Exhibit 4.1
EXECUTION COPY
================================================================================
KSL RECREATION GROUP, INC.
10 1/4% SENIOR SUBORDINATED NOTES DUE 2007
-----------------------------
INDENTURE
Dated as of April 30, 1997
-----------------------------
First Trust of New York, National Association
-----------------------------
Trustee
================================================================================
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.............................................................. 1
Section 1.02. Other Definitions. ...................................................... 18
Section 1.03. Incorporation By Reference of Trust Indenture Act........................ 18
Section 1.04. Rules of Construction.................................................... 19
Section 1.05. Compliance Certificates and Opinions..................................... 19
ARTICLE 2 THE NOTES................................................................ 21
Section 2.01. Form and Dating.......................................................... 21
Section 2.02. Execution and Authentication............................................. 22
Section 2.03. Registrar and Paying Agent............................................... 22
Section 2.04. Paying Agent to Hold Money in Trust...................................... 23
Section 2.05. Holder Lists............................................................. 23
Section 2.06. Transfer and Exchange.................................................... 23
Section 2.07. Replacement Notes........................................................ 34
Section 2.08. Outstanding Notes........................................................ 34
Section 2.09. Treasury Notes........................................................... 34
Section 2.10. Temporary Notes.......................................................... 34
Section 2.11. Cancellation............................................................. 35
Section 2.12. Defaulted Interest....................................................... 35
ARTICLE 3 REDEMPTION AND PREPAYMENT................................................ 35
Section 3.01. Applicability of Article................................................. 35
Section 3.02. Election to Redeem; Notice to Trustee.................................... 36
Section 3.03. Selection by Trustee of Notes to Be Redeemed............................. 36
Section 3.04. Notice of Redemption..................................................... 36
Section 3.05. Deposit of Redemption Price.............................................. 37
Section 3.06. Notes Payable on Redemption Date......................................... 37
Section 3.07. Notes Redeemed in Part................................................... 37
Section 3.08. Optional Redemption...................................................... 37
Section 3.09. Mandatory Redemption..................................................... 38
ARTICLE 4 COVENANTS................................................................ 40
Section 4.01. Payment of Principal, Premium and Interest............................... 40
Section 4.02. Maintenance of Office or Agency.......................................... 40
Section 4.03. Money for Security Payments to Be Held In Trust.......................... 40
Section 4.04. Reports.................................................................. 42
Section 4.05. Statement as to Compliance; Notice of Default. .......................... 42
Section 4.06. Payment of Taxes and Other Claims........................................ 43
Section 4.08. Corporate Existence...................................................... 43
Section 4.09. Offer to Repurchase Upon Change of Control............................... 44
Section 4.10. Asset Sales.............................................................. 45
Section 4.11. Limitation on Restricted Payments........................................ 46
Section 4.12. Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock. 51
Section 4.13. Transactions with Affiliates............................................. 54
Section 4.14. Dividend and Other Payment Restrictions Affecting Subsidiaries........... 55
Section 4.15. Limitations on Guarantees of Indebtedness by Restricted Subsidiaries..... 56
Section 4.16 Limitation on Other Senior Subordinated Indebtedness..................... 57
ARTICLE 5 SUCCESSORS............................................................... 58
Section 5.01. Merger, Consolidation, or Sale of All or Substantially All Assets........ 58
Section 5.02. Successor Corporation Substituted........................................ 59
i
ARTICLE 6 DEFAULTS AND REMEDIES.................................................... 59
Section 6.01. Events of Default and Notice Thereof..................................... 59
Section 6.02. Acceleration of Maturity; Rescission..................................... 60
Section 6.03. Other Remedies........................................................... 61
Section 6.04. Waiver of Past Defaults.................................................. 61
Section 6.05. Control by Majority. ................................................... 61
Section 6.06. Limitation on Suits...................................................... 61
Section 6.07. Rights of Holders of Notes to Receive Payment............................ 62
Section 6.08. Collection Suit by Trustee............................................... 62
Section 6.09. Trustee May File Proofs of Claim......................................... 62
Section 6.10. Priorities............................................................... 62
Section 6.11. Undertaking for Costs.................................................... 63
Section 6.12. Waiver of Stay, Extension of Usury Laws.................................. 63
ARTICLE 7 TRUSTEE.................................................................. 63
Section 7.01. Duties of Trustee........................................................ 63
Section 7.02. Rights of Trustee........................................................ 64
Section 7.03. Individual Rights of Trustee............................................. 65
Section 7.04. Trustee's Disclaimer..................................................... 65
Section 7.05. Notice of Defaults....................................................... 65
Section 7.06. Reports by Trustee to Holders of the Notes............................... 65
Section 7.07. Compensation and Indemnity............................................... 66
Section 7.08. Replacement of Trustee................................................... 66
Section 7.09. Successor Trustee by Merger, etc......................................... 67
Section 7.10. Eligibility; Disqualification............................................ 67
Section 7.11. Preferential Collection of Claims Against the Company.................... 68
Section 7.12. Rights of Holders with Respect to Time Method and Place.................. 68
ARTICLE 8 DEFEASANCE AND COVENANT DEFEASANCE....................................... 68
Section 8.01. Option to Effect Defeasance or Covenant Defeasance....................... 68
Section 8.02. Defeasance and Discharge................................................. 68
Section 8.03. Covenant Defeasance...................................................... 68
Section 8.04. Conditions to Defeasance or Covenant Defeasance.......................... 69
Section 8.05. Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions................................................. 70
Section 8.06. Reinstatement............................................................ 71
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER..........................................71
Section 9.01. Without Consent of Holders of Notes...................................... 71
Section 9.02. With Consent of Holders of Notes......................................... 72
Section 9.03. Compliance with TIA...................................................... 73
Section 9.04. Revocation and Effect of Consents........................................ 73
Section 9.05. Notation on or Exchange of Notes......................................... 73
ARTICLE 10 SUBORDINATION........................................................... 74
Section 10.01. Agreement to Subordinate................................................ 74
Section 10.02. Liquidation; Dissolution; Bankruptcy.................................... 74
Section 10.03. Default on Designated Senior Indebtedness............................... 74
Section 10.04. Acceleration of Securities.............................................. 75
ii
Section 10.05. When Distribution Must Be Paid Over..................................... 75
Section 10.06. Notice by Company....................................................... 76
Section 10.07. Subrogation............................................................. 76
Section 10.08. Relative Rights......................................................... 76
Section 10.09. Subordination May Not Be Impaired by Company............................ 77
Section 10.10. Distribution or Notice to Representative................................ 77
Section 10.11. Rights of Trustee and Paying Agent...................................... 77
Section 10.12. Authorization to Effect Subordination................................... 78
ARTICLE 11 SATISFACTION AND DISCHARGE...............................................78
Section 11.01 Satisfaction and Discharge of Indenture................................. 78
Section 11.02 Application of Trust Money.............................................. 79
ARTICLE 12 MISCELLANEOUS............................................................79
Section 12.01. Conflict of Any Provision of Indenture with TIA......................... 79
Section 12.02. Notices................................................................. 79
Section 12.03. Communication by Holders of Notes with Other Holders of Notes........... 80
Section 12.04. Certificate and Opinion as to Conditions Precedent...................... 80
Section 12.05. Legal Holidays.......................................................... 81
Section 12.06. No Personal Liability of Directors, Officers, Employees and Stockholders.81
Section 12.07. Governing Law........................................................... 81
Section 12.08. No Adverse Interpretation of Other Agreements........................... 81
Section 12.09. Successors and Assigns.................................................. 81
Section 12.10. Severability............................................................ 81
Section 12.11. Counterpart Originals................................................... 82
Section 12.12. Table of Contents, Headings, etc........................................ 82
iii
ANNEXES
Annex A Specified Property
EXHIBITS
Exhibit A-1 Form of Restricted Definitive Note, Regulation S Permanent Global
Note and Rule 144A Global Note
Exhibit A-2 Form of Regulation S Temporary Global Note
Exhibit A-3 Form of Unrestricted Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional Accredited Investor
Exhibit E Form of Supplemental Indenture to be Delivered by Subsidiary
Guarantors
iv
CROSS-REFERENCE TABLE*
Trust Indenture Indenture Section
Act Section
310(a)(1)........................................................... 7.10
(a)(2)........................................................... 7.10
(a)(3)........................................................... N.A.
(a)(4)........................................................... N.A.
(a)(5)........................................................... 7.10
(b).............................................................. 7.10
(c).............................................................. N.A.
311(a).............................................................. 7.11
(b).............................................................. 7.11
(c).............................................................. N.A.
312(a).............................................................. 11.03
(b).............................................................. 11.03
(c).............................................................. 11.03
313(a).............................................................. 7.06
(b)(1)........................................................... N.A.
(b)(2)........................................................... 7.06; 7.07
(c).............................................................. 7.06; 10.02
(d).............................................................. 7.06
314(a).............................................................. 4.04; 11.02
(b).............................................................. N.A.
(c)(1)........................................................... 11.04
(c)(2)........................................................... 11.04
(c)(3)........................................................... N.A.
(d).............................................................. N.A.
(f).............................................................. N.A.
315(a).............................................................. 7.01
(b).............................................................. 7.05; 11.02
(c).............................................................. 7.01
(d).............................................................. 7.01
(e).............................................................. 6.11
316(a)(last sentence)............................................... 2.09
(a)(1)(A)........................................................ 6.05
(a)(1)(B)........................................................ 6.04
(a)(2)........................................................... N.A.
(b).............................................................. 6.07
317(a)(1)........................................................... 6.08
(a)(2)........................................................... 6.09
(b).............................................................. 2.04
318(a).............................................................. 11.01
(b).............................................................. N.A.
(c).............................................................. 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
v
INDENTURE dated as of April 30, 1997 between KSL Recreation Group, Inc.,
a Delaware corporation, and First Trust of New York, National Association, as
trustee (the "Trustee"). The Company and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 10 1/4% Senior Subordinated Notes due 2007 (the "Notes")
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
Set forth below are certain defined terms used in this Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Accredited Investor" has the meaning set forth in Rule 501(a) (1), (2),
(3) of (7) of the Securities Act.
"Acquired Indebtedness" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person and (ii) Indebtedness encumbering any asset acquired by such
specified Person.
"Adjusted Net Membership Deposits" for any period means, with respect to
any specified Person, the amount of refundable membership deposits paid in such
period to such specified Person or any Restricted Subsidiary of such specified
Person by new and upgraded private club members and by existing club members who
have converted to new membership plans, in each case in cash, plus principal
payments in cash received by such specified Person or any Restricted Subsidiary
of such specified Person in such period on notes in respect thereof, minus the
amount of any refunds paid to such specified Person or any Restricted Subsidiary
of such specified Person in cash in such period in respect of such deposits;
provided, however, that all amounts paid to such specified Person or any
Restricted Subsidiary of such Specified Person in such period by existing
private club members in connection with the conversion of such members to new
membership plans within six months after the introduction of such plans shall be
excluded.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise, provided, however,
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in, the Depository.
"Applicable Procedures" means applicable procedures of the Depository,
Euroclear or Cedel Bank, as the case may be.
2
"Asset Sale" means: (i) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets (including by way of a sale and leaseback)
of the Company or any Restricted Subsidiary (each referred to in this definition
as a "disposition") or (ii) the issuance or sale of Equity Interests of any
Restricted Subsidiary (whether in a single transaction or a series of related
transactions), in each case, other than: (a) a disposition of Cash Equivalents,
Investment Grade Securities or obsolete equipment in the ordinary course of
business; (b) the disposition of all or substantially all of the assets of the
Company in a manner permitted pursuant to the provisions described under Section
5.01 or any disposition that constitutes a Change of Control pursuant to this
Indenture; (c) any Restricted Payment that is permitted to be made, and is made,
under Section 4.11; (d) any disposition of assets with an aggregate fair market
value of less than $1 million; (e) any disposition of property or assets by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary; (f) any exchange of like property
pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended, for
use in a Similar Business; (g) any sale leaseback of an asset within 180 days
after the completion of construction or acquisition of such asset; (h)
foreclosures on assets; and (i) any sale of Equity Interests in, or Indebtedness
or other securities of, an Unrestricted Subsidiary.
"Bankruptcy Law" means Title 11, U.S. Code or any similar foreign,
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law, regulation or executive order to close.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock of such Person, including, without limitation, if such Person is
a partnership, partnership interests (whether general or limited) and 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, such partnership.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized and reflected as a
liability on a balance sheet in accordance with GAAP.
"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 thereof, (iii) certificates of
deposit, time deposits 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 commercial
bank having capital and surplus in excess of $500 million, (iv) repurchase
obligations for underlying securities of the types described in clauses (ii) and
(iii) of this definition entered into with any financial institution meeting the
qualifications specified in
3
clause (iii) of this definition, (v) commercial paper rated A-1 or the
equivalent thereof by Xxxxx'x or S&P and in each case maturing within one year
after the date of acquisition, (vi) investment funds investing 95% of their
assets in securities of the types described in clauses (i)-(v) above, (vii)
readily marketable direct obligations issued by any state of the United States
of America or any political subdivision thereof having one of the two highest
rating categories obtainable from either Xxxxx'x or S&P and (viii) Indebtedness
or preferred stock issued by Persons with a rating of "A" or higher from S&P or
"A2" or higher from Xxxxx'x.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the assets of
the Company and its Restricted Subsidiaries, taken as a
whole; or
(ii) the Company becomes aware of (by way of a report or any
other filing pursuant to Section 13(d) of the Exchange Act,
proxy, vote, written notice or otherwise) the acquisition by
any Person or group (within the meaning of Section 13(d)(3)
or Section 14(d)(2) of the Exchange Act, or any successor
provision), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the
meaning of Rule 13d-5(b)(1) under the Exchange Act), other
than the Permitted Holders and their Related Parties, in a
single transaction or in a related series of transactions,
by way of merger, consolidation or other business
combination or purchase of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act, or any
successor provision) of more of the total voting power of
the Voting Stock of the Company than the Permitted Holders
and their Related Parties beneficially own at the time the
Company so becomes aware of such acquisition if, at such
time, the Permitted Holders and their Related Parties do not
have the right or the ability by voting power, contract or
otherwise to elect or designate for election a majority of
the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Company" means KSL Recreation Group, Inc., a Delaware corporation, and
any successor thereto pursuant to Section 5.01 hereof.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company (i) by its Chairman, a Vice Chairman, its
President or a Vice President and (ii) by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary and delivered to the Trustee; provided,
however, that such written request or order may be signed by any two of the
officers or directors listed in clause (i) above in lieu of being signed by one
of such officers or directors listed in such clause (i) and one of the officers
listed in clause (ii) above.
"Concurrent Transactions" has the meaning set forth in the Offering
Memorandum.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus, without
duplication, (a) provision for taxes based on income or profits of such Person
for such period deducted in computing Consolidated Net Income or, if different,
paid or accrued pursuant to, or on terms substantially similar to those
contained in, the Tax Sharing Agreement, plus (b) Consolidated Interest Expense
of such Person for such period, plus (c) Consolidated
4
Depreciation and Amortization Expense of such Person for such period, plus (d)
Adjusted Net Membership Deposits (as recorded on the Company's consolidated
statement of cash flows for the applicable period), plus (e) any expenses or
charges related to any Equity Offering or Indebtedness permitted to be incurred
by this Indenture (including such expenses or charges related to the
Refinancings) and deducted in computing Consolidated Net Income, plus (f) the
amount of any restructuring charge deducted in such period in computing
Consolidated Net Income, plus (g) without duplication, any other non-cash
charges reducing Consolidated Net Income for such period (excluding any such
charge which requires an accrual of a cash reserve for anticipated cash charges
for any future period and amortization of a prepaid cash expense that was paid
in a prior period), less, without duplication (h) non-cash items increasing
Consolidated Net Income of such Person for such period (excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated
cash charges in any prior period).
"Consolidated Depreciation and Amortization Expense" means with respect
to any Person for any period, to the extent deducted in computing Consolidated
Net Income, the total amount of depreciation and amortization expense (including
the amortization of deferred financing fees) and other noncash charges
(excluding any noncash item that represents an accrual, reserve or amortization
of a cash expenditure that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period on a consolidated basis and otherwise
determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of: (a) to the extent deducted in computing Consolidated Net
Income, consolidated interest expense of such Person and its Restricted
Subsidiaries for such period (including amortization of original issue discount,
non-cash interest payments, the interest component of Capitalized Lease
Obligations and net payments (if any) pursuant to Hedging Obligations, but
excluding amortization of deferred financing fees) and (b) consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, and otherwise determined
in accordance with GAAP; provided, however, that (i) any net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto)
shall be excluded, (ii) the Net Income for such period shall not include the
cumulative effect of a change in accounting principles during such period, (iii)
any net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to asset dispositions other than in the ordinary course of business
(as determined in good faith by the Board of Directors of the Company) shall be
excluded, (iv) the Net Income of the referent Person attributable to any Person
that is not a Subsidiary, or is an Unrestricted Subsidiary, or that is accounted
for by the equity method of accounting, shall be included only to the extent of
the amount of dividends or distributions or other payments paid in cash (or to
the extent converted into cash) to the referent Person or a Wholly Owned
Restricted Subsidiary thereof in respect of such period, (v) the Net Income of
any Person acquired in a pooling of interests transaction shall not be included
for any period prior to the date of such acquisition and (vi) the Net Income for
such period of any Restricted Subsidiary shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of its Net Income to the referent Person or a Restricted
Subsidiary thereof is not at the date of determination permitted without any
prior governmental approval (which has not been obtained) or, directly or
indirectly, by the operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, unless such
restriction with respect to the payment of dividends or in similar distributions
has been legally waived.
5
"Contingent Obligations" means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, or (iii)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation against loss in respect
thereof.
"Corporate Sale Transaction" means any Restricted Payment consisting of
the dividend of Equity Interests of any Subsidiary and/or the designation of any
Restricted Subsidiary as an Unrestricted Subsidiary.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Notes" means Restricted Definitive Notes and Unrestricted
Definitive Notes.
"Depository" means, with respect to any Global Note, the Person
specified in Section 2.03 hereof as the Depositary with respect to such Note,
until a successor shall have been appointed and become such pursuant to the
applicable provision of this Indenture, and, thereafter, "Depository" shall mean
or include such successor.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Sale that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate, setting
forth the basis of such valuation, executed by the principal executive officer
and the principal financial officer of the Company, less the amount of cash or
Cash Equivalents received in connection with a sale of such Designated Noncash
Consideration.
"Designated Preferred Stock" means preferred stock of the Company (other
than Disqualified Stock) that is issued for cash (other than to a Restricted
Subsidiary) and is so designated as Designated Preferred Stock, pursuant to an
Officers' Certificate executed by the principal executive officer and the
principal financial officer of the Company, on the issuance date thereof, the
cash proceeds of which are excluded from the calculation set forth in paragraph
(c) of Section 4.11.
"Designated Senior Indebtedness" means (i) any Indebtedness outstanding
under the New Credit Facility and (ii) any other Senior Indebtedness or
Guarantor Senior Indebtedness permitted hereunder the principal amount of which
is $50 million or more and that has been designated by the Company as
"Designated Senior Indebtedness."
6
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, in each case prior to the date 91 days after the
maturity date of the Notes; provided, however, that if such Capital Stock is
issued to any plan for the benefit of employees of the Company or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy applicable statutory or
regulatory obligations.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any Indebtedness that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any (i) issuance of common stock or preferred
stock by the Company (excluding Disqualified Stock) that is registered pursuant
to the Securities Act, other than issuances registered on Form S-8 and issuances
registered on Form S-4, and (ii) any private issuance of common stock or
preferred stock of the Company (excluding Disqualified Stock), other than
issuances of common stock pursuant to employee benefit plans of the Company or
otherwise as compensation to employees of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Registrable Notes (as
defined in the Registration Rights Agreement) for Exchange Notes.
"Excluded Contribution" means the net cash proceeds received by the
Company after the Issuance Date from (a) contributions to its common equity
capital and (b) the sale (other than to a Subsidiary or to any Company or
Subsidiary management equity plan or stock option plan or any other management
or employee benefit plan or agreement) of Capital Stock of the Company (other
than Disqualified Stock), in each case, designated as Excluded Contributions
pursuant to an Officers' Certificate executed by the principal executive officer
and the principal financial officer of the Company on the date such capital
contributions are made or the date such Capital Stock is sold, as the case may
be, the cash proceeds of which are excluded from the calculation set forth in
paragraph (c) of Section 4.11.
"Existing Indebtedness" means Indebtedness of the Company or its
Restricted Subsidiaries in existence on the Issuance Date, plus interest
accruing thereon, after application of the net proceeds from the initial sale of
the Notes as described in the Offering Memorandum.
"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of Consolidated Cash Flow of such Person for such period to
the Fixed Charges of such Person for such period. In the event that the Company
or any of its Restricted Subsidiaries incurs, assumes, guarantees or redeems any
Indebtedness (other than in the case of Indebtedness arising under revolving
credit borrowings, in which case Consolidated Interest Expense shall be computed
based upon the average daily balance of such Indebtedness during the applicable
period) or issues or redeems preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage Ratio
is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, guarantee or
redemption of Indebtedness, or such issuance or redemption of
7
preferred stock, as if the same had occurred at the beginning of the applicable
four-quarter period. For purposes of making the computation referred to above,
Investments, acquisitions, dispositions, mergers, consolidations and
discontinued operations (as determined in accordance with GAAP) that have been
made by the Company or any of its Restricted Subsidiaries during the
four-quarter reference period or subsequent to such reference period and on or
prior to or simultaneously with the Calculation Date shall be calculated on a
pro forma basis assuming that all such Investments, acquisitions, dispositions,
mergers, consolidations and discontinued operations (and the reduction of any
associated fixed charge obligations and the change in Consolidated Cash Flow
resulting therefrom) had occurred on the first day of the four-quarter reference
period. If, since the beginning of such period, any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) shall have made any
Investment, acquisition, disposition, discontinued operation, merger or
consolidation that would have required adjustment pursuant to this definition
had such Person been a Restricted Subsidiary at the time of such Investment,
acquisition, disposition, merger, consolidation or discontinued operation, then
the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
thereto for such period as if such Investment, acquisition, disposition,
discontinued operation, merger or consolidation had occurred at the beginning of
the applicable four quarter period. For purposes of this definition, whenever
pro forma effect is to be given to a transaction, the pro forma calculations
shall be made in good faith by a responsible financial or accounting officer of
the Company. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness shall be calculated as
if the rate in effect on the Calculation Date had been the applicable rate for
the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed
to accrue at an interest rate reasonably determined by a responsible financial
or accounting officer of the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP. For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.
