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COMPASS AEROSPACE CORPORATION
Issuer,
and
IBJ WHITEHALL BANK & TRUST COMPANY
Trustee
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INDENTURE
Dated as of July 30, 1999
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$19,000,000
101/8% Senior Subordinated Notes due 2005
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions........................................................................................1
SECTION 1.2. Incorporation by Reference of TIA.................................................................20
SECTION 1.3. Rules of Construction.............................................................................20
ARTICLE II
THE SECURITIES
SECTION 2.1. Form and Dating...................................................................................21
SECTION 2.2. Execution and Authentication......................................................................22
SECTION 2.3. Registrar and Paying Agent........................................................................22
SECTION 2.4. Paying Agent to Hold Assets in Trust..............................................................22
SECTION 2.5. Securityholder Lists..............................................................................23
SECTION 2.6. Transfer and Exchange.............................................................................23
SECTION 2.7. Replacement Securities............................................................................28
SECTION 2.8. Outstanding Securities............................................................................28
SECTION 2.9. Treasury Securities...............................................................................29
SECTION 2.10. Temporary Securities..............................................................................29
SECTION 2.11. Cancellation......................................................................................29
SECTION 2.12. Defaulted Interest................................................................................29
SECTION 2.13. CUSIP Numbers.....................................................................................30
ARTICLE III
REDEMPTION
SECTION 3.1. Right of Redemption...............................................................................30
SECTION 3.2. Notices to Trustee................................................................................31
SECTION 3.3. Selection of Securities to Be Redeemed............................................................31
SECTION 3.4. Notice of Redemption..............................................................................32
SECTION 3.5. Effect of Notice of Redemption....................................................................32
SECTION 3.6. Deposit of Redemption Price.......................................................................33
SECTION 3.7. Securities Redeemed in Part.......................................................................33
ARTICLE IV
COVENANTS
SECTION 4.1. Payment of Securities.............................................................................33
SECTION 4.2. Maintenance of Office or Agency...................................................................34
SECTION 4.3. Limitation on Restricted Payments.................................................................34
SECTION 4.4. Corporate and Partnership Existence...............................................................35
SECTION 4.5. Payment of Taxes and Other Claims.................................................................35
SECTION 4.6. Maintenance of Properties and Insurance...........................................................36
SECTION 4.7. Compliance Certificate; Notice of Default.........................................................36
SECTION 4.8. Reports...........................................................................................36
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SECTION 4.9. Limitation on Status as Investment Company........................................................37
SECTION 4.10. Limitation on Transactions with Affiliates........................................................37
SECTION 4.11. Limitation on Incurrence of Additional Indebtedness and
Disqualified Capital Stock...............................................................37
SECTION 4.12. Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries...................................................................38
SECTION 4.13. Limitations on Layering Indebtedness..............................................................39
SECTION 4.14. Limitation on Sales of Assets and Subsidiary Stock................................................39
SECTION 4.15. Waiver of Stay, Extension or Usury Laws...........................................................43
SECTION 4.16. Limitation on Liens Securing Indebtedness.........................................................43
SECTION 4.17. Rule 144A Information Requirement.................................................................43
SECTION 4.18. Limitations on Lines of Business..................................................................43
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. Limitation on Merger, Sale or Consolidation.......................................................44
SECTION 5.2. Successor Corporation Substituted.................................................................44
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. Events of Default.................................................................................45
SECTION 6.2. Acceleration of Maturity Date; Rescission and Annulment...........................................46
SECTION 6.3. Collection of Indebtedness and Suits for Enforcement by Trustee...................................47
SECTION 6.4. Trustee May File Proofs of Claim..................................................................47
SECTION 6.5. Trustee May Enforce Claims Without Possession of Securities.......................................48
SECTION 6.6. Priorities........................................................................................48
SECTION 6.7. Limitation on Suits...............................................................................49
