the Indenture, to the prior payment in full in Cash or Cash Equivalents of all
existing and future Senior Indebtedness of the Company. This Note in all
respects ranks pari passu with, or senior to, all other indebtedness of the
Company. By accepting a Note, each Holder agrees to the subordination provisions
set forth in the Indenture, authorizes the Trustee to acknowledge such
subordination provisions and give them effect and appoints the Trustee as
attorney-in-fact for such purpose.
8. Denominations; Transfer; Exchange
The Notes are in fully registered form without coupons, and only
in denominations of principal amount of $500 and any integral multiple thereof.
A Holder may transfer or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange (i) any Notes selected for redemption (except, in the case of a Note
to be redeemed in part, the portion of the Note not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Notes to be redeemed and
ending on the date of such mailing or (ii) any Notes for a period beginning 15
days before an interest payment date and ending on such interest payment date.
9. Persons Deemed Owners
The registered holder of this Note may be treated as the owner of
it for all purposes.
10. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in principal amount of the then
Outstanding Notes and (ii) any default (other than with respect to nonpayment or
in respect of a provision that cannot be amended or supplemented without the
written consent of each Holder affected) or noncompliance with any provision may
be waived with the written consent of the Holders of a majority in aggregate
principal amount of the then Outstanding Notes. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company and
the Trustee may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, or to comply with
Article IV of the Indenture, or to provide for uncertificated Notes in addition
to or in place of certificated Notes, or to add guarantees with respect to the
Notes or to secure the Notes, or to add additional covenants or surrender rights
and powers conferred on the Company, or to comply with any request of the
Commission in connection with qualifying the Indenture under the TIA, or to make
any change that does not adversely affect the rights of any Holder.
12. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the Notes may declare all the
Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes being due and
payable immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
Outstanding Notes may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Notes.
15. Authentication
This Note shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Note.
16. Abbreviations
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP or ISIN Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP or ISIN
numbers to be printed on the Notes and has directed the Trustee to use CUSIP or
ISIN numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. Governing Law
This Note shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture that has in it the text of
this Note in larger type. Requests may be made to: Covanta Energy Corporation,
00 Xxxx Xxxx, Xxxxxxxxx, XX 00000, Attn: General Counsel's Office.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee's name, address and zip code)
(Insert assignee's Social Security or Tax I.D. Number)
and irrevocably appoint agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
Date:____________________ Your Signature:___________________
Signature Guarantee:_________________________________
(Signature must be guaranteed)
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Note.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Exchange Act Rule 17Ad-15.
[For Global Note:
SCHEDULE OF DECREASES IN GLOBAL NOTE
The following decreases in this Global Note have been made:
Date of Exchange Amount of decrease Principal Amount of Signature of
in Principal Amount this Global Note authorized signatory
of this Global Note following such of Trustee or Note
decrease Custodian
________________ ___________________ ___________________ ___________________]
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Sections 3.9 or 4.8 of the Indenture, check the appropriate box below:
[ ] Section 3.9 [ ] Section 4.8
If you want to elect to have only part of the principal amount at Stated
Maturity of the Note purchased by the Company pursuant to Section 3.9 or 4.8 of
the Indenture, state the principal amount at Stated Maturity you elect to have
purchased:
$_______________
Date:______________
Your Signature:_________________________________________
(Sign exactly as your name appears on the face of
this Note)
Tax Identification No.:__________________________________
Signature Guarantee*:____________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