Interest on Indebtedness that may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen as the Company
may designate.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (a) Consolidated Interest Expense of such Person for such period and (b)
all cash dividend payments (excluding items eliminated in consolidation) on any
series of preferred stock of such Person or its Restricted Subsidiaries.
"Foreign Subsidiary" means a Restricted Subsidiary not organized or
existing under the laws of the United States, any State thereof, the District of
Columbia or any territory thereof.
"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, which are in effect on the Issuance Date. For the purposes of this
Indenture, the term "consolidated" with respect to any Person shall mean such
Person consolidated with its Restricted Subsidiaries, and shall not include any
Unrestricted Subsidiary.
"Global Note" means, individually and collectively, the Regulation S
Global Note, the Rule 144A Global Note and the Unrestricted Global Note.
8
"Government Securities" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Securities
or a specific payment of principal of or interest on any such Government
Securities held by such custodian for the account of the holder of such
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Securities or the specific payment of principal of or interest on
the Government Securities evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"Guarantor Senior Indebtedness" means, with respect to any Subsidiary
Guarantor, (i) the Obligations of such Subsidiary Guarantor under the New Credit
Facility and (ii) any other Indebtedness of such Subsidiary Guarantor permitted
to be incurred by such Subsidiary Guarantor under the terms of this Indenture,
unless the instrument under which such Indebtedness is incurred expressly
provides that it is on a parity with or subordinated in right of payment to the
Subsidiary Guarantee of such Subsidiary Guarantor, including, with respect to
(i) and (ii), interest accruing subsequent to the filing of, or which would have
accrued but for the filing of, a petition for bankruptcy, whether or not such
interest is an allowable claim in such bankruptcy proceeding. Notwithstanding
anything to the contrary in the foregoing, Guarantor Senior Indebtedness will
not include (1) any liability for federal, state, local or other taxes owed or
owing by any Subsidiary Guarantor, (2) any obligation of a Subsidiary Guarantor
to the Company, (3) any accounts payable or trade liabilities arising in the
ordinary course of business (including instruments evidencing such liabilities)
other than obligations in respect of bankers' acceptances and letters of credit
under the New Credit Facility, (4) any Indebtedness that is incurred in
violation of this Indenture, (5) Indebtedness which, when incurred and without
respect to any election under Section 1111 (b) of Xxxxx 00, Xxxxxx Xxxxxx Code,
is without recourse to a Subsidiary Guarantor, (6) any Indebtedness, guarantee
or obligation of any Subsidiary Guarantor which is subordinate or junior to any
other Indebtedness, guarantee or obligation of such Subsidiary Guarantor, (7)
Indebtedness evidenced by any Subsidiary Guarantee and (8) Capital Stock of any
Subsidiary Guarantor.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) currency exchange or interest rate swap agreements,
currency exchange or interest rate cap agreements and currency exchange or
interest rate collar agreements and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in currency exchange or
interest rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, (a) any indebtedness
of such Person, whether or not contingent (i) in respect of borrowed money, (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit or bankers' acceptances (or, without double counting, reimbursement
agreements in respect thereof), (iii) representing the balance deferred and
unpaid of the purchase price of any property (including Capitalized Lease
Obligations), except any such balance that constitutes a trade payable or
similar obligation to a trade creditor, in each case, accrued in the ordinary
course of business
9
or (iv) representing any Hedging Obligations, if and to the extent any of the
foregoing Indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, (b) to the extent not otherwise included, any obligation
by such Person to be liable for, or to pay, as obligor, guarantor or otherwise,
on the Indebtedness of another Person (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), (c) to the
extent not otherwise included, Indebtedness of another Person secured by a Lien
on any asset owned by such Person (whether or not such Indebtedness is assumed
by such Person) and (d) the liquidation preference of all outstanding
Disqualified Stock of such Person; provided, however, that Contingent
Obligations incurred in the ordinary course of business shall be deemed not to
constitute Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means an accounting, appraisal,
investment banking firm or consultant to Persons engaged in Similar Businesses
of nationally recognized standing that is, in the judgment of the Company's
Board of Directors, qualified to perform the task for which it has been engaged.
"Initial Purchasers" mean Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, Salomon Brothers Inc, Credit Suisse First Boston Corporation,
BancAmerica Securities, Inc., Xxxxxxxxxx Securities and Scotia Capital Markets
(USA) Inc.
"Interest Payment Date" means each May 1 and November 1, whether or not
such day is a Business Day.
"interest" means all interest payable with respect to the Notes,
including, without limitation Special Interest.
"Investment Grade Securities" means (i) securities issued or directly
and fully guaranteed or insured by the United States government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such rating by such rating organization, or, if no
rating of S&P or Moody's then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries, and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of loans (including
guarantees), advances or capital contributions (excluding advances to customers,
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 issued by any other Person
and investments that are required by GAAP to be classified on the balance sheet
of the Company in the same manner as the other investments included in this
definition to the extent such transactions involve the transfer of cash or other
property. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.11: (i) "Investments" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of the
net assets of a Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
10
Subsidiary equal to an amount (if positive) equal to (x) the Company's
"Investment" in such Subsidiary at the time of such redesignation less (y) the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of such Subsidiary at the time of such
redesignation; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issuance Date" means the closing date for the sale and original
issuance of the Notes under this Indenture.
"Joint Venture" means a corporation, partnership or other entity engaged
in a Similar Business as to which the Company (directly or through one or more
Restricted Subsidiaries) owns an Equity Interest.
"KKR" means KKR Associates, L.P., a Delaware limited partnership.
"KSL Land Note" means the note payable to the Company by KSL Land
Corporation, dated April 30, 1997, evidencing the indebtedness of KSL Land
Corporation to the Company pursuant to the Refinancings.
"KSL Recreation" means KSL Recreation Corporation, a Delaware
corporation, the corporate parent of the Company, and any successor thereto.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction);
provided that in no event shall an operating lease be deemed to constitute a
Lien.
"Management Group" means the group consisting of the Officers of the
Company.
"Maturity" when used in respect to any Note means the date on which the
principal of (and premium, if any) and interest on such Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or the
applicable Redemption Date and whether by declaration of acceleration, call for
redemption or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with respect to any Person, the consolidated net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends.
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including
any cash proceeds received upon the sale or other disposition of Designated
Non-Cash Proceeds), net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and brokerage and sales
11
commissions), and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required to be
applied to the repayment of principal, premium (if any) and interest on
Indebtedness required (other than required by clause (i) of the second paragraph
of Section 4.10) to be paid as a result of such transaction and any deduction of
appropriate amounts to be provided by the Company as a reserve in accordance
with GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Company after such sale or other disposition
thereof, including, without limitation, pension and other post-employment
benefit liabilities and liabilities related to environmental matters or against
any indemnification obligations associated with such transaction.
"New Credit Facility" means that certain credit facility dated as of
April 30, 1997 by and among the Company and Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation, as a co-syndication agent and the documentation agent,
The Bank of Nova Scotia, as a co-syndication agent and the administrative agent
and BancAmerica Securities, Inc., as the syndication agent, and the lenders from
time to time party thereto, including any collateral documents, instruments and
agreements executed in connection therewith, and the term New Credit Facility
shall also include any amendments, supplements, modifications, extensions,
renewals, restatements or refundings thereof and any credit facilities that
replace, refund or refinance any part of the loans, other credit facilities or
commitments thereunder, including any such replacement, refunding or refinancing
facility that increases the amount borrowable thereunder or alters the maturity
thereof, provided, however, that there shall not be more than one facility at
any one time that constitutes the New Credit Facility and, if at any time there
is more than one facility which would constitute the New Credit Facility, the
Company will designate to the Trustee which one of such facilities will be the
New Credit Facility for purposes of this Indenture.
"Notes" means the Company's 10 1/4% Senior Subordinated Notes due 2007
issued in compliance with the Indenture.
"Note Custodian" means custodian for the Depository of the Global Notes,
or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and banker's acceptances), damages
and other liabilities payable under the documentation governing any
Indebtedness.
"Offering Memorandum" means that certain offering memorandum with
respect to the Notes, dated April 24, 1997.
"Officer" means the Chairman of the Board, the President, any Vice
President or the Secretary of the Company.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company that meets the requirements set
forth in Section 1.05.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee. Each such
opinion shall include the statements provided for in TIA Section 314(e) to the
extent applicable.
12
"Pari Passu Indebtedness" means (a) with respect to the Notes,
Indebtedness which ranks pari passu in right of payment to the Notes and (b)
with respect to any Subsidiary Guarantee, Indebtedness which ranks pari passu in
right of payment to such Subsidiary Guarantee.
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Holders" means KKR and any of its Affiliates and the
Management Group.
"Permitted Investments" means (a) any Investment in the Company or any
Restricted Subsidiary; (b) any Investment in cash and Cash Equivalents or
Investment Grade Securities; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person that is engaged in a Similar Business if
as a result of such Investment (i) such Person becomes a Restricted Subsidiary
or (ii) such Person, in one transaction or a series of related transactions, is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary; (d) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale made pursuant to the provisions of Section 4.10 or any other disposition of
assets not constituting an Asset Sale; (e) any Investment existing on the
Issuance Date; (f) advances to employees not in excess of $10 million
outstanding at any one time; (g) any Investment acquired by the Company or any
of its Restricted Subsidiaries (i) in exchange for any other Investment or
accounts receivable held by the Company or any such Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other Investment or accounts receivable
or (ii) the transfer of title with respect to any secured Investment in default
as a result of a foreclosure by the Company or any of its Restricted
Subsidiaries with respect to such secured Investment; (h) Hedging Obligations
permitted under Section 4.12; (i) loans and advances to officers, directors and
employees for business-related travel expenses, moving expenses and other
similar expenses, in each case, incurred in the ordinary course of business; (j)
any Investment in a Similar Business (other than an Investment in an
Unrestricted Subsidiary) having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (j), that are at the
time outstanding, not to exceed the greater of (x) $50 million and (y) 10% of
Total Assets at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (k) additional Investments having an aggregate
fair market value, taken together with all other Investments made pursuant to
this clause (k), that are at the time outstanding, not to exceed the greater of
(x) $50 million and (y) 10% Total Assets at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value); (l) Investments the
payment for which consists of Equity Interests of the Company (exclusive of
Disqualified Stock); provided, however, that such Equity Interests will not
increase the amount available for Restricted Payments under clause (c) of
Section 4.11; (m) any guarantees permitted to be made pursuant to Section 4.12;
and (n) any transaction to the extent it constitutes an investment that is
permitted by and made in accordance with the provisions of the second paragraph
of Section 4.13 (except transactions described in clauses (ii) and (vi) of such
paragraph).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"preferred stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Private Placement Legend" means the legend set forth in Section
2.07(g)(i)(A) to be placed on all Notes issued under this Indenture except as
permitted pursuant to Section 2.06(g)(i)(B).
13
"Pro Forma Consolidated Cash Flow" means with respect to any Person for
any period the Consolidated Cash Flow of such Person for such period; provided,
however, (i) for purposes of making the computation referred to above,
Investments, acquisitions (including transactions accounted for as
acquisitions), dispositions, mergers, consolidations and discontinued operations
(as determined in accordance with GAAP) that have been made by the Company or
any of its Restricted Subsidiaries during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously with
the date of calculation shall be calculated on a pro forma basis assuming that
all such Investments, acquisitions, dispositions, discontinued operations,
mergers and consolidations (and the reduction of any associated fixed charge
obligations and the change in Consolidated Cash Flow resulting therefrom) had
occurred on the first day of the four-quarter reference period, and (ii) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Investment,
acquisition, disposition, discontinued operation, merger or consolidation that
would have required adjustment pursuant to this definition had such Person been
a Restricted Subsidiary at the time of such Investment, acquisition,
disposition, discontinued operation, merger or consolidation, then Pro Forma
Consolidated Cash Flow shall be calculated giving pro forma effect thereto for
such period as if such Investment, acquisition, disposition, discontinued
operation, merger or consolidation had occurred at the beginning of the
applicable four quarter period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Refinancings" has the meaning set forth in the Offering Memorandum.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of April 30, 1997, by and among the Company and the Initial Purchasers,
as such agreement may be amended, modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the April 15 or October 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note in
the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Regulation S Temporary Global Note upon
expiration of the Restricted Period.
"Regulation S Temporary Global Note" means a temporary global Note in
the form of Exhibit A-2 hereto bearing the Private Placement Legend and
deposited with or on behalf of and registered in the name
14
of the Depository or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes initially sold in reliance on Rule 903
of Regulation S.
"Related Parties" means any Person controlled by a Permitted Holder,
including any partnership of which a Permitted Holder or its Affiliates is the
general partner.
"Repurchase Offer" means an offer made by the Company to purchase all or
any portion of a Holder's Notes pursuant to the provisions described under
Sections 4.09 or 4.10.
"Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Definitive Notes" means Notes that are in the form of the
Notes attached hereto as Exhibit A-1, that do not include the information called
for by footnotes 1 and 2 thereof.
"Restricted Global Notes" means the Regulation S Global Notes and the
Rule 144A Global Notes.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Company that is not then an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A-1, and that is
deposited with and registered in the name of the Depository, representing Notes
sold in reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard and Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Significant Subsidiary" means any Subsidiary which 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 Issuance Date.
"Similar Business" means any business the majority of whose revenues are
derived from the leasing, ownership and/or operation of recreation, leisure
and/or hospitality facilities, including without
15
limitation, golf courses, resort facilities, spas and hotels, or any business or
activity that is reasonably similar thereto or a reasonable extension,
development or expansion thereof or ancillary thereto.
"Senior Indebtedness" means, with respect to the Company, (i) the
Obligations of the Company under the New Credit Facility and (ii) any other
Indebtedness of the Company permitted to be incurred by the Company under the
terms of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes, including, with respect to (i) and (ii), interest
accruing subsequent to the filing of, or which would have accrued but for the
filing of, a petition for bankruptcy, whether or not such interest is an
allowable claim in such bankruptcy proceeding. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness will not include (1) any
liability for federal, state, local or other taxes owed or owing by the Company
or any of its Subsidiaries, (2) any obligation of the Company to any of its
Subsidiaries, (3) any accounts payable or trade liabilities arising in the
ordinary course of business (including instruments evidencing such liabilities)
other than obligations in respect of bankers' acceptances and letters of credit
under the New Credit Facility, (4) any Indebtedness that is incurred in
violation of this Indenture, (5) Indebtedness which, when incurred and without
respect to any election under Section 1111 (b) of Xxxxx 00, Xxxxxx Xxxxxx Code,
is without recourse to the Company, (6) any Indebtedness, guarantee or
obligation of the Company which is subordinate or junior to any other
Indebtedness, guarantee or obligation of the Company, (7) Indebtedness evidenced
by the Notes and (8) Capital Stock of the Company.
"Special Interest" means all interest payable pursuant to Paragraph 2 of
the Restricted Definitive Notes, the Regulation S Global Notes and the Rule 144A
Global Notes.
"Special Record Date" means a date fixed by the Trustee for the payment
of any Defaulted Interest pursuant to Section 2.12.
"Specified Property" means the items set forth on Annex A hereto.
"Stated Maturity," when used with respect to any Note or any installment
of principal thereof or interest thereon, means the date specified in such Note
as the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"Subordinated Indebtedness" means (a) with respect to the Notes, any
Indebtedness of the Company which is by its terms subordinated in right of
payment to the Notes and (b) with respect to any Subsidiary Guarantee, any
Indebtedness of the applicable Subsidiary Guarantor which is by its terms
subordinated in right of payment to such Subsidiary Guarantee.
"Subordinated Note Obligations" means any principal of, premium, if any,
and interest on the Notes payable pursuant to the terms of the Notes or upon
acceleration, redemption, repurchase or other acquisition thereof, together with
and including any amounts received upon the exercise of rights of rescission or
other rights of action (including claims for damages) or otherwise, to the
extent relating to the purchase price of the Notes or amounts corresponding to
such principal, premium, if any, or interest on the Notes.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) 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 thereof is at the time of determination owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof and (ii) any partnership,
joint venture, limited liability company or similar entity of which (x) more
than 50% of the
16
capital accounts, distribution rights, total equity and voting interests or
general or limited partnership interests, as applicable, are owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof whether in the form of
membership, general, special or limited partnership or otherwise and (y) such
Person or any Wholly Owned Restricted Subsidiary of such Person is a controlling
general partner or otherwise controls such entity.
"Subsidiary Guarantee" means any guarantee of the obligations of the
Company under this Indenture and the Notes by any Person in accordance with the
provisions of this Indenture pursuant to a supplemental indenture substantially
in the form attached hereto as Exhibit E.
"Subsidiary Guarantor" means any Person that incurs a Subsidiary
Guarantee; provided that upon the release and discharge of such Person from its
Subsidiary Guarantee in accordance with this Indenture, such Person shall cease
to be a Subsidiary Guarantor.
"Tax Sharing Agreement" means that certain tax sharing agreement between
and among the Company, KSL Recreation and each of the entities described on
Schedule A thereto, dated April 30, 1997, without giving effect to any amendment
subsequent thereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA.
"Total Assets" means (i) with respect to the Company, the total
consolidated assets of the Company and its Restricted Subsidiaries, as shown on
the most recent balance sheet of the Company; or (ii) with respect to any
Foreign Subsidiary, or any Restricted Subsidiary that is not a Foreign
Subsidiary, the total consolidated assets of such Foreign Subsidiary or
Restricted Subsidiary, as the case may be, and its Restricted Subsidiaries, as
shown on the most recent balance sheet of such Foreign Subsidiary or Restricted
Subsidiary, as applicable; provided, however, that, in the case of clauses (i)
and (ii), Total Assets shall not include the Specified Property.
"Total Net Debt" means at any date of determination, an amount equal to
(i) the aggregate amount of all Indebtedness of the Company and its Restricted
Subsidiaries outstanding as of the date of determination less (ii) the aggregate
of all unrestricted cash and Cash Equivalents of the Company and its Restricted
Subsidiaries as of such date.
"Trustee" means the party named as such above unless and until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor.
"Unrestricted Global Note" means a permanent global Note that contains
the paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Note attached hereto as Exhibit A-3, and that
is deposited with or on behalf of and registered in the name of the Depository.
"Unrestricted Definitive Note" means Notes that are in the form of the
Notes attached hereto as Exhibit A-3 that do not include the information called
for by footnotes 1 and 2 thereof.
"Unrestricted Notes" means the Unrestricted Global Notes and
Unrestricted Definitive Notes.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company which
at the time of determination is an Unrestricted Subsidiary (as designated by the
Board of Directors of the Company, as provided below) and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the
17
Company may designate any Subsidiary of the Company (including any existing
Subsidiary and any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Equity Interests of, or owns, or holds any Lien on, any property of, the
Company or any Subsidiary of the Company (other than any Subsidiary of the
Subsidiary to be so designated), provided that (a) any Unrestricted Subsidiary
must be an entity of which a majority of the voting power of the outstanding
Voting Stock is beneficially owned, directly or indirectly, by the Company, (b)
the Company certifies that such designation complies with Section 4.11 and (c)
each of (I) the Subsidiary to be so designated and (II) its Subsidiaries has not
at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness (x) pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries or (y) with respect
to which a default (including any rights that the holders thereof may have to
take enforcement action against such Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any Indebtedness of the Company or
any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity. Any such designation by the Board of Directors shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
Board Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and was
permitted by Section 4.11. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall 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 shall only be permitted if (i) such
Indebtedness is permitted under Section 4.12 calculated on a pro forma basis as
if such designation had occurred at the beginning of the four-quarter reference
period, and (ii) no Default or Event of Default would be in existence following
such designation.
"Voting Stock" means, with respect to any Person, any class or series of
capital stock of such Person that is ordinarily entitled to vote in the election
of directors thereof at a meeting of stockholders called for such purpose,
without the occurrence of any additional event or contingency.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness or Disqualified Stock, as the case may be, at any date, the
quotient obtained by dividing (i) the sum of the products of the number of years
from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock multiplied by the amount of such payment, by
(ii) the sum of all such payments.
"Wholly Owned Restricted Subsidiary" is any Wholly Owned Subsidiary that
is a Restricted Subsidiary.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person 100% of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person and one
or more Wholly Owned Subsidiaries of such Person.
18
Section 1.02. Other Definitions.
Term Defined in
Section
"Act"............................................................ 1.07
"Affiliate Transaction".......................................... 4.13
"Asset Sale Offer"............................................... 4.10
"Cedel Bank"..................................................... 2.01
"Covenant Defeasance"............................................ 8.03
"Defeasance"..................................................... 8.02
"DTC"............................................................ 2.03
"Euroclear"...................................................... 2.01
"Event of Default"............................................... 6.01
"Excluded Guarantee"............................................. 4.15
"Guaranteed Debt"................................................ 4.15
"Paying Agent"................................................... 2.03
"QIB"............................................................ 2.01
"Registrar"...................................................... 2.03
"Restricted Payments"............................................ 4.11
"Rule 144 A Global Notes"........................................ 2.01
"Successor Company".............................................. 5.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor
obligors upon the Notes.
All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them.
19
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time.
SECTION 1.05. COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion (other than the certificates required by
Section 4.05(a)) with respect to compliance with a condition or covenant
provided for in this Indenture shall comply with the provisions of TIA 314(e)
and shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each 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, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 1.06. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of,
20
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.07. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to TIA Section 315) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner that the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by a register kept by the
Registrar.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding TIA Section 316(c),
any such record date shall be the record date specified in or pursuant to such
Board Resolution, which shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than the
date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Notes then outstanding have
authorized or agreed or consented to
21
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for this purpose the Notes then outstanding shall be computed as of
such record date; provided that no such request, demand, authorization,
direction, notice, consent, waiver or other Act by the Holders on such recorded
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Note shall bind every future Holder of the
same Note or the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
in reliance thereon, whether or not notation of such action is made upon such
Note.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits X-0, X-0 and A-3 attached hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage, as designated by the Company or its counsel. Each Note
shall be dated the date of its authentication. The Notes shall be in
denominations of $1,000 and integral multiples thereof (subject to a minimum
initial purchase requirement of $250,000 for Notes sold to Accredited Investors
other than in reliance on Rule 144A or Regulation S).
The Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of a Rule 144A Global Note. Notes offered and sold to
Accredited Investors in transactions exempt from registration under the
Securities Act not made in reliance on Rule 144A or Regulation S shall be issued
initially in the form of Restricted Definitive Notes. Notes offered and sold in
reliance on Regulation S shall be issued initially in the form of the Regulation
S Temporary Global Note, which shall be deposited on behalf of the purchasers of
the Notes represented thereby with the Trustee, at its New York office, as
custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Cedel Bank, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The Restricted Period
shall be terminated upon the receipt by the Trustee of (i) a written certificate
from the Depository or the Note Custodian, together with copies of certificates
from Euroclear and Cedel Bank certifying that they have received certification
of non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Note, and (ii) an Officers'
Certificate from the Company to the effect set forth in Section 12.04(a) hereof.