SECTION 6.8. Unconditional Right of Holders to Receive Principal, Premium and Interest.........................49
SECTION 6.9. Rights and Remedies Cumulative....................................................................49
SECTION 6.10. Delay or Omission Not Waiver......................................................................50
SECTION 6.11. Control by Holders................................................................................50
SECTION 6.12. Waiver of Existing or Past Default................................................................50
SECTION 6.13. Undertaking for Costs.............................................................................50
SECTION 6.14. Restoration of Rights and Remedies................................................................51
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee.................................................................................51
SECTION 7.2. Rights of Trustee.................................................................................52
SECTION 7.3. Individual Rights of Trustee......................................................................53
SECTION 7.4. Trustee's Disclaimer..............................................................................53
SECTION 7.5. Notice of Default.................................................................................53
SECTION 7.6. Reports by Trustee to Holders.....................................................................54
SECTION 7.7. Compensation and Indemnity........................................................................54
SECTION 7.8. Replacement of Trustee............................................................................55
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PAGE
SECTION 7.9. Successor Trustee by Merger, Etc..................................................................55
SECTION 7.10. Eligibility; Disqualification.....................................................................56
SECTION 7.11. Preferential Collection of Claims Against Company.................................................56
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. Discharge; Option to Effect Legal Defeasance or Covenant Defeasance...............................56
SECTION 8.2. Legal Defeasance and Discharge....................................................................56
SECTION 8.3. Covenant Defeasance...............................................................................57
SECTION 8.4. Conditions to Legal or Covenant Defeasance........................................................57
SECTION 8.5. Deposited Cash and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions..................................................................58
SECTION 8.6. Repayment to the Company..........................................................................59
SECTION 8.7. Reinstatement.....................................................................................59
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. Supplemental Indentures Without Consent of Holders................................................59
SECTION 9.2. Amendments, Supplemental Indentures and Waivers with Consent of Holders...........................60
SECTION 9.3. Compliance with TIA...............................................................................61
SECTION 9.4. Revocation and Effect of Consents.................................................................61
SECTION 9.5. Notation on or Exchange of Securities.............................................................62
SECTION 9.6. Trustee to Sign Amendments, Etc...................................................................62
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. Repurchase of Securities at Option of the Holder Upon a Change of Control.........................62
ARTICLE XI
GUARANTEE
SECTION 11.1. Guarantee........................................................................................65
SECTION 11.2. Execution and Delivery of Guarantee..............................................................66
SECTION 11.3. Certain Bankruptcy Events........................................................................66
SECTION 11.4. Limitation on Merger of Subsidiaries and Release of Guarantors...................................67
ARTICLE XII
SUBORDINATION
SECTION 12.1. Securities Subordinated to Senior Debt...........................................................67
SECTION 12.2. No Payment on Securities in Certain Circumstances................................................67
SECTION 12.3. Securities Subordinated to Prior Payment of All Senior Debt on Dissolution,
Liquidation or Reorganization...........................................................69
SECTION 12.4. Securityholders to Be Subrogated to Rights of Holders of Senior Debt.............................69
SECTION 12.5. Obligations of the Company and the Guarantors Unconditional......................................69
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SECTION 12.6. Trustee Entitled to Assume Payments Not Prohibited in Absence of Notice..........................70
SECTION 12.7. Application by Trustee of Assets Deposited with It...............................................70
SECTION 12.8. Subordination Rights Not Impaired by Acts or Omissions of the Company,
the Guarantors or Holders of Senior Debt................................................70
SECTION 12.9. Securityholders Authorize Trustee to Effectuate Subordination of Securities......................71
SECTION 12.10. Right of Trustee to Hold Senior Debt.............................................................71
SECTION 12.11. Article XII Not to Prevent Events of Default.....................................................71
SECTION 12.12. No Fiduciary Duty of Trustee to Holders of Senior Debt...........................................71
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA Controls.....................................................................................72
SECTION 13.2. Notices..........................................................................................72
SECTION 13.3. Communications by Holders with Other Holders.....................................................73