Following the termination of the Restricted Period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Notes,
the Trustee shall cancel the Regulation S Temporary Global Note.
Notes issued in global form shall be substantially in the form of Exhibits
X-0, X-0 or A-3 attached hereto (including the Global Note Legend and the
"Schedule of Exchanges in the Global Note" attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A-1 or A-3
attached hereto (but without the Global Note Legend and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of
22
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Notes represented thereby shall be
made by the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
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 a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue up to the aggregate principal
amount stated in the Notes. The aggregate principal amount of Notes outstanding
at any time may not exceed such amount except as provided in Section 2.07
hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency where Notes may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar and the term "Paying
Agent" includes any additional paying agent. The Company may change any Paying
Agent or Registrar without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
23
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal,
premium, if any, or interest on the Notes, and will notify the Trustee of any
default by the Company in making any such payment. While any such default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
(if other than the Company or a Subsidiary) shall have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.05. 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
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee 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 the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depository to the Depository or to another nominee of the
Depository, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates identified by the Company or
its counsel to be required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depositary shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.10 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer described in the
Private Placement Legend to the extent
24
required by the Securities Act. Transfers of beneficial interests in the Global
Notes also shall require compliance with either subparagraph (i) or (ii) below,
as applicable, as well as one or more of the other following subparagraphs as
applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred only to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar
to effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests (other than a transfer of a beneficial interest in a Global Note
to a Person who takes delivery thereof in the form of a beneficial interest
in the same Global Note), the transferor of such beneficial interest must
deliver to the Registrar either (A) (1) a written order from an Agent
Member to the Depositary in accordance with the Applicable Procedures
directing the Depositary to credit or cause to be credited a beneficial
interest in another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing information regarding
the Agent Member account to be credited with such increase or (B) (1) a
written order from an Agent Member given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial interest to
be transferred or exchanged and (2) instructions given by the Depositary to
the Registrar containing information regarding the Person in whose name
such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above; provided that in no event shall Definitive Notes
be issued upon the transfer or exchange of beneficial interests in the
Regulation S Temporary Global Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
identified by the Company or its counsel to be required pursuant to Rule
903 under the Securities Act. Upon an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the
Registrar of the instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in the Restricted
Global Notes. Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in this
Indenture, the Notes and otherwise applicable under the Securities Act, the
Trustee shall adjust the principal amount of the relevant Global Note(s)
pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
25
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer, is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Notes issues in the Exchange Offer or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of a beneficial interest in
an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in item (4) thereof;
and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or
(D) above at a time when an Unrestricted Global Note has not yet been
issued, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall
authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to, Persons who take delivery thereof in the
form of a beneficial interest in a Restricted Global Note.
26
(c) Transfer or Exchange of Beneficial Interests in Global Notes for
Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the holder of such beneficial interest proposes to exchange
such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule
904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in
item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set
forth in Exhibit B hereto, including the certifications, certificates
and Opinion of Counsel required by item (3)(d) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Note to be reduced accordingly pursuant to Section
2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Restricted Definitive Note in the appropriate principal amount. Any
Restricted Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Agent Member.
The Trustee shall deliver such Restricted Definitive Notes to the Persons
in whose names such Notes are so registered. Any Restricted Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend
and shall be subject to all restrictions on transfer contained therein.
27
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
(A) exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definitive Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
holder of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, is not (1) a Broker-Dealer, (2)
a Person participating in the distribution of the Notes issued in the
Exchange Offer or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for an
Unrestricted Definitive Note, a certificate from such holder in the
form of Exhibit C hereto, including the certifications in item (1)(b)
thereof;
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person
who shall take delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company, to the
effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are not required in order to
maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note or to transfer such beneficial interest to a Person who
takes delivery thereof in the form of an Unrestricted Definitive Note,
then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii)
hereof, the Trustee shall cause the aggregate principal amount of the
applicable Unrestricted Global Note to be reduced accordingly pursuant to
Section 2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions an
Unrestricted Definitive Note in the appropriate principal amount. Any
Unrestricted Definitive Note issued in exchange for a beneficial
28
interest pursuant to this Section 2.06(c)(iv) shall be registered in such
name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Agent Member. The Trustee shall
deliver such Unrestricted Definitive Notes to the Persons in whose names
such Notes are so registered. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this section 2.06(c)(iv)
shall not bear the Private Placement Legend. A beneficial interest in an
Unrestricted Global Note cannot be exchanged for a Restricted Definitive
Note or transferred to a Person who takes delivery thereof in the form of a
Restricted Definitive Note.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests
in Global Note.
(i) If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to
transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Notes issued in the Exchange Offer or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
29
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes
to exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof;
(2) if the Holder of such Restricted Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit B hereto, including
the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Restricted Definitive
Notes are being exchanged or transferred in compliance with any
applicable blue sky securities laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Unrestricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or transfer, the
Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and registered in
the name of Persons who take delivery thereof if the Registrar receives the
following:
30
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive
Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Notes issued in the Exchange Offer or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes
to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof;
(2) if the Holder of such Restricted Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in
the form of an Unrestricted Definitive Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in
item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the
Securities Act, that the restrictions on transfer contained herein and
in the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and such Restricted Definitive Note
is being exchanged or transferred in compliance with any applicable
blue sky securities laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request for such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions
31
from the Holder thereof. Unrestricted Definitive Notes cannot be exchanged
for or transferred to Persons who take delivery thereof in the form of a
Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
are not (x) Broker-Dealers, (y) Persons participating in the distribution of the
Notes issued in the Exchange Offer or (z) Persons who are Affiliates (as defined
in Rule 144) of the Company and accepted for exchange in the Exchange Offer and
(ii) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer. Concurrent with the issuance of such Notes, the Trustee shall
cause the aggregate principal amount of the applicable Restricted Global Notes
to be reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the
following form:
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
32
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF
TRANSFER OF LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Unrestricted Global Note or
Unrestricted Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this
Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) shall not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE
TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE
MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF
THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE
AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE,
AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED
HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER
HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT
INTEREST FROM ACCRUING ON THIS NOTE."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
33
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee or by the Depositary at the direction of the Trustee, to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of a Company Order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.08, 4.09, 4.10 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration
of transfer or exchange of Global Notes or Definitive Notes shall be the
valid obligations of the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for redemption
under Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest
Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for
the purpose of receiving payment of principal of and interest on such Notes
and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a transfer or exchange may be submitted by facsimile.
34
SECTION 2.07.REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and the
Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's and the Company's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and shall
be entitled to all of the benefits of this Indenture equally and proportionately
with all other Notes duly issued hereunder.
SECTION 2.08.OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09.TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by an Affiliate of the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Trustee has been informed of by the Company as being so owned shall
be so disregarded.
SECTION 2.10.TEMPORARY NOTES.
Until permanent Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of permanent Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.
35
SECTION 2.11.CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and 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 all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12.DEFAULTED INTEREST.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date and interest on such defaulted
interest at the applicable interest rate borne by the Notes, to the extent
lawful (such defaulted interest (and interest thereon) herein collectively
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder; and
such Defaulted Interest shall be paid by the Company to the Persons in whose
names the Notes are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall give the Trustee at least 15 days' written
notice (unless a shorter period is acceptable to the Trustee for its
convenience) of the amount of Defaulted Interest proposed to be paid on each
Note 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 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 by the Trustee in
trust for the benefit of the Persons entitled to such Defaulted Interest as in
this subsection provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Registrar, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Default
Interest shall be paid to the Persons in whose names the Notes are registered at
the close of business on such Special Record Date.
Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company shall be made in
accordance with this Article 3.
36
SECTION 3.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section 3.08
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 45 but not more than 60
days prior to the Redemption Date fixed by it (unless a shorter notice period
shall be satisfactory to the Trustee for its convenience), notify the Trustee of
such Redemption Date and of the principal amount of Notes to be redeemed.
SECTION 3.03. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection of
such Notes for redemption or purchase, as the case may be, shall be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which such Notes are listed, or, if such Notes are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with applicable legal
requirements); provided that no Notes of $1,000 or less shall be redeemed in
part.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of 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 such Note which has been or is to be redeemed.
SECTION 3.04. NOTICE OF REDEMPTION.
Notices of redemption shall be mailed by first class mail, postage prepaid,
at least 30 but not more than 60 days before the Redemption Date to each Holder
of Notes to be redeemed at such Holder's registered address. If any Note is to
be redeemed in part only, any notice of redemption that relates to such Note
shall state the portion of the principal amount thereof that has been or is to
be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Notes then outstanding are to be redeemed, the
identification (and, in the case of a Note to be redeemed in part, the principal
amount) of the particular Notes to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on or after said date;
(e) the places or places where such Notes are to be surrendered for payment
of the Redemption Price;
(f) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
37
(g) the CUSIP number, if any, relating to such Notes, and
(h) in the case of a Note to be redeemed in part, the principal amount of
such Note to be redeemed and that after the Redemption Date upon surrender of
such Note, new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued.
Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company or, at its request, by the Trustee in the name and
at the expense of the Company.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its owning
Paying Agent, segregate and hold in trust as provided in Section 4.03) an amount
of money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and accrued interest on, all the Notes or portions thereof which are
to be redeemed on that date.
SECTION 3.06. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall by payable to the Holders of such Notes,
registered as such on the relevant Regular Record Dates according to the terms
and the provisions of Section 2.12.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the Redemption Date at the rate borne by
such Note.
SECTION 3.07. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered at the
office or agency of the Company maintained for such purpose pursuant to Section
4.02 (with, if the Company, the Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company, the Registrar or the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), and a new Note in principal amount
equal to the unpurchased or unredeemed portion will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the purchase
or redemption date, unless the Company defaults in payment of the purchase or
redemption price, interest shall cease to accrue on Notes or portions thereof
purchased or called for redemption.
SECTION 3.08. OPTIONAL REDEMPTION.
(a) Except as described in this Section 3.08, the Notes will not be
redeemable at the Company's option prior to May 1, 2002. On and after May 1,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued
38
and unpaid interest thereon, if any, to the applicable Redemption Date, if
redeemed during the twelve-month period beginning on May 1 of each of the years
indicated below:
Year Redemption
---- Price
-----
2002................................................................. 105.125%
2003................................................................. 103.417%
2004................................................................. 101.708%
2005 and thereafter.................................................. 100.000%
In addition, at any time or from time to time, on or prior to May 1,
2001, the Company may, at its option, redeem up to 50% of the aggregate
principal amount of Notes originally issued under this Indenture on the Issuance
Date at a Redemption Price equal to 110.25% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the Redemption
Date, with the net cash proceeds of one or more Equity Offerings; provided that
at least 50% of the aggregate principal amount of Notes originally issued under
this Indenture on the Issuance Date remains outstanding immediately after the
occurrence of such redemption; provided, further that such redemption occurs
within 60 days of the date of closing of each such Equity Offering.
(b) Any redemption pursuant to this Section 3.08 shall be made pursuant
to the provisions of Sections 3.01 through 3.07 hereof.
SECTION 3.09. MANDATORY REDEMPTION.
Except as set forth under Sections 3.10, 4.09 and 4.10 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
SECTION 3.10. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer.
If the Purchase Date is on or after a Regular Record Date and on or
before the related Interest Payment Date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such Regular Record Date, and no additional interest shall be
payable to Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
39
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.10 and Section 4.10 hereof and the length of time
the Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest after the Purchase
Date;
(e) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall 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 not later than the third Business
Day preceding the end of the Offer Period;
(f) that Holders shall 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 Business Day preceding
the end 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 Holder is withdrawing his
election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall
select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Company
so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred
by book-entry transfer).
On or before 12:00 p.m. (New York City time) on each Purchase Date, the
Company shall, irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued and
unpaid interest thereon to the Purchase Date, to be held for payment in
accordance with the terms of this Section 3.10. On the Purchase Date, the
Company shall, to the extent lawful, (i) 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, (ii) deliver or clause the Paying Agent or
depositary, as the case may be, to deliver to the Trustee Notes so accepted and
(iii) 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 3.10. The Company, the depositary or the Paying Agent, as
the case may be, shall promptly (but
40
in any case not later than three Business 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, plus any
accrued and unpaid interest, thereon to the Purchase Date, and the Company shall
promptly issue a new Note, and the Trustee, upon written request from the
Company shall authenticate and mail or deliver such new Note to such Holder,
equal in principal amount to 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 shall send a notice to each Holder a stating the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.07 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain, in The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. 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.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
recession 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 recession
and any change in the location of any such office or agency.
SECTION 4.03. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest
41
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes,
it will, on or before each due date of the principal of, premium, if any, or
interest on any Notes, deposit with a Paying Agent a sum in same day funds (or
New York Clearing House funds if such deposit is made prior to the date on which
such deposit is required to be made) sufficient to pay the principal, premium,
if any, or interest so becoming due (or at the option of the Company, payment of
interest may be mailed by check to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; provided that all
payments with respect to Global Notes and Definitive Notes, the holders of which
have given wire transfer instructions to the Company shall receive such payments
of interest by wire transfer in same day funds) such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of such action or any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of
the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of
principal, premium, if any, or interest;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and
obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Company cause
notice to be promptly sent to each Holder that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification any unclaimed balance of such money then remaining
will be repaid to the Company.
42
SECTION 4.04. REPORTS.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on
an annual and quarterly basis on forms provided for such annual and quarterly
reporting pursuant to rules and regulations promulgated by the SEC, the Company
shall file with the SEC (and provide the Trustee and Holders with copies
thereof, without cost to each Holder, within 15 days after it files them with
the SEC), (a) within 90 days after the end of each fiscal year, annual reports
on Form 10-K (or any successor or comparable form) containing the information
required to be contained therein (or required in such successor or comparable
form); (b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, reports on Form 10-Q (or any successor or
comparable form); (c) promptly from time to time after the occurrence of an
event required to be therein reported, such other reports on Form 8-K (or any
successor or comparable form); and (d) any other information, documents and
other reports which the Company would be required to file with the SEC if it
were subject to Section 13 or 15(d) of the Exchange Act; provided, however, the
Company shall not be so obligated to file such reports with the SEC if the SEC
does not permit such filing, in which event the Company shall make available
such information to prospective purchasers of Notes, in addition to providing
such information to the Trustee and the Holders, in each case within 15 days
after the time the Company would be required to file such information with the
SEC, if it were subject to Sections 13 or 15(d) of the Exchange Act. In
addition, the Company agrees that, for so long as any of the Notes remain
outstanding, it will furnish to holders and prospective purchasers of the Notes
the information required by Rule 144A(d)(4) under the Securities Act.
SECTION 4.05. STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Company will deliver to the Trustee, within 90 days after the
end of each fiscal year ending after the date hereof, a brief certificate of its
principal executive officer, principal financial officer or principal accounting
officer stating whether, to such officer's knowledge, the Company is in
compliance with all covenants and conditions to be complied with by it under
this Indenture (including with respect to any Restricted Payments made during
such year, the basis upon which the calculations required by this Section 4.07
were computed, which calculations may be based on the Company's latest financial
statements), and further stating, as to each Officer signing such certificate,
that to the best of his or her knowledge each entity is not in default in the
performance or observance of any terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto. For purposes of this Section 4.05, such compliance
shall be determined without regard to any period of grace or requirement of
notice under this Indenture.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual reports delivered
pursuant to Section 4.04(a) above shall be accompanied by a written statement of
the Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article
Four or Article Five hereof or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that such
accountants shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
43
(c) The Company shall, within five Business Days, upon becoming aware of
any Default or Event of Default or any default under any document, instrument or
agreement representing Indebtedness of the Company or any Subsidiary Guarantor,
deliver to the Trustee an Officer's Certificate specifying such Default or Event
of Default.
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any of its
Subsidiaries that could produce a material adverse effect on the consolidated
financial condition of the Company; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with GAAP.
SECTION 4.07. LIMITATION ON LIENS.
The Company shall not, directly or indirectly create, incur, assume or
suffer to exist any Lien that secures obligations under any Pari Passu
Indebtedness or Subordinated Indebtedness of the Company on any asset or
property of the Company or its Restricted Subsidiaries, or any income or profits
therefrom, or assign or convey any right to receive income therefrom, unless the
Notes are equally and ratably secured with the Pari Passu Indebtedness or
Subordinated Indebtedness so secured or until such time as such Pari Passu
Indebtedness or Subordinated Indebtedness is no longer secured by a Lien.
No Subsidiary Guarantor shall directly or indirectly create, incur,
assume or suffer to exist any Lien that secures obligations under any Pari Passu
Indebtedness or Subordinated Indebtedness of such Subsidiary Guarantor on any
asset or property of such Subsidiary Guarantor or its Restricted Subsidiaries or
any income or profits therefrom, or assign or convey any right to receive income
therefrom, unless the Subsidiary Guarantee of such Subsidiary Guarantor is
equally and ratably secured with the Pari Passu Indebtedness or Subordinated
Indebtedness so secured or until such time as such Pari Passu Indebtedness or
Subordinated Indebtedness is no longer secured by a Lien.
SECTION 4.08. CORPORATE EXISTENCE.
Subject to Article Five, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Subsidiary of the Company and the corporate rights
(charter and statutory), corporate licenses and corporate franchises of the
Company and its Subsidiaries, except where a failure to do so, singly or in the
aggregate, is not likely to have a materially adverse effect upon the business,
assets, financial conditions or results of operations of the Company and the
Subsidiaries taken as a whole determined on a consolidated basis in accordance
with GAAP; provided that prior to the occurrence and continuance of an Event of
Default, the Company shall not be required to preserve any such existence
(except of the Company), right, license or franchise if the Board of Directors
of the Company, or of the Subsidiary concerned, shall determine and deliver to
the Trustee an Officer's Certificate to the effect that the preservation thereof
is no longer desirable in the conduct of the business of the Company or such
Subsidiary and that the loss thereof is not disadvantageous in any material
respect to the Holders.
44
SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer to purchase all or any part (equal to $1,000 or an
integral multiple thereof) of the Notes pursuant to the offer
described below (the "Change of Control Offer") at a price in
cash (the "Change of Control Payment") equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase.
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder of Notes issued under this
Indenture, with a copy to the Trustee, with the following
statements and/or information:
(1) a Change of Control Offer is being made pursuant to this
Section 4.09 and that all Notes properly tendered pursuant
to such Change of Control Offer will be accepted for
payment;
(2) the purchase price and the purchase date, which will be no
earlier than 30 days nor later than 60 days from the date
such notice is mailed, except as may be otherwise required
by applicable law (the "Change of Control Payment Date");
(3) any Note not properly tendered will remain outstanding and
continue to accrue interest;
(4) 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 on the Change of Control Payment Date;
(5) 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 and 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) Holders will be entitled to withdraw their tendered Notes
and their election to require the Company to purchase such
Notes, provided that the paying agent receives, not later
than the close of business on the third 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 tendered
for purchase, and a statement that such Holder is
withdrawing his tendered Notes and his election to have
such 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 $1,000 in principal
amount or an integral multiple thereof.
(c) Prior to complying with the provisions of this Section 4.09, but
in any event within 30 days following a Change of Control, the
Company shall either repay all outstanding Senior Indebtedness,
or offer to repay in full all outstanding Senior Indebtedness and
repay the Senior Indebtedness with respect to which such offer
has been accepted, or
45
obtain the requisite consents, if any, under all outstanding
Senior Indebtedness to permit the repurchase of the Notes
required by this Section 4.09.
(d) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws or regulations are
applicable in connection with the repurchase of the Notes
pursuant to a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with
the provisions of this Indenture, the Company shall comply with
the applicable securities laws and regulations and will not be
deemed to have breached its obligations described in this
Indenture by virtue thereof.
(e) On the Change of Control Payment Date, the Company shall, to the
extent permitted by law, (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 aggregate Change of Control Payment in respect of all
Notes or portions thereof so tendered and (3) deliver, or cause
to be delivered, to the Trustee for cancellation the Notes so
accepted together with an Officers' Certificate stating that such
Notes or portions thereof have been tendered to and purchased by
the Company. The Paying Agent shall promptly mail to each Holder
of Notes the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail to each Holder a new
Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any; provided, that each such new Note will
be in a principal amount of $1,000 or an integral multiple
thereof. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(f) The Change of Control provisions described in this Section 4.09
will be applicable whether or not any other provisions of this
Indenture are applicable.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, cause, make or suffer to exist an Asset Sale, unless (x) the
Company, or its Restricted Subsidiaries, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the Company) of the assets or Equity
Interests issued or sold or otherwise disposed of and (y) at least 75% of the
proceeds from such Asset Sale when received consists of either (I) cash or Cash
Equivalents or (II) property or assets that are used or useful in a Similar
Business, or Capital Stock of any Person primarily engaged in a Similar Business
if, as a result of the acquisition by the Company or any Restricted Subsidiary
thereof, such Person becomes a Restricted Subsidiary; provided that the amount
of (1) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Notes or a Subsidiary Guarantee, if any) that are assumed by the transferee of
any such assets pursuant to an agreement that releases the Company or such
Restricted Subsidiary from further liability, (2) any notes or other obligations
received by the Company or any such Restricted Subsidiary from such transferee
that are converted by the Company or such Restricted Subsidiary into cash or
Cash Equivalents within 180 days after such Asset Sale (to the extent of the
cash or Cash Equivalents received) and (3) any Designated Noncash Consideration
received by the Company or any of its Restricted Subsidiaries in such Asset Sale
having an aggregate fair market value, taken together with all other Designated
Noncash Consideration received pursuant to this clause (3) that is at that time
outstanding, not to exceed 15% of the Company's Total Assets at the time of the
receipt of such Designated Noncash Consideration (with the fair market value of
each item of Designated Noncash Consideration being
46
measured at the time received and without giving effect to subsequent changes in
value), shall be deemed to be cash for the purposes of this provision.
Within 365 days after the Company's or any Restricted Subsidiary's
receipt of the Net Proceeds of any Asset Sale, the Company or such Restricted
Subsidiary may apply the Net Proceeds from such Asset Sale, at its option, (i)
to permanently reduce Obligations under the New Credit Facility, other Senior
Indebtedness or Guarantor Senior Indebtedness (and, in each case, to
correspondingly reduce commitments with respect thereto) or to permanently
reduce Pari Passu Indebtedness of the Company or any Subsidiary Guarantor
(provided that if the Company or such Subsidiary Guarantor shall so reduce
Obligations under Pari Passu Indebtedness, it will redeem Notes with an
aggregate principal amount equal to the proportion that the total aggregate
principal amount of Notes outstanding bears to the sum of the total aggregate
principal amount of Notes outstanding plus the total aggregate principal amount
outstanding of such Pari Passu Indebtedness, if the Notes are then redeemable
or, if the Notes may not be then redeemed, the Company shall make an offer (in
accordance with the procedures set forth below for an Asset Sale Offer) to
purchase at 100% of the principal amount thereof the amount of the Notes that
would otherwise be redeemed), (ii) to an investment in property, capital
expenditures or assets that are used or useful in a Similar Business, or Capital
Stock of any Person primarily engaged in a Similar Business if, as a result of
such acquisition by the Company or any Restricted Subsidiary, such Person
becomes a Restricted Subsidiary and/or (iii) to an investment in properties or
assets that replace the properties or assets that are the subject of such Asset
Sale. Pending the final application of any such Net Proceeds, the Company or
such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving
credit facility, if any, or otherwise invest such Net Proceeds in Cash
Equivalents or Investment Grade Securities. Any Net Proceeds from the Asset Sale
that are not invested as provided and within the time period set forth in the
first sentence of this paragraph will be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $15 million, the Company
shall make an offer to all Holders of Notes (an "Asset Sale Offer") to purchase
the maximum principal amount of Notes that is an integral multiple of $1,000
that may be purchased out of the Excess Proceeds at an offer price in cash equal
to 100% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date fixed for the closing of such offer, in accordance with the
procedures set forth in Section 3.10 hereof. The Company will commence an Asset
Sale Offer with respect to Excess Proceeds within ten Business Days after the
date that Excess Proceeds exceeds $15 million by mailing the notice required
pursuant to the terms of this Indenture, with a copy to the Trustee. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. Upon completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions
of any securities laws or regulations conflict with the provisions of this
Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests, including any dividend or distribution payable
in connection with any merger or consolidation (other than (A) dividends or
distributions by the Company payable in Equity Interests (other than
Disqualified Stock) of the Company or (B) dividends or distributions by a
47
Restricted Subsidiary so long as, in the case of any dividend or distribution
payable on or in respect of any class or series of equity securities issued by a
Subsidiary other than a Wholly Owned Restricted Subsidiary, the Company or a
Restricted Subsidiary receives at least its pro rata share of such dividend or
distribution in accordance with its Equity Interests in such class or series of
equity securities); (ii) purchase, redeem, defease or otherwise acquire or
retire for value any Equity Interests of the Company; (iii) make any principal
payment on, or redeem, repurchase, defease or otherwise acquire or retire for
value in each case, prior to any scheduled repayment, or maturity, any
Subordinated Indebtedness; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "Restricted Payments"), unless, at the time of such
Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(b) immediately before and immediately after giving effect to such
transaction on a pro forma basis, the Company could incur $1.00
of additional Indebtedness under the provisions of the first
paragraph of Section 4.12; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issuance Date (including Restricted
Payments permitted by clauses (i), (ii) (with respect to the
payment of dividends on Refunding Capital Stock pursuant to
clause (b) thereof), (iv) (only to the extent that amounts paid
pursuant to such clause are greater than amounts that would have
been paid pursuant to such clause if $5 million and $10 million
were substituted in such clause for $10 million and $20 million,
respectively), (vi) and (ix) of the next succeeding paragraph,
but excluding all other Restricted Payments permitted by the next
succeeding paragraph), is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as
one accounting period) from the fiscal quarter that first begins
after the Issuance Date to the end of the Company's most recently
ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, in the case
such Consolidated Net Income for such period is a deficit, minus
100% of such deficit), plus (ii) 100% of the aggregate net cash
proceeds and the fair market value, as determined in good faith
by the Board of Directors, of marketable securities received by
the Company since the Issuance Date from the issue or sale of
Equity Interests of the Company (including Retired Capital Stock
(as defined below)) or debt securities of the Company that have
been converted into such Equity Interests of the Company (other
than, in each case, Refunding Capital Stock (as defined below),
Equity Interests or convertible debt securities of the Company
sold to a Restricted Subsidiary, Disqualified Stock, debt
securities that have been converted into Disqualified Stock,
Designated Preferred Stock and Equity Interests of the Company
issued to members of management, directors or consultants of the
Company and its Subsidiaries after the Issuance Date to the
extent such amounts have been applied to Restricted Payments in
accordance with clause (iv) of the next succeeding paragraph),
plus (iii) 100% of the aggregate amount of cash and marketable
securities contributed to the capital of the Company following
the Issuance Date (excluding Excluded Contributions), plus (iv)
100% of the aggregate amount received in cash and the fair market
value of marketable securities (other than Restricted
Investments) received since the Issuance Date from (A) the sale
or other disposition (other than to the Company or a Restricted
Subsidiary) of Restricted Investments made by the Company and its
Restricted Subsidiaries (other than Restricted Investments in an
Unrestricted Subsidiary the Investment in which was
48
made by the Company or a Restricted Subsidiary pursuant to clause
(vii) below) or (B) a dividend from, or the sale (other than to
the Company or a Restricted Subsidiary) of the stock of, an
Unrestricted Subsidiary (other than an Unrestricted Subsidiary
the Investment in which was made by the Company or a Restricted
Subsidiary pursuant to clause (vii) below).
The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment
would have complied with the provisions of this Indenture:
(ii) (a) the redemption, repurchase, retirement or other acquisition
of any Equity Interests of the Company (the "Retired Capital
Stock") or Subordinated Indebtedness of the Company in exchange
for, or out of the proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary) of, Equity Interests of
the Company (other than any Disqualified Stock) (the "Refunding
Capital Stock"), and (b) if immediately prior to the retirement
of Retired Capital Stock, the declaration and payment of
dividends thereon was permitted under clause (vi) of this
paragraph, the declaration and payment of dividends on the
Refunding Capital Stock in an aggregate amount per year no
greater than the aggregate amount of dividends per annum that was
declarable and payable on such Retired Capital Stock immediately
prior to such retirement; provided, however, that at the time of
the declaration of any such dividends, no Default or Event of
Default shall have occurred and be continuing or would occur as a
consequence thereof;
(iii) the redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness made by exchange for, or out of the
proceeds of the substantially concurrent sale of, new
Indebtedness of the Company or the Restricted Subsidiary that is
the obligor with respect to the Subordinated Indebtedness being
redeemed, repurchased or otherwise acquired or retired so long as
(A) the principal amount of such new Indebtedness does not exceed
the principal amount of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired for value (plus the
amount of any premium required to be paid under the terms of the
instrument governing the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired), (B) such
Indebtedness is subordinated to Senior Indebtedness and/or
Guarantor Senior Indebtedness, if any, the Notes and/or the
Subsidiary Guarantees, if any, at least to the same extent as
such Subordinated Indebtedness so purchased, exchanged, redeemed,
repurchased, acquired or retired for value, (C) such Indebtedness
has a final scheduled maturity date equal to or later than the
final scheduled maturity date of the Subordinated Indebtedness
being so redeemed, repurchased, acquired or retired and (D) such
Indebtedness has a Weighted Average Life to Maturity equal to or
greater than the remaining Weighted Average Life to Maturity of
the Subordinated Indebtedness being so redeemed, repurchased,
acquired or retired;
(iv) a Restricted Payment to KSL Recreation, which Restricted Payment
is applied solely to pay for the repurchase, retirement or other
acquisition or retirement for value of common Equity Interests of
KSL Recreation held by any future, present or former employee,
director or consultant of the Company or any of the Company's
Subsidiaries pursuant to any management equity plan or stock
option plan or any other management or employee benefit plan or
agreement; provided, however, that the aggregate Restricted
Payments made under this clause (iv) does not exceed in any
calendar year $10 million (with unused
49
amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum (without giving effect to the
following proviso) of $20 million in any calendar year);
provided, further, that such amount in any calendar year may be
increased by an amount not to exceed (i) the cash proceeds
received by the Company from the sale of Equity Interests of KSL
Recreation to members of management, directors or consultants of
the Company and its Restricted Subsidiaries that occurs after the
Issuance Date (to the extent the cash proceeds from the sale of
such Equity Interest have not otherwise been applied to the
payment of Restricted Payments by virtue of the preceding
paragraph (c)) plus (ii) the cash proceeds of key man life
insurance policies received by the Company and its Restricted
Subsidiaries after the Issuance Date less (iii) the amount of any
Restricted Payments previously made pursuant to clauses (i) and
(ii) of this subparagraph (iv); and provided, further, that
cancellation of Indebtedness owing to the Company from members of
management of Company or any of its Restricted Subsidiaries in
connection with a repurchase of Equity Interests of KSL
Recreation shall not be deemed to constitute a Restricted Payment
for purposes of this covenant or any other provision of this
Indenture;
(v) the declaration and payment of dividends to holders of any class
or series of Disqualified Stock of the Company issued in
accordance with Section 4.12;
(vi) the declaration and payment of dividends to holders of any class
or series of Designated Preferred Stock (other than Disqualified
Stock) issued after the Issuance Date (including, without
limitation, the declaration and payment of dividends on Refunding
Capital Stock in excess of the dividends declarable and payable
thereon pursuant to clause (ii)); provided, however, that for the
most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date
of issuance of such Designated Preferred Stock, after giving
effect to such issuance on a pro forma basis, the Company and its
Restricted Subsidiaries would have had a Fixed Charge Coverage
Ratio of at least 1.5 to 1.00;
(vii) investments in Unrestricted Subsidiaries having an aggregate fair
market value, taken together with all other Investments made
pursuant to this clause (vii) that are at that time outstanding,
not to exceed the greater of (A) $25 million and (B) 5% of the
Company's Total Assets at the time of such Investment (with the
fair market value of each Investment being measured at the time
made and without giving effect to subsequent changes in value);
(viii) repurchases of Equity Interests deemed to occur upon exercise of
stock options if such Equity Interests represent a portion of the
exercise price of such options;
(ix) the payment of dividends on the Company's Common Stock, following
the first public offering of the Company's Common Stock after the
Issuance Date, of up to 6% per annum of the net proceeds received
by the Company in such public offering, other than public
offerings with respect to the Company's Common Stock registered
on Form S-8 or Form S-4;
(x) (a) Restricted Payments made pursuant to the Concurrent
Transactions and the Refinancings and (b) the dividend to KSL
Recreation of the Specified Property; provided, however that
immediately prior to a dividend of a Specified Property, the use
of such
50
Specified Property shall be substantially similar to the use of
such Specified Property by the Company and/or the Restricted
Subsidiaries on the Issuance Date;
(xi) Investments in Unrestricted Subsidiaries or Joint Ventures that
are made with Excluded Contributions;
(xii) payments to KSL Recreation, whether in the form of dividends, the
making of loans or advances or otherwise, for expenses incurred
by KSL Recreation in its capacity as a holding company that are
directly attributable to the operations of the Company and its
Restricted Subsidiaries, including, without limitation, (a)
customary salary, bonus and other benefits payable to officers
and employees of KSL Recreation, (b) fees and expenses paid to
members of the Board of Directors of KSL Recreation, (c) general
corporate overhead expenses of KSL Recreation, (d) foreign,
federal, state or local tax liabilities paid by KSL Recreation
and (e) management, consulting or advisory fees paid by KSL
Recreation to KKR; provided, however, that federal and California
state income tax liabilities shall only be reimbursed pursuant to
the Tax Sharing Agreement or on substantially the same terms as
set forth in the Tax Sharing Agreement;
(xiii) a Corporate Sale Transaction on only one occasion; provided that
immediately after giving effect to such transaction, the
Company's ratio of Total Net Debt to Pro Forma Consolidated Cash
Flow for the four quarters immediately preceding such transaction
is equal to or less than immediately prior to such transaction;
(xiv) a dividend of the KSL Land Note to KSL Recreation; and
(xv) other Restricted Payments in an aggregate amount not to exceed
the greater of (A) $25 million and (B) 5% of the Company's Total
Assets at the time of such Restricted Payment;
provided, however, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x)(b), (xi), (xii), (xiii) and (xv), no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof; and provided, further, that for purposes of determining the aggregate
amount expended for Restricted Payments in accordance with clause (c) of the
immediately preceding paragraph, only the amounts expended under clauses (i),
(ii) (with respect to the payment of dividends on Refunding Capital Stock
pursuant to clause (b) thereof), (iv) (only to the extent that amounts paid
pursuant to such clause are greater than amounts that would have been paid
pursuant to such clause if $5 million and $10 million were substituted in such
clause for $10 million and $20 million, respectively), (vi) and (ix) shall be
included.
For purposes of designating any Restricted Subsidiary as an Unrestricted
Subsidiary, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash) in the Subsidiary so
designated shall be deemed to be Restricted Payments in an amount determined as
set forth in the last sentence of the definition of "Investments." Such
designation shall only be permitted if a Restricted Payment in such amount and
of such nature would be permitted pursuant to the first or second paragraph of
this Section 4.11 at such time and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
51
SECTION 4.12. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
PREFERRED STOCK.
(a)(i) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to (collectively,
"incur") any Indebtedness (including Acquired Indebtedness), (ii) the Company
and the Subsidiary Guarantors, if any, shall not issue any Disqualified Stock
and (iii) the Company shall not permit any of its Restricted Subsidiaries that
are not Subsidiary Guarantors, if any, to issue any shares of preferred stock;
provided, however, that the Company and the Subsidiary Guarantors, if any, may
incur Indebtedness (including Acquired Indebtedness) or issue shares of
Disqualified Stock if the ratio of Total Net Debt to Pro Forma Consolidated Cash
Flow for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been no greater than 6.75 to 1 determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom).
(b) The limitations set forth in section (a) above shall not apply
to:
(i) the incurrence by the Company and the Subsidiary Guarantors, if
any, of Indebtedness under the New Credit Facility and the
issuance and creation of letters of credit and banker's
acceptances thereunder (with letters of credit and banker's
acceptances being deemed to have a principal amount equal to the
face amount thereof) up to an aggregate principal amount of $300
million outstanding at any one time;
(ii) the incurrence by the Company of Indebtedness represented by the
Notes;
(iii) Existing Indebtedness (other than Indebtedness described in
clauses (b)(i) and (b)(ii)) of this Section 4.12;
(iv) Indebtedness (including Capitalized Lease Obligations) incurred
by the Company or any of its Restricted Subsidiaries to finance
the purchase, lease or improvement of property (real or personal)
or equipment (whether through the direct purchase of assets or
the Capital Stock of any Person owning such assets) in an
aggregate principal amount which, when aggregated with the
principal amount of all other Indebtedness then outstanding and
incurred pursuant to this clause (iv) (together with any
Refinancing Indebtedness with respect thereto), does not exceed
15% of the Company's Total Assets;
(v) Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect
to letters of credit issued in the ordinary course of business,
including without limitation letters of credit in respect of
workers' compensation claims or self-insurance, or other
Indebtedness with respect to reimbursement type obligations
regarding workers' compensation claims; provided, however, that
upon the drawing of such letters of credit or the incurrence of
such Indebtedness, such obligations are reimbursed within 30 days
following such drawing or incurrence;
(vi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment
of purchase price or similar obligations, in each case, incurred
or assumed in connection with the disposition of any business,
assets or a Subsidiary, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing
such
52
acquisition; provided, however, that (1) such Indebtedness is not
reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance
sheet will not be deemed to be reflected on such balance sheet
for purposes of this clause (vi)) and (2) the maximum assumable
liability in respect of all such Indebtedness shall at no time
exceed the gross proceeds including noncash proceeds (the fair
market value of such noncash proceeds being measured at the time
received and without giving effect to any subsequent changes in
value) actually received by the Company and its Restricted
Subsidiaries in connection with such disposition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided
that any such Indebtedness is made pursuant to an intercompany
note and is subordinated in right of payment to the Notes;
provided, further, that any subsequent issuance or transfer of
any Capital Stock or any other event which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary or
any subsequent transfer of any such Indebtedness (except to the
Company or another Restricted Subsidiary) shall be deemed, in
each case to be an incurrence of such Indebtedness;
(viii) Indebtedness of a Restricted Subsidiary to the Company or another
Restricted Subsidiary; provided that (1) any such Indebtedness is
made pursuant to an intercompany note and (2) if a Subsidiary
Guarantor incurs such Indebtedness to a Restricted Subsidiary
that is not a Subsidiary Guarantor, such Indebtedness is
subordinated in right of payment to the Subsidiary Guarantee of
such Subsidiary Guarantor; provided, further, that any subsequent
issuance or transfer of any Capital Stock of any Restricted
Subsidiary to whom such Indebtedness is owed or any other event
which results in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or another Restricted
Subsidiary) shall be deemed, in each case to be an incurrence of
such Indebtedness;
(ix) Hedging Obligations that are incurred in the ordinary course of
business (1) for the purpose of fixing or hedging interest rate
risk with respect to any Indebtedness that is permitted by the
terms of this Indenture to be outstanding or (2) for the purpose
of fixing or hedging currency exchange rate risk with respect to
any currency exchanges; provided that such agreements do not
increase the Indebtedness of the obligor outstanding at any time
other than as a result of fluctuations in foreign currency
exchange rates or interest rates or by reason of fees,
indemnities and compensation payable thereunder
(x) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(xi) Indebtedness of a Subsidiary Guarantor, if any, in respect of
such Subsidiary Guarantor's Subsidiary Guarantee;
(xii) Indebtedness of the Company and any of its Restricted
Subsidiaries not otherwise permitted hereunder in an aggregate
principal amount, which when aggregated with the principal amount
of all other Indebtedness then outstanding and incurred pursuant
to this clause (xii), does not exceed the greater of (1) $75
million and (2) 10% of the Company's Total Assets at the time of
such incurrence; provided, however, that (A) Indebtedness of
Foreign Subsidiaries which, when aggregated with the principal
amount of all other Indebtedness of Foreign Subsidiaries then
outstanding and incurred pursuant to this clause
53
(xii), shall not exceed the greater of (1) $37.5 million (or the
equivalent thereof in any other currency) and (2) 5% of the
Company's Total Assets at the time of such incurrence, provided,
further, that, with respect to any such Foreign Subsidiary, the
aggregate amount of such Indebtedness, together with all other
Indebtedness of such Foreign Subsidiary incurred pursuant to this
clause (xii), shall not exceed 15% of the Total Assets of such
Foreign Subsidiary at the time of such incurrence by such Foreign
Subsidiary and (B) Indebtedness of Restricted Subsidiaries that
are not Foreign Subsidiaries which, when aggregated with the
principal amount of all other indebtedness of Restricted
Subsidiaries that are not Foreign Subsidiaries then outstanding
and incurred pursuant to this clause (xii), shall not exceed the
greater of (1) $37.5 million and (2) 5% of the Company's Total
Assets at the time of such incurrence; provided, further, that
with respect to any such Restricted Subsidiary that is not a
Foreign Subsidiary, the aggregate amount of such Indebtedness,
together with all other Indebtedness of such Restricted
Subsidiary incurred pursuant to this clause (xii), shall not
exceed 15% of the Total Assets of such Restricted Subsidiary at
the time of such incurrence.
(xiii) any guarantee by the Company of Indebtedness or other obligations
of any of its Restricted Subsidiaries so long as the incurrence
of such Indebtedness incurred by such Restricted Subsidiary is
permitted under the terms of this Indenture and any Excluded
Guarantee of a Restricted Subsidiary;
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness which serves to refund, refinance or
restructure any Indebtedness incurred as permitted under the
first paragraph of this Section 4.12 and clauses (ii) and (iii)
above, or any Indebtedness issued to so refund, refinance or
restructure such Indebtedness including additional Indebtedness
incurred to pay premiums and fees in connection therewith (the
"Refinancing Indebtedness") prior to its respective maturity;
provided, however, that such Refinancing Indebtedness (1) has a
Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred which is not less than the remaining
Weighted Average Life to Maturity of Indebtedness being refunded
or refinanced, (2) to the extent such Refinancing Indebtedness
refinances Indebtedness subordinated or pari passu to the Notes
or any Subsidiary Guarantee, such Refinancing Indebtedness is
subordinated or pari passu to the Notes and/or the Subsidiary
Guarantees at least to the same extent as the Indebtedness being
refinanced or refunded and (3) shall not include (x) Indebtedness
of a Restricted Subsidiary that is not a Subsidiary Guarantor
that refinances Indebtedness of the Company or a Subsidiary
Guarantor or (y) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary; and provided, further, that subclauses (1) and (2) of
this clause (xiv) will not apply to any refunding or refinancing
of any Senior Indebtedness or Guarantor Senior Indebtedness;
(xv) Indebtedness or preferred stock of Persons that are acquired by
the Company or any of its Restricted Subsidiaries or merged into
a Restricted Subsidiary in accordance with the terms of this
Indenture; provided that such Indebtedness or preferred stock is
not incurred in contemplation of such acquisition or merger; and
provided, further, that after giving effect to such acquisition,
either (1) the Company would be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Total Net Debt to Pro
Forma Consolidated Cash Flow test set forth in the first sentence
of this Section 4.12 or (2) the Company's ratio of Total Net Debt
to Pro Forma Consolidated Cash Flow is no greater than
immediately prior to such acquisition.
54
(c) The Company may, at its option, cause any Restricted Subsidiary
to execute and deliver a Subsidiary Guarantee.
SECTION 4.13. TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction") involving aggregate consideration in excess of $5 million per
Affiliate Transaction, unless:
(a) such Affiliate Transaction is on terms that are not materially
less favorable to the Company or the relevant 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
(b) the Company delivers to the Trustee with respect to any Affiliate
Transaction involving aggregate payments in excess of $10
million, a resolution adopted by a majority of the Board of
Directors approving such Affiliate Transaction and set forth in
an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above.
The foregoing provisions will not apply to the following:
(i) transactions between or among the Company and/or any of its
Restricted Subsidiaries;
(ii) Restricted Payments permitted by Section 4.11;
(iii) the payment of customary annual management, consulting and
advisory fees and related expenses to KKR and its Affiliates;
(iv) the payment of reasonable and customary fees paid to, and
indemnity provided on behalf of, officers, directors, employees
or consultants of the Company or any Restricted Subsidiary;
(v) payments by the Company or any of its Restricted Subsidiaries to
KKR and its Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of
other investment banking activities, including, without
limitation, in connection with acquisitions or divestitures which
payments are approved by a majority of the Board of Directors of
the Company in good faith;
(vi) transactions in which the Company or any of its Restricted
Subsidiaries, as the case may be, delivers to the Trustee a
letter from an Independent Financial Advisor stating that such
transaction is fair to the Company or such Restricted Subsidiary
from a financial point of view or meets the requirements of
clause (a) of the preceding paragraph;
(vii) payments or loans to employees or consultants which are approved
by a majority of the Board of Directors of the Company in good
faith;
(viii) any agreement as in effect as of the Issuance Date or any
amendment thereto (so long as any such amendment is not, in the
reasonable determination of a majority of the members
55
of the Board of Directors, disadvantageous to the holders of the
Notes in any material respect) or any transaction contemplated
thereby;
(ix) the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of,
any stockholders agreement (including any registration rights
agreement or purchase agreement related thereto) to which it is a
party as of the Issuance Date and any similar agreements which it
may enter into thereafter; provided, however, that the existence
of, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under any future amendment to any
such existing agreement or under any similar agreement entered
into after the Issuance Date shall only be permitted by this
clause (ix) to the extent that the terms of any such amendment or
new agreement are not otherwise disadvantageous to the holders of
the Notes in any material respect;
(x) the payment of all fees and expenses related to the Refinancings
as disclosed in the Offering Memorandum; and
(xi) transactions with customers, clients, suppliers, or purchasers or
sellers of goods or services, in each case in the ordinary course
of business and otherwise in compliance with the terms of this
Indenture which are fair to the Company or its Restricted
Subsidiaries, in the reasonable determination of a majority of
the members of the Board of Directors of the Company or the
senior management thereof, or are on terms at least as favorable
as might reasonably have been obtained at such time from an
unaffiliated party, in the reasonable determination of a majority
of the members of the Board of Directors.
SECTION 4.14. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause to become
effective any consensual encumbrance or consensual restriction on the ability of
any such Restricted Subsidiary to:
(a) (i)pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries on its Capital Stock or any
other interest or participation in, or measured by, its profits
or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(b) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries; except (in each
case) for such encumbrances or restrictions existing under or by
reason of:
(1) contractual encumbrances or restrictions in effect on the
Issuance Date, including pursuant to the New Credit Facility and
its related documentation;
(2) this Indenture and the Notes;
56
(3) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature
discussed in clause (c) of this Section 4.14 on the property so
acquired;
(4) applicable law or any applicable rule, regulation or order;
(5) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof),
which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person,
or the property or assets of the Person, so acquired;
(6) contracts for the sale of assets, including, without limitation
customary restrictions with respect to a Subsidiary pursuant to
an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary;
(7) secured Indebtedness otherwise permitted to be incurred pursuant
to Sections 4.07 and 4.12 that limit the right of the debtor to
dispose of the assets securing such Indebtedness;
(8) restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of
business;
(9) other Indebtedness of Foreign Subsidiaries permitted to be
incurred subsequent to the Issuance Date pursuant to Section
4.12;
(10) customary provisions in joint venture agreements at the time of
creation of such joint venture and other similar agreements
entered into in the ordinary course of business;
(11) customary provisions contained in leases and other agreements
entered into in the ordinary course of business; and
(12) any encumbrances or restrictions of the type referred to in
clauses (a), (b) and (c) above imposed by any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (1) through
(11) above, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of
the Company's Board of Directors, no more restrictive with
respect to such dividend and other payment restrictions than
those contained in the dividend or other payment restrictions
prior to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.
SECTION 4.15. LIMITATIONS ON GUARANTEES OF INDEBTEDNESS BY RESTRICTED
SUBSIDIARIES
(a) The Company shall not permit any Restricted Subsidiary to
guarantee the payment of any Indebtedness of the Company or any
Indebtedness of any other Restricted Subsidiary (in each case,
the "Guaranteed Debt") unless:
(i) if such Restricted Subsidiary is not a Subsidiary
Guarantor, such Restricted Subsidiary simultaneously
executes and delivers a Subsidiary Guarantee (pursuant
57
to a supplemental indenture (the "Supplemental
Indenture"), substantially in the form of Exhibit E
hereto) of payment of the Notes by such Restricted
Subsidiary;
(ii) if the Notes or the Subsidiary Guarantee (if any) of such
Restricted Subsidiary that is the debtor with respect to
the Guaranteed Debt is subordinated in right of payment to
the Guaranteed Debt, the Subsidiary Guarantee under the
Supplemental Indenture shall be subordinated to such
Restricted Subsidiary's guarantee with respect to the
Guaranteed Debt substantially to the same extent as the
Notes or the Subsidiary Guarantee are subordinated to the
Guaranteed Debt under this Indenture;
(iii) if the Guaranteed Debt is by its express terms
subordinated in right of payment to the Notes or the
Subsidiary Guarantee (if any) of such Restricted
Subsidiary, any such guarantee of such Restricted
Subsidiary with respect to the Guaranteed Debt shall be
subordinated in right of payment to such Restricted
Subsidiary's Subsidiary Guarantee with respect to the
Notes substantially to the same extent as the Guaranteed
Debt is subordinated to the Notes or the Subsidiary
Guarantee (if any) of such Restricted Subsidiary; and
(iv) such Restricted Subsidiary shall deliver to the Trustee an
opinion of counsel to the effect that (A) such Subsidiary
Guarantee of the Notes has been duly executed and
authorized and (B) such Subsidiary Guarantee of the Notes
constitutes a valid, binding and enforceable obligation of
such Restricted Subsidiary, except insofar as enforcement
thereof may be limited by bankruptcy, insolvency or
similar laws (including, without limitation, all laws
relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of
equity;
provided that this paragraph (a) shall not be applicable to any guarantee of any
Restricted Subsidiary (x) that (A) existed at the time such Person became a
Restricted Subsidiary of the Company and (B) was not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary of
the Company and (y) that guarantees the payment of Obligations of the Company or
any Restricted Subsidiary under the New Credit Facility or any other bank
facility which is designated as Senior Indebtedness and any refunding,
refinancing or replacement thereof, in whole or in part, provided that such
refunding, refinancing or replacement thereof constitutes Senior Indebtedness
and is not incurred pursuant to a registered offering of securities under the
Securities Act or a private placement of securities (including under Rule 144A)
pursuant to an exemption from the registration requirements of the Securities
Act, which private placement provides for registration rights under the
Securities Act (any guarantee excluded by operations of this clause (y) being an
"Excluded Guarantee").
SECTION 4.16 LIMITATION ON OTHER SENIOR SUBORDINATED INDEBTEDNESS.
The Company shall not, and shall not permit any Subsidiary Guarantor to,
directly or indirectly, incur any Indebtedness (including Acquired Indebtedness)
that is subordinate in right of payment to any Indebtedness of the Company or
any Indebtedness of any Subsidiary Guarantor, as the case may be, unless such
Indebtedness is either (a) pari passu in right of payment with the Notes or such
Subsidiary Guarantor's Subsidiary Guarantee, as the case may be, or (b)
subordinate in right of payment to the Notes, or such Subsidiary Guarantor's
Subsidiary Guarantee, as the case may be, in the same manner and at least to the
same extent as the Notes are subordinate to Senior Indebtedness or such
Subsidiary Guarantor's
58
Subsidiary Guarantee is subordinate to such Subsidiary Guarantor's Guarantor
Senior Indebtedness, as the case may be.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ALL OR SUBSTANTIALLY
ALL ASSETS
The Company shall not consolidate or merge with or into or wind up into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, any Person unless:
(i) the Company is the surviving corporation or the Person formed by
or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a
corporation organized or existing under the laws of the United
States, any state thereof, the District of Columbia, or any
territory thereof (the Company or such Person, as the case may
be, being herein called the "Successor Company");
(ii) the Successor Company (if other than the Company) expressly
assumes all the obligations of the Company under this Indenture
and the Notes pursuant to a supplemental indenture or other
documents or instruments in form reasonably satisfactory to the
Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists;
(iv) immediately after giving pro forma effect to such transaction, as
if such transaction had occurred at the beginning of the
applicable four-quarter period, (A) the Successor Company would
be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Total Net Debt to Pro Forma Consolidated Cash
Flow test set forth in the first sentence of Section 4.12 or (B)
the ratio of Total Net Debt to Pro Forma Consolidated Cash Flow
for the Successor Company and its Restricted Subsidiaries would
be no greater than such ratio for the Company and its Restricted
Subsidiaries immediately prior to such transaction;
(v) each Subsidiary Guarantor, if any, unless it is the other party
to the transactions described above, shall have by supplemental
indenture confirmed that its Subsidiary Guarantee shall apply to
such Person's obligations under this Indenture and the Notes; and
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
(if any) comply with this Indenture.
Notwithstanding clause (iv) of this Section 5.01, (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (b) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another State of the United States so long as the amount of Indebtedness of the
Company and its Restricted Subsidiaries is not increased thereby.
59
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any sale, assignment, transfer,
lease or conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01, the Successor Company
will succeed to, and be substituted for, the Company under this Indenture and
the Notes; provided that solely for the purposes of computing Consolidated Net
Income for purposes of clause (c) of the first paragraph of Section 4.11 hereof,
the Consolidated Net Income of any person other than the Company and its
Restricted Subsidiaries shall be included only for periods subsequent to the
effective time of such consolidation or merger, sale, assignment, transfer,
lease or conveyance or other disposition of assets.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT AND NOTICE THEREOF.
Each of the following constitutes an "Event of Default":
(a) default in payment when due and payable, upon redemption,
acceleration or otherwise, of principal of, or premium, if any,
on the Notes (whether or not such payment shall be prohibited by
Article 10 hereof or any Subsidiary Guarantee);
(b) default for 30 days or more in the payment when due of interest
on or with respect to the Notes whether or not such payment shall
be prohibited by Article 10 hereof or any Subsidiary Guarantee;
(c) failure by the Company or a Subsidiary Guarantor, if any, for 30
days after receipt of written notice given by the Trustee or the
holders of at least 30% in principal amount of the Notes then
outstanding to comply with any of its other agreements in this
Indenture, the Notes or the Subsidiary Guarantees, if any;
(d) default under any mortgage, indenture or instrument under which
there is issued or by which there is secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries (other than
Indebtedness owed to the Company or a Restricted Subsidiary),
whether such Indebtedness or guarantee now exists or is created
after the Issuance Date, if both (A) such default either (1)
results from the failure to pay any such Indebtedness at its
stated final maturity (after giving effect to any applicable
grace periods) or (2) relates to an obligation other than the
obligation to pay principal of any such Indebtedness at its
stated final maturity and results in the holder or holders of
such Indebtedness causing such Indebtedness to become due prior
to its stated final maturity and (B) the principal amount of such
Indebtedness, together with the principal amount of any other
such Indebtedness in default for failure to pay principal at
stated final maturity (after giving effect to any applicable
grace periods), or the maturity of which has been so accelerated,
aggregate $15 million or more at any one time outstanding;
(e) failure by the Company or any of its Significant Subsidiaries to
pay final non-appealable judgments aggregating in excess of $15
million, which final non-appealable judgments remain unpaid,
undischarged and unstayed for a period of more than 60 days after
such
60
judgment becomes final, and in the event such judgment is covered
by insurance, an enforcement proceeding has been commenced by any
creditor upon such judgment or decree which is not promptly
stayed;
(f) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy
Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability generally to pay its debts
as the same become due;
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary that is a Significant Subsidiary in an
involuntary case in which it is the debtor,
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary that is a Significant Subsidiary or for all or
substantially all of the property of the Company of any
Restricted Subsidiary that is a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary that is a Significant Subsidiary,
and the order or decree contemplated in clauses (i), (ii) or (iii) of
this clause (g), remains unstayed and in effect for 60 consecutive days;
or
(h) any Subsidiary Guarantee shall for any reason cease to be in full
force and effect or be declared null and void or any responsible
officer of the Company or Subsidiary Guarantor denies that it has
any further liability under any such Subsidiary Guarantee or
gives notice to such effect (other than by reason of the
termination of this Indenture or the release of any such
Subsidiary Guarantee in accordance with such Subsidiary Guarantee
and this Indenture).
SECTION 6.02. ACCELERATION OF MATURITY; RESCISSION.
If an Event of Default (other than of a type specified in clauses (f) or
(g) of Section 6.01) occurs and is continuing hereunder, the Trustee or the
Holders of at least 30% in principal amount of the then outstanding Notes may
declare the principal, premium, if any, interest and any other monetary
obligations on all the then outstanding Notes to be due and payable immediately
by notice in writing to the Company (and the Trustee, if given by the Holders);
provided, however, that, so long as any Indebtedness permitted to be incurred
pursuant to the New Credit Facility shall be outstanding, no such acceleration
shall be
61
effective until the earlier of (i) acceleration of any such Indebtedness under
the New Credit Facility or (ii) five business days after the giving of such
written notice to the Company and the representative under the New Credit
Facility of such acceleration. Upon the effectiveness of such declaration, such
principal, premium, interest and other monetary obligations will be due and
payable immediately.
Notwithstanding the foregoing, in the case of an Event of Default
arising under clauses (f) or (g) of Section 6.01, all outstanding Notes will
become due and payable without further action or notice. The Holders of a
majority in principal amount of the Notes then outstanding by written notice to
the Trustee may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal or interest that has become due solely
because of the acceleration) have been cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may upon
delivery of pursue any available remedy to collect the payment of principal,
premium, if any, and interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
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 of a Note 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. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, any such Note held
by a non-consenting Holder; provided, however, that the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability. The Trustee may take any other action
which it deems proper which is not inconsistent with any such direction.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of a Note will have any right to institute any proceeding with
respect to this Indenture or for any remedy hereunder, unless (i) such Holder
shall have previously given to the Trustee written
62
notice of a continuing Event of Default with respect to the Notes, (ii) the
Holders of at least 30% in aggregate principal amount of the Notes then
outstanding shall have made written request to the Trustee to institute such
proceeding and, if requested by the Trustee, provided reasonable indemnity to
the Trustee, with respect to such proceeding and (iii) the Trustee shall not
have received from the Holders of a majority in aggregate principal amount of
the Notes then outstanding a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on any Note, on or after the respective due dates expressed in any Note, 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.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, as administrative expenses associated with any such proceeding 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, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article Six, it shall
pay out the money in the following order:
63
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to holders of Senior Debt and Guarantor Senior Debt to the
extent required by Article 10 hereof or any Subsidiary Guarantee;
Third: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal, premium and, if any, and interest, respectively;
Fourth: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Notes; and
Fifth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 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 a 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 does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12. WAIVER OF STAY, EXTENSION OF USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
64
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture, provided, that the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction received
by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture unless
the Holders shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) 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. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it
to be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
65
(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 that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) 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.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. 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 with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
SECTION 7.04. 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 direction of the Company 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
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
66
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA ss. 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee, from time to time as may be agreed
upon between them, reasonable compensation for its acceptance of this Indenture
and services hereunder. 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 promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. 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 shall cooperate in the defense. 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 obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then
67
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
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 of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business (including the trust
created by this Indenture) to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has, or is a wholly owned subsidiary of a bank holding
company that has, a combined capital and surplus of at least $100 million as set
forth in its most recent published annual report of condition.
68
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 7.12. RIGHTS OF HOLDERS WITH RESPECT TO TIME METHOD AND PLACE
Subject to the limitations of this Article 7, a majority in principal
amount of the outstanding Notes issued hereunder shall have the right to direct
the time, method and place of conducting any proceeding for exercising any
remedy available to the Trustee, subject to certain exceptions.
ARTICLE 8
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 8.02 or Section 8.03 be
applied to all Notes and Subsidiary Guarantees then outstanding upon compliance
with the conditions set forth below in this Article Eight.
SECTION 8.02. DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 of the option applicable
to this Section 8.02, the Company and the Subsidiary Guarantors, if any, shall
be deemed to have been discharged from their respective obligations with respect
to all Notes and Subsidiary Guarantees then outstanding on the date the
conditions set forth below are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company and any Subsidiary Guarantor
shall be deemed to have paid and discharged the entire indebtedness represented
by the Notes and any Subsidiary Guarantees outstanding, which shall thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 and the
other Sections of this Indenture referred to in (A) and (B) below, and to have
satisfied all its other obligations under such Notes, Subsidiary Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of Notes then outstanding to receive solely
from the trust fund described in Section 8.04 and as more fully set forth in
such Section, payments in respect of the principal of (and premium, if any) and
interest on such Notes when such payments are due, or on the Redemption Date, as
the case may be, (B) the Company's obligations with respect to such Notes under
Sections 2.03, 2.04, 2.05, 2.06 2.07, 2.10, 4.02 and 4.03, (C) the rights,
powers, trusts, duties, indemnities and immunities of the Trustee hereunder and
the Company's obligations in connection therewith and (D) this Article Eight.
Subject to compliance with this Article Eight, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 with respect to the Notes.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable
to this Section 8.03, the Company and each Subsidiary Guarantor shall be
released from its obligations under the covenants
69
contained in Article Five and in Sections 4.04, 4.07, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15 and 4.16 with respect to the outstanding Notes and Subsidiary
Guarantees, if any, on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Notes and the Subsidiary
Guarantees, if any, shall thereafter be deemed to be not "outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes and Subsidiary Guarantees, if any, shall not be
deemed outstanding for financial accounting purposes). For this purpose, such
covenant defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, if any, the Company and any Subsidiary Guarantor may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an event
of Default under Section 6.01(c), but, except as specified above, the remainder
of this Indenture and such Notes and Subsidiary Guarantees, if any, shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
of the option applicable to Section 8.03, Sections 6.01(c) through 6.01(e) and
Section 6.01(h) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
8.02 or Section 8.03 to the outstanding Notes and Subsidiary Guarantees:
(i) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes and without retaining any legal interest
corpus of such trust, cash in U.S. dollars, non-callable Government Securities,
or a combination thereof, in such amounts as will be sufficient, in the opinion
of a nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest due on the outstanding Notes on the
Stated Maturity thereof or on the applicable Redemption Date, as the case may
be, of such principal, premium, if any, or interest on the outstanding Notes,
and the Company must specify whether the Notes are being defeased to maturity or
to a particular redemption date;
(ii) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably acceptable
to the Trustee confirming that, subject to customary assumptions and exclusions,
(A) the Company has received from, or there has been published by, the United
States Internal Revenue Service a ruling or (B) since the Issuance Date, there
has been a change in the applicable U.S. federal income tax law, in either case
to the effect that, and based thereon such opinion of counsel in the United
States shall confirm that, subject to customary assumptions and exclusions, the
Holders of the outstanding Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such Legal Defeasance and will
be subject to U.S. federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that, subject to customary assumptions and
exclusions, the Holders of the outstanding Notes will not recognize income, gain
or loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to such tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred;
70
(iv) no Default or Event of Default (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such deposit)
shall have occurred and be continuing on the date of such deposit or, insofar as
Events of Default set forth in Section 6.01(f) and (g), at any time in the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be satisfied until the expiration of
such period);
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or a Subsidiary
Guarantor, if any, is a party or by which the Company or a Subsidiary Guarantor,
if any, is bound;
(vi) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions (which assumptions and exclusions shall not
relate to the operation of Section 547 of the United States Bankruptcy Code or
any analogous laws of the state governing the provisions of this Indenture)
following the deposit the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally under any applicable U.S. federal or state law, and
that the Trustee has a perfected security interest in such trust funds for the
ratable benefit of the Holders;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of defeating, hindering, delaying or defrauding any creditors of the Company or
a Subsidiary Guarantor, if any, or others;
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an opinion of counsel in the United States (which opinion of
counsel may be subject to customary assumptions and exclusions) each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance, as the case may be, have been complied with; and
(ix) the Trustee shall have received such other documents and assurances
as the Trustee shall reasonably require.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 4.03, all
money and Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 in respect of the Notes
then outstanding shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Notes then outstanding.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it
71
as provided in Section 8.04 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(i)), are in excess of the amount thereof which would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.02 or 8.03, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and any Subsidiary Guarantor's obligations under this Indenture,
the Notes and the Subsidiary Guarantees, if any, shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03, as the case
may be, until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03, as the case may be;
provided, however, that if the Company or any Subsidiary Guarantor makes any
payment of principal of (or premium, if any) or interest on any Note following
the reinstatement of its obligations, the Company or any Subsidiary Guarantor
shall be subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or Notes, and with respect to a
Subsidiary Guarantee, the Subsidiary Guarantor under such Subsidiary Guarantee
and the Trustee may amend or supplement such Subsidiary Guarantee, without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency,
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes,
(c) to comply with Article 5 hereof;
(d) to provide for the assumption of the Company's or any Subsidiary
Guarantor's obligations to the Holders of the Notes;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not, in the
opinion of counsel, adversely affect the legal rights hereunder
of any such Holder,
(f) to add covenants for the benefit of the Holders or to surrender
any right or power conferred upon the Company,
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust
Indenture Act, or
(h) to add a Subsidiary Guarantor under this Indenture.
72
Upon the written request of the Company accompanied by resolutions of
the Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of an Officers'
Certificate and an Opinion of Counsel, the Trustee shall join with the Company
and the Subsidiary Guarantors, if any, in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture, the Notes
and a Subsidiary Guarantee, if any, issued hereunder may be amended or
supplemented with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for the Notes), and, subject to Sections
6.02, 6.04 and 6.07 hereof, any existing default or compliance with any
provision of this Indenture, the Notes or the Subsidiary Guarantees may be
waived with the consent of the Holders of a majority in principal amount of the
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes).
Upon the request of the Company accompanied by resolutions of the Board
of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of an Officers' Certificate and an Opinion of Counsel, the Trustee
shall join with the Company and any Subsidiary Guarantor in the execution of
such amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such amended or supplemental Indenture.
The consent of the Holders is not necessary under this Section 9.02 to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture, the Notes or the Subsidiary Guarantees, if any. However, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Note or Subsidiary Guarantee held by a non-consenting Holder):
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any such
Note or alter or waive the provisions with respect to the
redemption of the Notes (other than provisions relating to the
covenants described under Sections 4.09 and 4.10);
(iii) reduce the rate of or change the time for payment of interest on
any Note;
73
(iv) waive a Default or Event of Default in the payment of principal
of, premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at
least a majority in aggregate principal amount of such Notes and
a waiver of the payment default that resulted from such
acceleration), or in respect of a covenant or provision contained
herein or any Subsidiary Guarantee which cannot be amended or
modified without the consent of all Holders;
(v) make any Note payable in money other than that stated in such
Notes,
(vi) make any change in Section 6.04 or 6.07,
(vii) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.09 or Section 4.10),
(viii) except as provided under Article 8 and the relevant Subsidiary
Guarantee, release a Subsidiary Guarantor, if any, from its
obligations under its Subsidiary Guarantee, if any, or make any
change in a Subsidiary Guarantee, if any, that would adversely
affect the Holders;
(ix) make any change in Article 10 or the subordination provisions of
any Subsidiary Guarantee that would adversely affect the holders
of the Notes; or
(x) make any change in the foregoing amendment and waiver provisions
of this Article 9.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may, but shall not be required to, place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
74
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article Nine if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In signing or refusing to sign any amended or supplemental
indenture the Trustee shall be entitled to receive and (subject to Section 7.01)
shall be fully protected in relying upon an Officers's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Company
and the Subsidiary Guarantors, if any, in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that the
payment of the Subordinated Note Obligations shall be subordinated in right of
payment, as set forth in this Article 10, to the prior payment in full in cash
or Cash Equivalents of all Senior Indebtedness, whether outstanding on the date
hereof or thereafter incurred.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, the holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or cash equivalents of such Senior Indebtedness
(including interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Indebtedness) before the Holders of Notes
will be entitled to receive any payment with respect to the Subordinated Note
Obligations (except that Holders of Notes may receive (i) Equity Interests of
the Company and any debt securities of the Company that are subordinated at
least to the same extent as the Notes to (a) Senior Indebtedness and (b) any
Indebtedness issued in exchange for Senior Indebtedness and (ii) payments made
from the trusts described in Article 8 hereof), and until all Senior
Indebtedness is paid in full in cash or Cash Equivalents, any distribution to
which the Holders of Notes would be entitled shall be made to the holders of
Senior Indebtedness (except that Holders of Notes may receive (i) Equity
Interests of the Company and any debt securities of the Company that are
subordinated at least to the same extent as the Notes to (a) Senior Indebtedness
and (b) any Indebtedness issued in exchange for Senior Indebtedness and (ii)
payments made from the trusts described in Article 8 hereof).
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
The Company may not make any payment upon or in respect of the
Subordinated Note Obligations (except that holders of Notes may receive (i)
Equity Interests of the Company and any debt securities of the Company that are
subordinated at least to the same extent as the Notes to (a) Senior Indebtedness
and (b) any Indebtedness issued in exchange for Senior Indebtedness and (ii)
payments made from the trusts described in Article 8 hereof) if:
75
(i) a default in the payment of the principal of, premium, if any,
or interest on, or of unreimbursed amounts under letters of
credit or fees relating to letters of credit and commitments
to extend credit constituting Designated Senior Indebtedness
occurs and is continuing beyond any applicable period of grace
(a "payment default") or
(ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits holders of the
Designated Senior Indebtedness as to which such default
relates to accelerate its maturity (a "non-payment default")
and the Trustee receives a notice of such default (a "Payment
Blockage Notice") from a representative of such Designated
Senior Indebtedness. No new period of payment blockage may be
commenced unless and until (i) 365 days have elapsed since the
effectiveness of the immediately preceding Payment Blockage
Notice (provided that, if any Payment Blockage Notice is given
by or on behalf of any holders of Designated Senior
Indebtedness (other than the representative under the New
Credit Facility), within such 365 day period, the
representative under the New Credit Facility may give another
Payment Blockage Notice within such period) and (ii) all
scheduled payments of principal, premium, if any, and interest
on the Notes that have come due have been paid in full in cash
or Cash Equivalents. In no event, however, may the total
number of days during which any Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during
any 365 consecutive day period. No non-payment 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 such
default shall have been cured for a period of not less than 90
days.
The Company may and shall resume payments on the Notes (including any
missed payments):
(a) in the case of a payment default described in clause (i)
above, upon the date on which such default is cured or waived
or shall have ceased to exist or such Designated Senior
Indebtedness shall have been discharged or paid in full in
cash or Cash Equivalents; and
(b) in the case of a non-payment default described in clause (ii)
above, the earlier of (x) the date on which such nonpayment
default is cured or waived, (y) 179 days after the date on
which the applicable Payment Blockage Notice is received (each
such period, the "Payment Blockage Period") or (z) the date
such Payment Blockage Period shall be terminated by written
notice to the Trustee from the requisite holders of such
Designated Senior Indebtedness necessary to terminate such
period or from their representative.
SECTION 10.04. ACCELERATION OF SECURITIES.
If the Company fails to make any payment on the Notes when due or
within any applicable grace period, whether or not on account of the payment
blockage provision referred to above, such failure shall constitute an Event of
Default and shall entitle the holders of the Notes to accelerate the maturity
thereof. The Company shall promptly notify holders of Senior Indebtedness if
payment of the Notes is accelerated because of an Event of Default.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Subordinated Note Obligations at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section
10.02 or 10.03 hereof, such payment shall be held by the Trustee or such
76
Holder, in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Indebtedness as their
interests may appear or their representative under the indenture or other
agreement (if any) pursuant to which Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Indebtedness remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
In the event that any Holder receives any payment of any Subordinated
Note Obligations at any time when such payment is prohibited by Section 10.02 or
10.03 hereof, such payment shall be held by such Holder, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written request
to, the Holders of Senior Indebtedness as their interest may appear or their
representative under the indenture or other agreement (if any) pursuant to which
Senior Indebtedness may have been issued, as their interest may appear, for the
application to the payment of all Obligations with respect to Senior
Indebtedness remaining unpaid to the extend necessary to pay such Obligations in
full accordance with their terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. 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 the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Subordinated
Note Obligations to violate this Article 10, but failure to give such notice
shall not affect the subordination of the Notes to the Senior Indebtedness as
provided in this Article 10.
SECTION 10.07. SUBROGATION.
After all Senior Indebtedness is paid in full and until the Notes are
paid in full in cash, Holders of Notes shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Notes) to the rights of holders
of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the Holders
of Notes have been applied to the payment of Senior Indebtedness. A distribution
made under this Article 10 to holders of Senior Indebtedness that otherwise
would have been made to Holders of Notes is not, as between the Company and
Holders, a payment by the Company on the Senior Indebtedness.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Indebtedness. Nothing in this Indenture shall:
77
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and
unconditional, to pay principal of, premium, if any,
and interest on the Notes in accordance with their
terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in
relation to holders of Senior Indebtedness; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders
and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to
Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium, if any, or interest on a Note on the due date, the failure is
nevertheless a Default or an Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness 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 any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given to their
representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the 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 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Subordinated
Note Obligations to violate this Article 10. Only the Company or a
representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
78
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a representative of Designated Senior Indebtedness is hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
ARTICLE 11
SATISFACTION AND DISCHARGE
SECTION 11.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and will cease to be of further
effect as to all Notes issued hereunder, when either
(a) all such Notes theretofore 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
and thereafter repaid to the Company) have been
delivered to the Trustee for cancellation; or
(b) (i) all such Notes not theretofore delivered to
such Trustee for cancellation have become
due and payable by reason of the making of a
notice of redemption or otherwise or will
become due and payable within one year and
the Company or a Subsidiary Guarantor, if
any, has irrevocably deposited or caused to
be deposited with such Trustee as trust
funds in trust an amount of money sufficient
to pay and discharge the entire Indebtedness
on such Notes not theretofore delivered to
the Trustee for cancellation for principal,
premium, if any, and accrued interest to the
date of maturity or redemption;
(ii) no Default or Event of Default with respect
to this Indenture or the Notes shall have
occurred and be continuing on the date of
such deposit or shall occur as a result of
such deposit and such deposit will not
result in a breach or violation of, or
constitute a default under, any other
instrument to which the Company or a
Subsidiary Guarantor, if any, is a party or
by which the Company or a Subsidiary
Guarantor, if any, is bound;
(iii) the Company or a Subsidiary Guarantor, if
any, has paid or caused to be paid all sums
payable by it under this Indenture; and
(iv) the Company has delivered irrevocable
instructions to the Trustee under this
Indenture to apply the deposited money
toward the payment of such Notes at maturity
or the redemption date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
opinion of counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
79
SECTION 11.02 APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section 4.03, all
money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though such deposit had occurred pursuant to Section 11.01;
provided that if the Company has made any payment of principal of, premium, if
any, or interest on any Notes because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or Government Securities held by the Trustee
or Paying Agent.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. CONFLICT OF ANY PROVISION OF INDENTURE WITH TIA.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company, any Subsidiary Guarantor or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or any Subsidiary Guarantor:
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
80
If to the Trustee:
First Trust of New York, National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx
Attention: Corporate Trust Department -- KSL Recreation
Group, Inc.
Facsimile: (000) 000-0000
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. 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
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
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).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
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 (which shall include the
statements set forth in Section 1.05 hereof) stating that, in
the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to
the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the
statements set forth in Section 1.05 hereof) stating that, in
the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.
81
SECTION 12.05. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, any date established for
payment of Defaulted Interest pursuant to Section 2.12, or any Maturity with
respect to any Note shall not be a Business Day, then (notwithstanding any other
provisions of this Indenture, the Notes or any Subsidiary Guarantee) payment of
interest or principal (and premium, if any) need not be made on such date but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or date established for payment of
Defaulted Interest pursuant to Section 2.12 or Maturity, and no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date or date established for payment of Defaulted Interest pursuant to
Section 2.12 or Maturity, as the case may be, to the next succeeding Business
Day.
SECTION 12.06. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company or a Subsidiary Guarantor, if any, shall have any liability for any
obligations of the Company or the Subsidiary Guarantors, if any, under the
Notes, the Subsidiary Guarantees, if any, or this Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each Holder of the Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such a waiver is
against public policy.
SECTION 12.07. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES, IF ANY, SHALL
BE, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF.
SECTION 12.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 12.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its respective successors and assigns, whether so expressed or not. All
covenants and agreements in this Indenture by the Trustee shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 12.10. 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.
82
SECTION 12.11. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.12. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
83
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed in New York, New York as of the day and year first above written.
KSL RECREATION GROUP, INC.
Dated: April 30, 1997 By:
---------------------------------
Name:
Title:
Dated: April 30, 1997 By:
---------------------------------
Name:
Title:
FIRST TRUST OF NEW YORK, NATIONAL ASSOCIATION
Dated: April 30, 1997 By:
---------------------------------
Name:
Title:
EXHIBIT A-1
(Face of Note)
10 1/4% Senior Subordinated Notes due 2007
No. Cusip No:
KSL RECREATION GROUP, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of $
_______________________________ Dollars on __________, 2007.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
KSL RECREATION GROUP, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
This is one of the 10 1/4% Senior Subordinated Notes due 2007 referred to in the
within-mentioned Indenture:
First Trust of New York, National Association
as Trustee
By: -----------------------
Authorized Signature
A-1-1
(Back of Note)
10 1/4% Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be 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.]1
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN
$250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER
--------
1 This paragraph should be included only if the Note is a Global Note.
A-1-2
IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS."
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. SL Recreation Group, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10.25% per
annum from April 30, 1997 until May 1, 2007. The Company shall pay interest
semi-annually in arrears on May 1 and November 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issuance Date; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be November 1, 1997. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate equal to the per annum rate on the Notes then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. SPECIAL INTEREST. The holder of this Note is entitled to the benefits of the
Registration Rights Agreement dated as of April 30, 1997, among the Company and
the Initial Purchasers (the "Registration Rights Agreement").
(a) In the event that either (i) the Exchange Offer
Registration Statement (as defined in the Registration Rights Agreement) has not
been declared effective on or prior to the 150th day following the Issuance Date
or (ii) the Exchange Offer is not consummated or a Shelf Registration Statement
(as defined in the Registration Rights Agreement) is not declared effective on
or prior to the 180th day following the Issuance Date, or (iii) the Exchange
Offer Registration Statement or, subject to the provisions of paragraph (b)
below, the Shelf Registration Statement is declared effective but thereafter
ceases to be effective or usable, the interest rate borne by the Notes shall be
increased by one-quarter of one percent per annum following such 150-day period
in the case of clause (i) above, or following such 180-day period in the case of
clause (ii) above, or following the date on which such Registration Statement
ceases to be effective or usable in the case of clause (iii) above, which rate
will be increased by an additional one-quarter of one percent per annum for each
90-day period that any additional interest continues to accrue; provided that
the aggregate increase in such annual interest rate will in no event exceed
one-percent. In each case, such additional interest (the "Special Interest")
shall be payable in cash semiannually in
A-1-3
arrears on each May 1 and November 1, commencing on the first such date
following any event set forth in clause (i), (ii) or (iii) above. Upon (x) the
effectiveness of the Exchange Offer Registration Statement after the 150-day
period described in clause (i) above, (y) consummation of the Exchange Offer or
the effectiveness of a Shelf Registration Statement, as the case may be, after
the 180-day period described in clause (ii) above, or (z) the date on which the
Exchange Offer Registration Statement or Shelf Registration Statement is again
declared effective or becomes usable, in the case of clause (iii) above, the
interest rate borne by the Notes from the date of such effectiveness,
consummation or that the applicable Registration Statement once again becomes
effective or usable, as the case may be, will be reduced to the original
interest rate set forth in paragraph 1 of this Note if the Company is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, a different event specified in clauses (i), (ii) or
(iii) above occurs, the interest rate will again be increased and thereafter
reduced pursuant to the foregoing provisions.
(b) Notwithstanding the preceding paragraph, if the Shelf
Registration Statement becomes effective but thereafter ceases to be effective
or is unusable pending the announcement of a material corporate transaction or,
as required under applicable securities laws, and the number of days in any
consecutive twelve-month period for which the Shelf Registration Statement is
not effective or usable does not exceed 30 days in the aggregate, then the
interest rate borne by the Notes will not be increased pursuant to the preceding
paragraph.
(c) Except as expressly provided in this paragraph 2, Special
Interest shall be treated as interest and any date on which Special Interest is
due and payable shall be treated as an Interest Payment Date for all purposes
under this Note and the Indenture.
(d) In the event that the Company is required to pay Special
Interest pursuant to this paragraph 2, the Company shall notify the Trustee in
writing at least 15 days prior to the first Interest Payment Date upon which
such Special Interest is due; provided that, in the event that the obligation to
pay such Special Interest occurs less than 15 days prior to such Special
Interest Date, such notice shall be provided by the Company to the Trustee as
soon as reasonably practicable prior to such Interest Payment Date.
3. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(including principal, premium, if any, and interest) by wire transfer of
immediately available funds to the accounts specified by the Note Custodian or,
at the option of the Company, payment of interest may be made by check mailed to
the Holders of the Notes at their respective addresses set forth in the register
of Holders of Notes. Notwithstanding the foregoing, all payments with respect to
the Notes (the Holders of which have provided wire transfer instructions to the
Company at least ten business days prior to the applicable payment date), will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Such payment shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts.
4. PAYING AGENT AND REGISTRAR. Initially, First Trust of New York, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Notes may be presented for registration of transfer and exchange
at the offices of the Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
A-1-4
5. INDENTURE. The Company issued the Notes under an Indenture dated as of April
30, 1997 ("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 Trust Indenture Act of 1939, as amended (15 U.S. Code xx.xx.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $125,000,000 in
aggregate principal amount.
6. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes will not
be redeemable at the Company's option prior to May 1, 2002. On and after May 1,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 1
of each of the years indicated below:
YEAR REDEMPTION
PRICE
2002 ................................................... 105.125%
2003 ................................................... 103.417%
2004 ................................................... 101.708%
2005 and thereafter......................................... 100.000%
In addition, at any time or from time to time, on or prior to May 1,
2001, the Company may, at its option, redeem up to 50% of the aggregate
principal amount of Notes originally issued under the Indenture on the Issuance
Date at a Redemption Price equal to 110.25% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the Redemption
Date, with the net cash proceeds of one or more Equity Offerings; provided that
at least 50% of the aggregate principal amount of Notes originally issued under
the Indenture on the Issuance Date remains outstanding immediately after the
occurrence of such redemption; provided further that such redemption occurs
within 60 days of the date of closing of each such Equity Offering. The Trustee
shall select the Notes to be purchased in the manner described in the Indenture.
7. MANDATORY REDEMPTION. Other than as set forth in paragraph 9, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each Holder whose Notes
are to be redeemed at its registered address. Notes may be redeemed in part but
only in whole multiples of $1,000. On and after the Redemption Date interest
ceases to accrue on Notes or portions thereof called for redemption.
9. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
the Notes at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the
A-1-5
Company shall mail a notice to each Holder of Notes issued under the Indenture,
with a copy to the Trustee, containing the information set forth in Section 4.09
of the Indenture. Holders of Notes that are subject to an offer to purchase may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" on the reverse side of this Note.
(b) When the aggregate amount of Excess Proceeds in connection with
Asset Sales by the Company exceeds $15 million, the Company shall make an offer
to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that is an integral multiple of $1,000 that may be
purchased out of the Excess Proceeds at an offer price in cash equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase in accordance with the procedures set forth in Section 3.10 of
the Indenture. The Company will commence an Asset Sale Offer with respect to
Excess Proceeds within ten Business Days after the date that Excess Proceeds
exceeds $15 million by mailing the notice required pursuant to the terms Section
3.10 of the Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse side of this Note.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $250,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
12. SUBORDINATION. Each Holder by accepting a Note agrees that the payment of
principal of, premium, if any, and interest on each Note is subordinated in
right of payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed, provided that such
creation, incurrence,
A-1-6
assumption or guarantee is in accordance with the provisions set forth in the
Indenture), and this subordination provision is for the benefit of the holders
of Senior Indebtedness.
13. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and, subject to the terms of the Indenture and any
applicable Subsidiary Guarantee, any existing default (other than a default in
the payment of the principal of, premium, if any, or interest on, the Notes) or
compliance with any provision of the Indenture, the Notes or any Subsidiary
Guarantee may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes. Without the consent of any
Holder of a Note, the Indenture, the Notes and any Subsidiary Guarantee may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to comply with Article 5 of the Indenture, to provide for the assumption
of the Company's or any Subsidiary Guarantor's obligations to Holders of the
Notes, to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to add covenants for the benefit of the
Holders or to surrender any right or power conferred upon the Company, to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA, to add a Subsidiary Guarantor
under the Indenture, or to provide for the appointment of a successor trustee in
compliance with the requirements of Section 7.10 of the Indenture.
14. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default in payment when due and payable, upon redemption,
acceleration or otherwise, of principal of, or premium, if any, on the Notes
(whether or not such payment shall be prohibited by Article 10 of the Indenture
or the terms of any Subsidiary Guarantee); (b) default for 30 days or more in
the payment when due of interest on or with respect to the Notes whether or not
such payment shall be prohibited by Article 10 of the Indenture or the terms of
any Subsidiary Guarantee; (c) failure by the Company or a Subsidiary Guarantor,
if any, for 30 days after receipt of written notice given by the Trustee or the
holders of at least 30% in principal amount of the Notes then outstanding to
comply with any of its other agreements in the Indenture, the Notes or the
Subsidiary Guarantees, if any; (d) default under any mortgage, indenture or
instrument under which there is issued or by which there is secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries (other than Indebtedness owed to the Company or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Issuance Date, if both (A) such default either (1) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (2) relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity and (B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity (after giving effect to any applicable grace
periods), or the maturity of which has been so accelerated, aggregate $15
million or more at any one time outstanding; (e) failure by the Company or any
of its Significant Subsidiaries to pay final, non-appealable judgments
aggregating in excess of $15 million, which final, non-appealable judgments
remain unpaid, undischarged and unstayed for a period of more than 60 days after
such judgment becomes final and non-appealable, and in the event such judgment
is covered by insurance, an enforcement proceeding has been commenced by any
creditor upon such
A-1-7
judgment or decree which is not promptly stayed; (f) the Company or any
Restricted Subsidiary that is a Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case in which it
is the debtor, (iii) consents to the appointment of a custodian of it or for all
or substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) admits in writing its inability generally to
pay its debts as the same become due; (g) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (i) is for relief
against the Company or any Restricted Subsidiary that is a Significant
Subsidiary in an involuntary case in which it is the debtor, (ii) appoints a
custodian of the Company or any Restricted Subsidiary that is a Significant
Subsidiary or for all or substantially all of the property of the Company of any
Restricted Subsidiary that is a Significant Subsidiary; or (iii) orders the
liquidation of the Company or any Restricted Subsidiary that is a Significant
Subsidiary, and the order or decree contemplated in clauses (i), (ii) or (iii)
of this clause (g), remains unstayed and in effect for 60 consecutive days; or
(h) any Subsidiary Guarantee shall for any reason cease to be in full force and
effect or be declared null and void or any responsible officer of the Company or
Subsidiary Guarantor denies that it has any further liability under any such
Subsidiary Guarantee or gives notice to such effect (other than by reason of the
termination of the Indenture or the release of any such Subsidiary Guarantee in
accordance with such Subsidiary Guarantee and the Indenture).
If an Event of Default (other than of a type specified in clause (f) or
(g) in the preceding paragraph) occurs and is continuing under the Indenture,
the Trustee or the Holders of at least 30% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all the then outstanding Notes to be due and
payable immediately by notice in writing to the Company (and the Trustee, if
given by the Holders); provided, however, that, so long as any Indebtedness
permitted to be incurred pursuant to the New Credit Facility shall be
outstanding, no such acceleration shall be effective until the earlier of (i)
acceleration of any such Indebtedness under the New Credit Facility or (ii) five
business days after the giving of written notice to the Company and the
representative under the New Credit Facility of such acceleration. Upon the
effectiveness of such declaration, such principal, premium, interest and other
monetary obligations will be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising under clause (f) or (g) of
the preceding paragraph, all outstanding Notes will become due and payable
without further action or notice. Holders of Notes may not enforce the Indenture
or the Notes except as provided under the Indenture. Subject to certain
limitations, including the provision to the Trustee of an indemnity in
accordance with Section 7.07 of the Indenture, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal, premium, if any, or interest)
if it determines that withholding notice is in their interest. In addition, the
Trustee shall have no obligation to accelerate the Notes if in the best judgment
of the Trustee acceleration is not in the best interest of the Holders of such
Notes.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, and may otherwise deal with the Company, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or
A-1-8
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting any of these Notes
waives and releases all such liability.
17. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP 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.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
A-1-9
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint____________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:________________
Your Signature:___________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-1-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.09 or 4.10 of the Indenture, check the box below:
|_| Section 4.09 |_| Section 4.10
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.09 or Section 4.10 of the Indenture, state the
amount you elect to have purchased: $_________
Date:___________________ Your Signature:__________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_______________________
Signature Guarantee.
A-1-11
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE2
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
Amount of decrease in Amount of increase in of this Signature of
Principal Amount Principal Amount Global Note authorized officer of
of this of this following such decrease Trustee or Note
Date of Exchange Global Note Global Note (or increase) Custodian
---------------------- ----------------------- ------------------------ ------------------------ ----------------
--------
2 This should be included only if the Note is a Global Note.
X-0-00
XXXXXXX X-0
(Face of Regulation S Temporary Global Note)
10 1/4% Senior Subordinated Notes due 2007
No. Cusip No:
KSL RECREATION GROUP, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
_______________________________ Dollars on __________, 2007.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
KSL RECREATION GROUP, INC.
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
This is one of the 10 1/4% Senior
Subordinated Notes due 2007
referred to in the within-mentioned
Indenture:
First Trust of New York, National Association
As Trustee
By: _____________________________
Authorized Signature
A-2-1
(Back of Regulation S Temporary Global Note)
10 1/4% Senior Subordinated Notes due 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN
A-2-2
OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND , IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES AT THE TIME OF TRANSFER OF
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. KSL Recreation Group, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10.25% per
annum from April 30, 1997 until May 1, 2007. The Company shall pay interest
semi-annually in arrears on May 1 and November 1 of each year, or if any such
day is not a Business Day, on the next succeed ng Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issuance Date; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be November 1, 1997. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate equal to the per annum rate on the Notes then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. SPECIAL INTEREST. The holder of this Note is entitled to the benefits of the
Registration Rights Agreement dated as of April 30, 1997, among the Company and
the Initial Purchasers (the "Registration Rights Agreement").
(a) In the event that either (i) the Exch nge Offer Registration
Statement (as defined in the Registration Rights Agreement) has not been
declared effective on or prior to the 150th day following the Issuance Date or
(ii) the Exchange Offer is not consummated or a Shelf Registration Statement (as
defined in the Registration Rights Agreement) is not declared effective on or
prior to the 180th day following the Issuance Date, or (iii) the Exchange Offer
Registration Statement or, subject to the provisions of paragraph (b) below, the
Shelf Registration Statement is declared effective but thereafter ceases to be
effective or usable, the interest rate borne by the Notes shall be increased by
one-quarter of one percent per annum following such 150-day period in the case
of clause (i) above, or following such 180-day period in the case of clause (ii)
above, or following the date on which such Registration Statement ceases to be
effective or usable in the case of clause (iii) above, which rate will be
increased by an additional one-quarter of one percent per annum for each 90-day
period that any additional interest continues to accrue; provided that the
aggregate increase in such annual interest rate will in no event exceed
one-percent. In each case, such
A-2-3
additional interest (the "Special Interest") shall be payable in cash
semiannually in arrears on each May 1 and November 1, commencing on the first
such date following any event set forth in clause (i), (ii) or (iii) above. Upon
(x) the effectiveness of the Exchange Offer Registration Statement after the
150-day period described in clause (i) above, (y) consummation of the Exchange
Offer or the effectiveness of a Shelf Registration Statement, as the case may
be, after the 180-day period described in clause (ii) above, or (z) the date on
which the Exchange Offer Registration Statement or Shelf Registration Statement
is again declared effective or becomes usable, in the case of clause (iii)
above, the interest rate borne by the Notes from the date of such effectiveness,
consummation or that the applicable Registration Statement once again becomes
effective or usable, as the case may be, will be reduced to the original
interest rate set forth in paragraph 1 of this Note if the Company is otherwise
in compliance with this paragraph; provided, however, that, if after any such
reduction in interest rate, a different event specified in clauses (i), (ii) or
(iii) above occurs, the interest rate will again be increased and thereafter
reduced pursuant to the foregoing provisions.
(b) Notwithstanding the preceding paragraph, if the Shelf Registration
Statement becomes effective but thereafter ceases to be effective or is unusable
pending the announcement of a material corporate transaction or, as required
under applicable securities laws, and the number of days in any consecutive
twelve-month period for which the Shelf Registration Statement is not effective
or usable does not exceed 30 days in the aggregate, then the interest rate borne
by the Notes will not be increased pursuant to the preceding paragraph.
(c) Except as expressly provided in this paragraph 2, Special Interest
shall be treated as interest and any date on which Special Interest is due and
payable shall be treated as an Interest Payment Date for all purposes under this
Note and the Indenture.
(d) In the event that the Company is required to pay Special Interest
pursuant to this paragraph 2, the Company shall notify the Trustee in writing at
least 15 days prior to the first Interest Payment Date upon which such Special
Interest is due; provided that, in the event that the obligation to pay such
Special Interest occurs less than 15 days prior to such Special Interest Date,
such notice shall be provided by the Company to the Trustee as soon as
reasonably practicable prior to such Interest Payment Date.
3. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(including principal, premium, if any, and interest) by wire transfer of
immediately available funds to the accounts specified by the Note Custodian or,
at the option of the Company, payment of interest may be made by check mailed to
the Holders of the Notes at their respective addresses set forth in the register
of Holders of Notes. Notwithstanding the foregoing, all payments with respect to
the Notes (the Holders of which have provided wire transfer instructions to the
Company at least ten business days prior to the applicable payment date), will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Such payment shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts.
4. PAYING AGENT AND REGISTRAR. Initially, First Trust of New York, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Notes may be presented for registration of transfer and exchange
at the offices of the Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
5. INDENTURE. The Company issued the Notes under an Indenture dated as of April
30, 1997 ("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 Trust Indenture Act of 1939, as amended (15 U.S. Code xx.xx.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $125,000,000 in
aggregate principal amount.
A-2-4
6. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes will not be
redeemable at the Company's option prior to May 1, 2002. On and after May 1,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 1
of each of the years indicated below:
YEAR REDEMPTION
PRICE
2002................................................. 105.12 %
2003................................................. 103.417%
2004................................................. 101.708%
2005 and thereafter.................................. 100.000%
In addition, at any time or from time to time, on or prior to May 1,
2001, the Company may, at its option, redeem up to 50% of the aggregated
principal amount of Notes originally issued under the indenture on the Issuance
Date at a Redemption Price equal to 110.25% of the aggregated principal amount
thereof, plus accured and unpaid interest thereon, if any, to the Redemption
Date, with the net cash proceeds of one or more Equity Offerings; provided that
at least 50% of the aggregate principal amount of Notes originally issued under
the Indenture on the Issuance Date remains outstanding immediately after the
occurrence of such redemption; provided further that such redemption occurs
within 60 days of the date of closing of each such Equity Offering. The Trustee
shall select the Notes to be purchased in the manner described in the Indenture.
7. MANDATORY REDEMPTION. Other than as set forth in paragraph 9, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the Redemption Date to each Holder whose Notes
are to be redeemed at its registered address. Notes may be redeemed in part but
only in whole multiples of $1,000. On and after the Redemption Date interest
ceases to accrue on Notes or portions thereof called for redemption.
9. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
the Notes at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder of Notes issued under the
Indenture, with a copy to the Trustee, containing the information set forth in
Section 4.09 of the Indenture. Holders of Notes that are subject to an offer to
purchase may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse side of this Note.
(b) When the aggregate amount of Excess Proceeds in connection with
Asset Sales by the Company exceeds $15 million, the Company shall make an offer
to all Holders of Notes (an "Asset Sale Offer") to purchase the maximum
principal amount of Notes that is an integral multiple of $1,000 that may be
purchased out of the Excess Proceeds at an offer price in cash equal to 100% of
the principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase in accordance with the procedures set forth in Section 3.10 of
the Indenture. The Company will commence an Asset Sale Offer with respect to
Excess Proceeds within ten Business Days after the date that Excess Proceeds
exceeds $15 million by mailing the notice required pursuant to the terms Section
3.10 of the Indenture, with a copy to the Trustee. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the
A-2-5
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of any such Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero. Holders of
Notes that are the subject of an offer to purchase will receive an Asset Sale
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse side of this Note.
10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $250,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
12. SUBORDINATION. Each Holder by accepting a Note agrees that the payment of
principal of, premium, if any, and interest on each Note is subordinated in
right of payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed, provided that such
creation, incurrence, assumption or guarantee is in accordance with the
provisions set forth in the Indenture), and this subordination provision is for
the benefit of the holders of Senior Indebtedness.
13. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and, subject to the terms of the Indenture and any
applicable Subsidiary Guarantee, any existing default (other than a default in
the payment of the principal of, premium, if any, or interest on, the Notes) or
compliance with any provision of the Indenture, the Notes or any Subsidiary
Guarantee may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes. Without the consent of any
Holder of a Note, the Indenture, the Notes and any Subsidiary Guarantee may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to comply with Article 5 of the Indenture, to provide for the assumption
of the Company's or any Subsidiary Guarantor's obligations to Holders of the
Notes, to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to add covenants for the benefit of the
Holders or to surrender any right or power conferred upon the Company, to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA, to add a Subsidiary Guarantor
under the Indenture, or to provide for the appointment of a successor trustee in
compliance with the requirements of Section 7.10 of the Indenture.
14. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default in payment when due and payable, upon redemption,
acceleration or otherwise, of principal of, or premium, if any, on the Notes
(whether or not such payment shall be prohibited by Article 10 of the Indenture
or the
A-2-6
terms of any Subsidiary Guarantee); (b) default for 30 days or more in the
payment when due of interest on or with respect to the Notes whether or not such
payment shall be prohibited by Article 10 of the Indenture or the terms of any
Subsidiary Guarantee; (c) failure by the Company or a Subsidiary Guarantor, if
any, for 30 days after receipt of written notice given by the Trustee or the
holders of at least 30% in principal amount of the Notes then outstanding to
comply with any of its other agreements in the Indenture, the Notes or the
Subsidiary Guarantees, if any; (d) default under any mortgage, indenture or
instrument under which there is issued or by which there is secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries (other than Indebtedness owed to the Company or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Issuance Date, if both (A) such default either (1) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (2) relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity and (B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity (after giving effect to any applicable grace
periods), or the maturity of which has been so accelerated, aggregate $15
million or more at any one time outstanding; (e) failure by the Company or any
of its Significant Subsidiaries to pay final, non-appealable judgments
aggregating in excess of $15 million, which final, non-appealable judgments
remain unpaid, undischarged and unstayed for a period of more than 60 days after
such judgment becomes final and non-appealable, and in the event such judgment
is covered by insurance, an enforcement proceeding has been commenced by any
creditor upon such judgment or decree which is not promptly stayed; (f) the
Company or any Restricted Subsidiary that is a Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary
case in which it is the debtor, (iii) consents to the appointment of a custodian
of it or for all or substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, or (v) admits in writing its
inability generally to pay its debts as the same become due; (g) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted Subsidiary that is a
Significant Subsidiary in an involuntary case in which it is the debtor, (ii)
appoints a custodian of the Company or any Restricted Subsidiary that is a
Significant Subsidiary or for all or substantially all of the property of the
Company of any Restricted Subsidiary that is a Significant Subsidiary; or (iii)
orders the liquidation of the Company or any Restricted Subsidiary that is a
Significant Subsidiary, and the order or decree contemplated in clauses (i),
(ii) or (iii) of this clause (g), remains unstayed and in effect for 60
consecutive days; or (h) any Subsidiary Guarantee shall for any reason cease to
be in full force and effect or be declared null and void or any responsible
officer of the Company or Subsidiary Guarantor denies that it has any further
liability under any such Subsidiary Guarantee or gives notice to such effect
(other than by reason of the termination of the Indenture or the release of any
such Subsidiary Guarantee in accordance with such Subsidiary Guarantee and the
Indenture).
If an Event of Default (other than of a type specified in clause (f) or
(g) in the preceding paragraph) occurs and is continuing under the Indenture,
the Trustee or the Holders of at least 30% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all the then outstanding Notes to be due and
payable immediately by notice in writing to the Company (and the Trustee, if
given by the Holders); provided, however, that, so long as any Indebtedness
permitted to be incurred pursuant to the New Credit Facility shall be
outstanding, no such acceleration shall be effective until the earlier of (i)
acceleration of any such Indebtedness under the New Credit Facility or (ii) five
business days after the giving of written notice to the Company and the
representative under the New Credit Facility of such acceleration. Upon the
effectiveness of such declaration, such principal, premium, interest and other
monetary obligations will be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising under clause (f) or (g) of
the preceding paragraph, all outstanding Notes will become due and payable
without further action or notice. Holders of Notes may not enforce the Indenture
or the Notes except as provided under the
A-2-7
Indenture. Subject to certain limitations, including the provision to the
Trustee of an indemnity in accordance with Section 7.07 of the Indenture,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal, premium, if any, or interest) if it determines that withholding
notice is in their interest. In addition, the Trustee shall have no obligation
to accelerate the Notes if in the best judgment of the Trustee acceleration is
not in the best interest of the Holders of such Notes.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, and may otherwise deal with the Company, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
any of these Notes waives and releases all such liability.
17. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP 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.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
A-2-8
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint____________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:________________
Your Signature:___________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
A-2-9
SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global Note for
an interest in another Global Note, or of other Restricted Global Notes for an
interest in this Regulation S Temporary Global Note, have been made:
Principal Amount
Amount of decrease in Amount of increase in of this Signature of
Principal Amount Principal Amount Global Note authorized officer of
of this of this following such decrease Trustee or Note
Date of Exchange Global Note Global Note (or increase) Custodian
---------------------- ----------------------- ------------------------ ------------------------ ----------------
X-0-00
XXXXXXX X-0
(Face of Unrestricted Note)
10 1/4% Senior Subordinated Notes due 2007
No. Cusip No:
KSL RECREATION GROUP, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
_______________________________ Dollars on __________, 2007.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Dated:___________,199_________ KSL RECREATION GROUP, INC.
By:
-------------------------
Name:
Title:
By:
-------------------------
Name:
Title:
This is one of the 10 1/4% Senior
Subordinated Notes due 2007
referred to in the within-mentioned
Indenture:
First Trust of New York, National Association
As Trustee
By: _____________________________
Authorized Signature
A-3-1
(Back of Unrestricted Note)
10 1/4% Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as may be
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as may be 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.]1
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. KSL Recreation Group, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 10.25% per
annum from April 30, 1997 unt l May 1, 2007. The Company shall pay interest
semi-annually in arrears on May 1 and November 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issuance Date; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be November 1, 1997. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate equal to the per annum rate on the Notes then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(inc xxxxx principal, premium, if any, and interest) by wire transfer of
immediately available funds to the accounts specified by the Note Custodian or,
at the option of the Company, payment of interest may be made by check mailed to
the Holders of the Notes at their respective addresses set forth in the register
of Holders of Notes. Notwithstanding the foregoing, all payments with respect to
the Notes (the Holders of which have provided wire transfer instructions to the
Company at least ten business days prior to the applicable payment date), will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the Holders thereof. Such payment shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, First Trust of New York, National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Notes may be presented for registration of transfer and exchange
at the offices of the Registrar. The Company may change any Paying Agent or
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
--------
1 This paragraph should be included only if the Note is a Global Note.
A-3-2
4. INDENTURE. The Company issued the Notes under an Indenture dated as of April
30, 1997 ("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 Trust Indenture Act of 1939, as amended (15 U.S. Code xx.xx.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $125,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the Notes will not be
redeemable at the Company's option prior to May 1, 2002. On and after May 1,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on May 1
of each of the years indicated below:
YEAR REDEMPTION
PRICE
2002.................................................. 105 .125%
2003.................................................. 103.417%
2004.................................................. 101.708%
2005 and thereafter................................... 100.000%
In addition, at any time or from time to time, on or prior to May 1,
2001, the Company may, at its option, redeem up to 50% of the aggregate
principal amount of Notes originally issued under the Indenture on the Issuance
Date at a Redemption Price equal to 110.25% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the Redemption
Date, with the n t cash proceeds of one or more Equity Offerings; provided that
at least 50% of the aggregate principal amount of Notes originally issued under
the Indenture on the Issuance Date remains outstanding immediately after the
occurrence of such redemption; provided further that such redemption occurs
within 60 days of the date of closing of each such Equity Offering. The Trustee
shall select the Notes to be purchased in the manner described in the Indenture.
6. MANDATORY REDEMPTION. Other than as set forth in paragraph 8, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days
but not more than 60 days before the redemption date to each Holder whose Notes
are to be redeemed at its registered address. Notes may be redeemed in part but
only in whole multiples of $1,000. On and after the redemption date interest
ceases to accrue on Notes or portions thereof called for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. Upon the occurrence of a Change of Control,
the Company shall make an offer (a "Change of Control Offer") to repurchase all
or any part (equal to $1,000 or an integral multiple thereof) of the Notes at a
price in cash equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder of Notes issued under the Indenture, with a
copy to the Trustee, containing the information set forth in Section 4.09 of the
Indenture. Holders of Notes that are subject to an offer to purchase may elect
to have such Notes purchased by completing the form entitled "Option of Holder
to Elect Purchase" on the reverse side of this Note.
(b) When the aggregate amount of Excess Proceeds exceeds $15 million,
the Company shall make an offer to all Holders of Notes (an "Asset Sale Offer")
to purchase the maximum principal amount of Notes that is an integral multiple
of $1,000 that may be purchased out of the Excess Proceeds at an offer price in
cash equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the
A-3-3
date of purchase in accordance with the procedures set forth in Section 3.10 of
the Indenture. The Company will commence an Asset Sale Offer with respect to
Excess Proceeds within ten Business Days after the date that Excess Proceeds
exceeds $15 million by mailing the notice required pursuant to the terms of this
Indenture, with a copy to the Trustee. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse side of this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $250,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
11. SUBORDINATION. Each Holder by accepting a Note agrees that the payment of
principal of, premium, if any, and interest on each Note is subordinated in
right of payment, to the extent and in the manner provided in Article 10 of the
Indenture, to the prior payment in full in cash or Cash Equivalents of all
Senior Indebtedness (whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed, provided that such
creation, incurrence, assumption or guarantee is in accordance with the
provisions set forth in the Indenture), and this subordination provision is for
the benefit of the holders of Senior Indebtedness.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes, and, subject to the terms of the Indenture and any
applicable Subsidiary Guarantee, any existing default (other than a default in
the payment of the principal of, premium, if any, or interest on, the Notes) or
compliance with any provision of the Indenture, the Notes or any Subsidiary
Guarantee may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes. Without the consent of any
Holder of a Note, the Indenture, the Notes and any Subsidiary Guarantee may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to comply with Article 5 of the Indenture, to provide for the assumption
of the Company's or any Subsidiary Guarantor's obligations to Holders of the
Notes, to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to add covenants for the benefit of the
Holders or to surrender any right or power conferred upon the Company, to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA, to add a Subsidiary Guarantor
under the Indenture, or to provide for the appointment of a successor trustee in
compliance with the requirements of Section 7.10 of the Indenture.
A-3-4
13. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event
of Default": (a) default in payment when due and payable, upon redemption,
acceleration or otherwise, of principal of, or premium, if any, on the Notes (
hether or not such payment shall be prohibited by Article 10 of the Indenture or
the terms of any Subsidiary Guarantee); (b) default for 30 days or more in the
payment when due of interest on or with respect to the Notes whether or not such
payment shall be prohibited by Article 10 of the Indenture or the terms of any
Subsidiary Guarantee; (c) failure by the Company or a Subsidiary Guarantor, if
any, for 30 days after receipt of written notice given by the Trustee or the
holders of at least 30% in principal amount of the Notes then outstanding to
comply with any of its other agreements in the Indenture, the Notes or the
Subsidiary Guarantees, if any; (d) default under any mortgage, indenture or
instrument under which there is issued or by which there is secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries (other than Indebtedness owed to the Company or a
Restricted Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Issuance Date, if both (A) such default either (1) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (2) relates to an
obligation other than the obligation to pay principal of any such Indebtedness
at its stated final maturity and results in the holder or holders of such
Indebtedness causing such Indebtedness to become due prior to its stated final
maturity and (B) the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness in default for failure to pay
principal at stated final maturity (after giving effect to any applicable grace
periods), or the maturity of which has been so accelerated, aggregate $15
million or more at any one time outstanding; (e) failure by the Company or any
of its Significant Subsidiaries to pay final, non-appealable judgments
aggregating in excess of $15 million, which final, non-appealable judgments
remain unpaid, undischarged and unstayed for a period of more than 60 days after
such judgment becomes final and non-appealable, and in the event such judgment
is covered by insurance, an enforcement proceeding has been commenced by any
creditor upon such judgment or decree which is not promptly stayed; (f) the
Company or any Restricted Subsidiary that is a Significant Subsidiary pursuant
to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary
case in which it is the debtor, (iii) consents to the appointment of a custodian
of it or for all or substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, or (v) admits in writing its
inability generally to pay its debts as the same become due; (g) a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted Subsidiary that is a
Significant Subsidiary in an involuntary case in which it is the debtor, (ii)
appoints a custodian of the Company or any Restricted Subsidiary that is a
Significant Subsidiary or for all or substantially all of the property of the
Company of any Restricted Subsidiary that is a Significant Subsidiary; or (iii)
orders the liquidation of the Company or any Restricted Subsidiary that is a
Significant Subsidiary, and the order or decree contemplated in clauses (i),
(ii) or (iii) of this clause (g), remains unstayed and in effect for 60
consecutive days; or (h) any Subsidiary Guarantee shall for any reason cease to
be in full force and effect or be declared null and void or any responsible
officer of the Company or Subsidiary Guarantor denies that it has any further
liability under any such Subsidiary Guarantee or gives notice to such effect
(other than by reason of the termination of the Indenture or the release of any
such Subsidiary Guarantee in accordance with such Subsidiary Guarantee and the
Indenture).
If an Event of Default (other than of a type specified in clause (f) or
(g) in the preceding paragraph) occurs and is continuing under the Indenture,
the Trustee or the Holders of at least 30% in principal amount of the then
outstanding Notes may declare the principal, premium, if any, interest and any
other monetary obligations on all the then outstanding Notes to be due and
payable immediately by notice in writing to the Company (and the Trustee, if
given by the Holders); provided, however, that, so long as any Indebtedness
permitted to be incurred pursuant to the New Credit Facility shall be
outstanding, no such acceleration shall be effective until the earlier of (i)
acceleration of any such Indebtedness under the New Credit Facility or (ii) five
business days after the giving of written notice to the Company and the
representative under the New Credit Facility of such acceleration. Upon the
effectiveness of such declaration, such principal, premium, interest and other
monetary obligations will be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising under clause (f) or
A-3-5
(g) of the preceding paragraph, all outstanding Notes will become due and
payable without further action or notice. Holders of Notes may not enforce the
Indenture or the Notes except as provided under the Indenture. Subject to
certain limitations, including the provision to the Trustee of an indemnity in
accordance with Section 7.07 of the Indenture, Holders of a majority in
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of Notes
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal, premium, if any, or interest)
if it determines that withholding notice is in their interest. In addition, the
Trustee shall have no obligation to accelerate the Notes if in the best judgment
of the Trustee acceleration is not in the best interest of the Holders of such
Notes.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company, and may otherwise deal with the Company, as if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
any of these Notes waives and releases all such liability.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP 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.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
A-3-6
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
First Trust of New York, National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Re: 10 1/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of April 30, 1997
(the "Indenture"), between KSL Recreation Group, Inc., as issuer (the
"Company"), and First Trust of New York, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.|_|CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A
GLOBAL NOTE OR A RESTRICTED DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Restricted Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Restricted Definitive Note and in the Indenture
and the Securities Act.
2.|_|CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE
TEMPORARY REGULATION S GLOBAL NOTE, THE REGULATION S GLOBAL NOTE OR A RESTRICTED
DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting on its behalf reasonably believed and believes
that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities
market and neither such Transferor nor any Person acting on its behalf knows
that the transaction was prearranged with a buyer in the United States, (ii) no
directed selling efforts have been made in contravention of the requirements of
Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act and (iv) if the proposed transfer is being
made prior to the expiration of the Restricted Period, the transfer is not being
made to a U.S. Person or for the account or benefit of a U.S. Person (other than
an Initial Purchaser). Upon consummation of the proposed transfer in
B-1
accordance with the terms of the Indenture, the transferred beneficial interest
or Restricted Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note, the Temporary Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act.
3.|_|CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A RESTRICTED
DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE
144A OR REGULATION S. The Transfer is being effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a)|_|such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b)|_|such Transfer is being effected to the Company or a Subsidiary
thereof;
or
(c)|_|such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d)|_|such Transfer is being effected to an Accredited Investor and
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby
further certifies that the Transfer complies with the transfer restrictions
applicable to Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is
in respect of a principal amount of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification), to the effect
that such Transfer is in compliance with the Securities Act. Upon consummation
of the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Restricted Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Notes and in the Indenture and the Securities Act.
4.|_|CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN
UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a)|_|CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Unrestricted
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b)|_|CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of
B-2
the proposed Transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Unrestricted Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(c)|_|CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Unrestricted Definitive Note will not be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
-------------------
Name:
Title:
Dated:____________,______
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a)|_|a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP _____), or
(ii) |_| Regulation S Global Note
(CUSIP/CINS ___), or
(b)|_|a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a)|_|a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP _______), or
(ii) |_| Regulation S Global Note
(CUSIP/CINS ______), or
(iii) |_| Unrestricted Global Note
(CUSIP ______); or
(b)|_|a Restricted Definitive Note; or
(c)|_|an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
First Trust of New York, National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Re: 10 1/4% Senior Subordinated Notes due 2007 (CUSIP )
Reference is hereby made to the Indenture, dated as of April 30, 1997
(the "Indenture"), between KSL Recreation Group, Inc. as issuer (the "Company"),
and First Trust of New York, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
____________, (the "Owner") owns and proposes to exchange the Note[s]
or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
0.XXXXXXXX OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A
RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN AN UNRESTRICTED GLOBAL NOTE
(a)|_|CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b)|_|CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Unrestricted Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state of the
United States.
(c)|_|CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in
C-1
accordance with the Securities Act, (iii) the restrictions on transfer contained
in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws of any
state of the United States.
(d)|_|CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
0.XXXXXXXX OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED
GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES
(a)|_|CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b)|_|CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] |_| 144A Global Note or |_| Regulation S Global Note, with an equal
principal amount, the Owner hereby certifies (i) such Owner acquired such
Restricted Definitive Note in a transaction pursuant to Rule 144A or Regulation
S, (ii) the beneficial interest is being acquired for the Owner's own account
without transfer and (iii) such Exchange has been effected in compliance with
the transfer restrictions applicable to the Restricted Global Notes and pursuant
to and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the beneficial interest issued will be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the relevant
Restricted Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
------------------------
[Insert Name of Owner]
By:
---------------------
Name:
Title:
Dated: ___________,______
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
KSL Recreation Group, Inc.
00-000 XXX Xxxxxxxxx
Xx Xxxxxx, Xxxxxxxxxx 00000
First Trust of New York, National Association
000 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Re: 10 1/4% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of April 30, 1997
(the "Indenture"), between KSL Recreation Group, Inc., as issuer (the
"Company"), and First Trust of New York, National Association, as trustee.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of Restricted Definitive Notes we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under the
Securities Act, and that the Notes and any interest therein may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of each account for which we acquire any Notes (for which
are acting as hereinafter stated), that such Notes may be offered, resold,
pledged or otherwise transferred only (i) to a person whom we reasonably believe
to be a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so Requests), (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We further agreement to provide to any person
purchasing the Definitive Note or a beneficial interest in a Global Note from us
in a transaction meeting the requirements of (i) or (ii) of this paragraph a
notice advising such purchaser that resales thereof are restricted as stated
herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
D-1
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes without a view to distribution thereof in
violation of the Securities Act for our own account or for one or more accounts
(each of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
By:
---------------------
Name:
Title:
Dated: ___________,______
D-2
EXHIBIT E
FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY SUBSIDIARY GUARANTORS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of
____________________, between _____________________ (the "Subsidiary
Guarantor"), a subsidiary of KSL Recreation Group, Inc. (or its successor), a
company incorporated under the laws of the State of Delaware (the "Company"),
and First Trust of New York, National Association, as trustee under the
indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of April 30 1997, providing for
the issuance of an aggregate principal amount at maturity of $125,000,000 of 10
1/4% Senior Subordinated Notes due 2007 (the "Notes");
WHEREAS, Section 4.12 of the Indenture provides that the Company may
cause the Subsidiary Guarantor to execute and deliver to the Trustee a
subsidiary guarantee on the terms and conditions set forth herein;
WHEREAS, Section 4.15 of the Indenture provides that, under certain
circumstances, the Company is required to cause the Subsidiary Guarantor to
execute and deliver to the Trustee a Subsidiary Guarantee on the terms and
conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Subsidiary Guarantor and the Trustee mutually covenant and agree for the equal
and ratable benefit of the holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings as signed to them in the Indenture.
2. INDENTURE PROVISION PURSUANT TO WHICH GUARANTEE IS GIVEN. This
Supplemental Indenture is being executed and delivered pursuant to Section
[4.12][4.15] of the Indenture.
3. AGREEMENTS TO GUARANTEE. The Subsidiary Guarantor hereby agrees as
follows:
(a) The Subsidiary Guarantor, jointly and severally with all
other Subsidiary Guarantors, if any, unconditionally guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, regardless of the validity and enforceability of the
Indenture, the Notes and the obligations of the Company under the Indenture and
the Notes, that:
(i) the principal of, premium, if any, and interest
on the Notes shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium, if any, and interest on the Notes, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee thereunder shall be
promptly paid in full, all in accordance with the terms thereof; and
(ii) in case of any extension of time for payment or
renewal of any Notes or any of such other obligations, that the same shall be
promptly paid in full when due in accordance with the terms of the extension or
renewal, whether at Stated Maturity, by acceleration or otherwise.
E-1
Notwithstanding the foregoing, in the event that this Subsidiary
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under this Supplemental Indenture and its Subsidiary
Guarantee shall be limited to such amount as will not, after giving effect
thereto, and to all other liabilities of the Subsidiary Guarantor, result in
such amount constituting a fraudulent transfer or conveyance.
4. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES
(a) To evidence its Subsidiary Guarantee set forth in this
Supplemental Indenture, the Subsidiary Guarantor hereby agrees that a notation
of such Subsidiary Guarantee substantially in the form of Annex A hereto shall
be endorsed by an officer of such Subsidiary Guarantor on each Note
authenticated and delivered by the Trustee after the date hereof.
(b) Notwithstanding the foregoing, the Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth herein shall remain in
full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.
(c) If an officer whose signature is on this Supplemental
Indenture or on the Subsidiary Guarantee no longer holds that office at the time
the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed,
the Subsidiary Guarantee shall be valid nevertheless.
(d) The delivery of the Note by the Trustee, after the
authentication thereof under the Indenture, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Supplemental Indenture on behalf of the
Subsidiary Guarantor.
(e) The Subsidiary Guarantor hereby agrees that its
obligations hereunder shall be unconditional, regardless of the validity,
regularity or enforceability of the Notes or the Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgement
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
(f) The Subsidiary Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that its Subsidiary Guarantee made pursuant to this Supplemental Indenture will
not be discharged except by complete performance of the obligations contained in
the Notes and the Indenture or pursuant to Section 5(b) of this Supplemental
Indenture.
(g) If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Supplemental Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then, and in every such
case, subject to any determination in such proceeding, the Subsidiary Guarantor,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Subsidiary Guarantor, the Trustee and the Holders shall continue as though no
such proceeding had been instituted.
(h) The Subsidiary Guarantor hereby waives and will not in any
manner whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary Guarantor as a result of any payment by such Subsidiary
Guarantor under its Subsidiary Guarantee. The Subsidiary Guarantor further
agrees that, as between the Subsidiary Guarantors, on the one hand, and the
Holders and the Trustee, on the other hand:
E-2
(i) the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article Six of the Indenture for the purposes
of the Subsidiary Guarantee made pursuant to this Supplemental Indenture,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby; and
(ii) in the event of any declaration of acceleration
of such obligations as provided in Article Six, such obligations (whether or not
due and payable) shall forthwith become due and payable by the Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee made pursuant to this
Supplemental Indenture.
(i) The Subsidiary Guarantor shall have the right to seek
contribution from any other non-paying Subsidiary Guarantor, if any, so long as
the exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantee made pursuant to this Supplemental Indenture.
(j) The Subsidiary Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
which may affect the covenants or the performance of the Indenture or this
Subsidiary Guarantee; and the Subsidiary Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
5. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS
(a) Except as set forth in Articles Four and Five of the
Indenture, nothing contained in the Indenture, this Supplemental Indenture or in
the Notes shall prevent any consolidation or merger of the Subsidiary Guarantor
with or into the Company or any other Subsidiary Guarantor or shall prevent any
transfer, sale or conveyance of the property of the Subsidiary Guarantor as an
entirety or substantially as an entirety, to the Company or any other Subsidiary
Guarantor.
(b) Except as set forth in Article Five of the Indenture, upon
the sale or disposition of all of the Capital Stock of the Subsidiary Guarantor
by the Company or the Subsidiary of the Company, or upon the consolidation or
merger of the Subsidiary Guarantor with or into any Person, or the sale of all
or substantially all of the assets of the Subsidiary Guarantor (in each case,
other than to an Affiliate of the Company), such Subsidiary Guarantor shall be
deemed automatically and unconditionally released and discharged from all
obligations under this Subsidiary Guarantee without any further action required
on the part of the Trustee or any Holder if no Default shall have occurred and
be continuing; provided, that in the event of an Asset Sale, the Net Cash
Proceeds therefrom are treated in accordance with Section 4.10 of the Indenture.
Except with respect to transactions set forth in the preceding sentence, the
Company and the Subsidiary Guarantor covenant and agree that upon any such
consolidation, merger or transfer of assets, the performance of all covenants
and conditions of this Supplemental Indenture to be performed by such Subsidiary
Guarantor shall be expressly assumed by supplemental indenture satisfactory in
form to the Trustee, by the corporation formed by such consolidation, or into
which the Subsidiary Guarantor shall have merged, or by the corporation which
shall have acquired such property. Upon receipt of an Officer's Certificate of
the Company or the Subsidiary Guarantor, as the case may be, to the effect that
the Company or such Subsidiary Guarantor has complied with the first sentence of
this Section 5(b), the Trustee shall execute any documents reasonably requested
by the Company or the Subsidiary Guarantor, at the cost of the Company or such
Subsidiary Guarantor, as the case may be, in order to evidence the release of
such Subsidiary Guarantor from its obligations under its Guarantee endorsed on
the Notes and under the Indenture and this Supplemental Indenture.
E-3
[6. RELEASES UPON RELEASE OF GUARANTEE OF GUARANTEED INDEBTEDNESS.
Concurrently with the releasee or discharge of the Subsidiary Guarantor's
guarantee of the payment of [describe indebtedness the guarantee of which gave
rise to the delivery of this Supplemental Indenture] ("Guaranteed Debt") (other
than a release or discharge by or as a result of payment under such guarantee of
Guaranteed Indebtedness), the Subsidiary Guarantor shall be automatically and
unconditionally released and relieved of its obligations under this Supplemental
Indenture and its Subsidiary Guarantee made pursuant to Section 4 of this
Supplemental Indenture. Upon delivery by the Company to the Trustee of an
Officer's Certificate to the effect that such release or discharge has occurred,
the Trustee shall execute any documents reasonably required in order to evidence
the release of the Subsidiary Guarantor from its obligations under this
Supplemental Indenture and its Subsidiary Guarantee made pursuant hereto;
provided such documents shall not affect or impair the rights of the Trustee and
Paying Agent under Section 7.07 of the Indenture.]2
7. SUBORDINATION.
(a) AGREEMENT TO SUBORDINATE. The Subsidiary Guarantor agrees,
and each Holder by accepting this Subsidiary Guarantee agrees, that the payment
of the Subordinated Note Obligations by the Subsidiary Guarantor shall be
subordinated in right of payment, as set forth in this Section 7, to the prior
payment in full in cash or Cash Equivalents of all Guarantor Senior Indebtedness
of such Subsidiary Guarantor whether outstanding on the date hereof or hereafter
incurred.
(b) LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any
distribution to creditors of the Subsidiary Guarantor in a liquidation or
dissolution of the Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Subsidiary
Guarantor or its property, an assignment for the benefit of creditors or any
marshalling of the Subsidiary Guarantor's assets and liabilities, the holders of
Guarantor Senior Indebtedness of the Subsidiary Guarantor shall be entitled to
receive payment in full in cash or Cash Equivalents of such Guarantor Senior
Indebtedness (including interest after the commencement of any such proceeding
at the rate specified in the applicable Guarantor Senior Indebtedness) before
the Holders will be entitled to receive any payment by the Subsidiary Guarantor
with respect to the Subordinated Note Obligations (except that holders of Notes
may receive (i) Equity Interests of the Company and any debt securities of the
Company that are subordinated at least to the same extent as the Notes to (a)
Senior Indebtedness and (b) any Indebtedness issued in exchange for Senior
Indebtedness and (ii) payments made from the trusts described in Article 8 of
the Indenture), and until all Guarantor Senior Indebtedness of the Subsidiary
Guarantor is paid in full in cash or Cash Equivalents, any distribution to which
the Holders of Notes would be entitled shall be made to the holders of such
Guarantor Senior Indebtedness (except that holders of Notes may receive (i)
Equity Interests of the Company and any debt securities of the Company that are
subordinated at least to the same extent as the Notes to (a) Senior Indebtedness
and (b) any Indebtedness issued in exchange for Senior Indebtedness and (ii)
payments made from the trusts described in Article 8 of the Indenture).
(c) DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS. The Subsidiary Guarantor
may not make any payment upon or in respect of the Subordinated Note Obligations
(except that holders of Notes may receive (i) Equity Interests of the Company
and any debt securities of the Company that are subordinated at least to the
same extent as the Notes to (a) Senior Indebtedness and (b) any Indebtedness
issued in exchange for Senior Indebtedness and (ii) payments made from the
trusts described in Article 8 of the Indenture) if: (i) a default in the payment
of the principal of, premium, if any, or interest on, or of unreimbursed amounts
under letters of credit or fees relating to letters of credit and commitments to
extend credit constituting Designated Senior Indebtedness of the Subsidiary
Guarantor occurs and is continuing beyond any applicable period of grace (a
"payment default") or (ii) any other default occurs and is
--------
2. To be included if the Supplemental Indenture is executed and delivered
pursuant to Section 4.15 of the Indenture.
E-4
continuing with respect to Designated Senior Indebtedness of the Subsidiary
Guarantor that permits holders of such Designated Senior Indebtedness as to
which such default relates to accelerate its maturity (a "non-payment default")
and the Trustee receives a notice of such default (a "Payment Blockage Notice")
from a representative of such Designated Senior Indebtedness. No new period of
payment blockage may be commenced unless and until (i) 365 days have elapsed
since the effectiveness of the immediately preceding Payment Blockage Notice
(provided that, if any Payment Blockage Notice is given by or on behalf of any
holders of Designated Senior Indebtedness (other than the representative under
the New Credit Facility), within such 365 day period, the representative under
the New Credit Facility may give another Payment Blockage Notice within such
period) and (ii) all scheduled payments of principal, premium, if any, and
interest on the Notes that have come due have been paid in full in cash. In no
event, however, may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 365
consecutive day period. No non-payment 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 such default
shall have been cured for a period of not less than 90 days.
The Subsidiary Guarantor may and shall resume payments on the Notes
(including any missed payments): (a) in the case of a payment default described
in clause (i) above, upon the date on which such default is cured or waived or
shall have ceased to exist or such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or Cash Equivalents; and (b) in the case
of a non-payment default described in clause (ii) above, the earlier of (x) the
date on which such nonpayment default is cured or waived, (y) 179 days after the
date on which the applicable Payment Blockage Notice is received (each such
period, the "Payment Blockage Period") or (z) the date such Payment Blockage
Period shall be terminated by written notice to the Trustee from the requisite
holders of such Designated Senior Indebtedness necessary to terminate such
period or from their representative.
(d) ACCELERATION OF SECURITIES. If the Subsidiary Guarantor fails to
make any payment on the Notes when due or within any applicable grace period,
whether or not on account of the payment blockage provision referred to above,
such failure shall constitute an Event of Default and shall entitle the holders
of the Notes to accelerate the maturity thereof.
(e) WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Trustee
or any Holder receives any payment of any Subordinated Note Obligations at a
time when the Trustee or such Holder, as applicable, has actual knowledge that
such payment is prohibited by Section (b) or (c) above, such payment shall be
held by the Trustee or such Holder, in trust for the benefit of, and shall be
paid forthwith over and delivered, upon written request, to, the holders of
Guarantor Senior Indebtedness of the Subsidiary Guarantor as their interests may
appear or their representative under the indenture or other agreement (if any)
pursuant to which such Guarantor Senior Indebtedness may have been issued, as
their respective interests may appear, for application to the payment of all
Obligations with respect to such Guarantor Senior Indebtedness remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Guarantor Senior Indebtedness of the Subsidiary Guarantor.
In the event that any Holder receives any payment of any Subordinated
Note Obligations at any time when such payment is prohibited by Section (b) or
(c) above, such payment shall be held by such Holder, in trust for the benefit
of, and shall be paid forthwith over and delivered, upon written request to, the
Holders of Guarantor Senior Indebtedness of the Subsidiary Guarantor as their
interest may appear or their representative under the indenture or other
agreement (if any) pursuant to which such Guarantor Senior Indebtedness may have
been issued, as their interest may appear, for the application to the payment of
all Obligations with respect to such Guarantor Senior Indebtedness remaining
unpaid to the extend necessary to pay such Obligations in full accordance with
their terms, after giving effect to any concurrent payment or distribution to or
for the holders of Guarantor Senior Indebtedness of the Subsidiary Guarantor.
E-5
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Section 7, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Guarantor Senior Indebtedness, and shall
not be liable to any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders or the Subsidiary Guarantor or any other Person money or
assets to which any holders of Guarantor Senior Indebtedness shall be entitled
by virtue of this Section 7, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
(f) NOTICE BY SUBSIDIARY GUARANTOR. The Subsidiary Guarantor shall
promptly notify the Trustee and the Paying Agent of any facts known to the
Subsidiary Guarantor that would cause a payment of any Subordinated Note
Obligations to violate this Section 7, but failure to give such notice shall not
affect the subordination of this Subsidiary Guarantor to Guarantor Senior
Indebtedness as provided in this Section 7.
(g) SUBROGATION. After all Guarantor Senior Indebtedness is paid in
full and until the Notes are paid in full in cash, Holders of Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Guarantor Senior Indebtedness to receive
distributions applicable to Guarantor Senior Indebtedness to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Guarantor Senior Indebtedness. A distribution made under this Section
7 to holders of Guarantor Senior Indebtedness that otherwise would have been
made to Holders of Notes is not, as between the Subsidiary Guarantor and
Holders, a payment by the Subsidiary Guarantor on the Guarantor Senior
Indebtedness.
(h) RELATIVE RIGHTS. This Section 7 defines the relative rights of
Holders of Notes and holders of Guarantor Senior Indebtedness. Nothing in this
Subsidiary Guarantee shall: (1) impair, as between the Subsidiary Guarantor and
Holders of Notes, the obligation of the Subsidiary Guarantor, which is absolute
and unconditional, to pay principal of, premium, if any, and interest on the
Notes in accordance with their terms; (2) affect the relative rights of Holders
of Notes and creditors of the Subsidiary Guarantor other than their rights in
relation to holders of Guarantor Senior Indebtedness; or (3) prevent the Trustee
or any Holder of Notes from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and owners of Guarantor
Senior Indebtedness to receive distributions and payments otherwise payable to
Holders of Notes.
If the Subsidiary Guarantor fails because of this Section 7 to pay
principal of, premium, if any, or interest on a Note on the due date, the
failure is nevertheless a Default or an Event of Default.
(i) SUBORDINATION MAY NOT BE IMPAIRED BY SUBSIDIARY GUARANTOR. No right
of any holder of Guarantor Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Notes shall be impaired by any act or failure
to act by the Subsidiary Guarantor or any Holder or by the failure of the
Subsidiary Guarantor or any Holder to comply with this Indenture.
(j) DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution
is to be made or a notice given to holders of Guarantor Senior Indebtedness, the
distribution may be made and the notice given to their representative.
Upon any payment or distribution of assets of the Subsidiary Guarantor
referred to in this Section 7, the Trustee and the Holders of Notes shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Guarantor
Senior Indebtedness and other Indebtedness of the Subsidiary Guarantor, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Section 7.
E-6
(k) RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions
of this Section 7 or any provision of the Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment or distribution by the Trustee, and the Trustee and the
Paying Agent may continue to make payments on the Notes, unless the Trustee
shall have received at its Corporate Trust Office at least five Business Days
prior to the date of such payment written notice of facts that would cause the
payment of any Subordinated Note Obligations to violate this Section 7. Only the
Subsidiary Guarantor or a representative may give the notice. Nothing in this
Section 7 shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 of the Indenture.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
(l) AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of Notes, by the
Holder's acceptance thereof, authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Section 7, and appoints the Trustee to act as
such Holder's attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 of the Indenture at least 30 days
before the expiration of the time to file such claim, a representative of
Designated Senior Indebtedness is hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
8. NEW YORK LAW TO GOVERN. The internal law of the State of New York
shall govern and be used to construe this Supplemental Indenture.
9. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not effect the construction hereof.
E-7
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: ___________,____________ [SUBSIDIARY GUARANTOR]
By:
--------------------------
Name:
Title:
Dated: ___________,____________
as Trustee
By:
--------------------------
Name:
Title:
E-8
ANNEX A TO SUPPLEMENTAL INDENTURE
FORM OF NOTATION OF SUBSIDIARY GUARANTEE ON NOTE
Each Subsidiary Guarantor (as defined in the Indenture) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes, whether at Stated
Maturity or an Interest Payment Date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue principal
and premium of, and interest, to the extent lawful, on the Notes and (c) that in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, the same will be promptly paid in full when due in accordance
with the terms of the extension of renewal, whether at stated maturity, by
acceleration or otherwise.
Notwithstanding the foregoing, in the event that the Subsidiary
Guarantee would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of the
Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to such
amount as will not, after giving effect thereto, and to all other liabilities of
the Subsidiary Guarantor, result in such amount constituting a fraudulent
transfer or conveyance.
The Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual or facsimile signature of one of its authorized
officers.
Dated: ___________,____________ [SUBSIDIARY GUARANTOR]
By:
--------------------------
Name:
Title:
E-9