SECTION 13.4. Certificate and Opinion as to Conditions Precedent...............................................73
SECTION 13.5. Statements Required in Certificate or Opinion....................................................73
SECTION 13.6. Rules by Trustee, Paying Agent, Registrar........................................................74
SECTION 13.7. Legal Holidays...................................................................................74
SECTION 13.8. Governing Law....................................................................................74
SECTION 13.9. No Adverse Interpretation of Other Agreements....................................................74
SECTION 13.10. No Recourse Against Others.......................................................................74
SECTION 13.11. Successors.......................................................................................75
SECTION 13.12. Duplicate Originals..............................................................................75
SECTION 13.13. Severability.....................................................................................75
SECTION 13.14. Table of Contents, Headings, Etc.................................................................75
SECTION 13.15. Qualification of Indenture.......................................................................75
SECTION 13.16. Registration Rights..............................................................................75
EXHIBIT A - FORM OF SECURITY ...................................................................................A-1
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION 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)......................................................................................... 2.5
(b)......................................................................................... 13.3
(c)......................................................................................... 13.3
313(a)......................................................................................... 7.6
(b)(1)...................................................................................... 7.6
(b)(2)...................................................................................... 7.6
(c)......................................................................................... 7.6
(d)......................................................................................... N.A.
314(a)......................................................................................... 4.7(a)
315(a)......................................................................................... 7.2
(b)......................................................................................... 7.5
(c)......................................................................................... 7.1
(d)......................................................................................... 7.1
(e)......................................................................................... 6.13
316(a)(last sentence).......................................................................... 2.9
(a)(1)(A)................................................................................... 6.11
(a)(1)(B)................................................................................... 6.12
(a)(2)...................................................................................... N.A.
(b)......................................................................................... 6.8
317(a)(1)...................................................................................... 6.3
(a)(2)...................................................................................... 6.4
(b)......................................................................................... 2.4
318(a)......................................................................................... 13.1
(b)......................................................................................... N.A.
(c)......................................................................................... 13.1
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
v
INDENTURE, dated as of July 30, 1999, by and between Compass Aerospace
Corporation, a Delaware corporation (the "Company"), and IBJ Whitehall Bank &
Trust Company, a New York banking corporation as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Company's 101/8%
Series C Senior Subordinated Notes due 2005 to be exchanged for the 101/8%
Series D Senior Subordinated Notes due 2005:
ARTICLE II
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. DEFINITIONS.
"ACQUIRED INDEBTEDNESS" means Indebtedness or Disqualified Capital
Stock of any person existing at the time such person becomes a Subsidiary of the
Company, including by designation, or is merged or consolidated into or with the
Company or one of its Subsidiaries.
"ACQUISITION" means the purchase or other acquisition of any person or
all or substantially all the assets of any person by any other person, whether
by purchase, merger, consolidation, or other transfer, and whether or not for
consideration.
"AFFILIATE" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company. For
purposes of this definition, the term "control" means the power to direct the
management and policies of a person, directly or through one or more
intermediaries, whether through the ownership of voting securities, by contract,
or otherwise, PROVIDED, THAT, with respect to ownership interest in the Company
and its Subsidiaries, a Beneficial Owner of 10% or more of the total voting
power normally entitled to vote in the election of directors, managers or
trustees, as applicable, shall for such purposes be deemed to constitute
control.
"AFFILIATE TRANSACTION" shall have the meaning specified in Section
4.10.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"ASSET SALE" shall have the meaning specified in Section 4.14.
"ASSET SALE OFFER" shall have the meaning specified in Section 4.14.
"ASSET SALE OFFER AMOUNT" shall have the meaning specified in Section
4.14.
"ASSET SALE OFFER PERIOD" shall have the meaning specified in Section
4.14.
"ASSET SALE OFFER PRICE" shall have the meaning specified in Section
4.14.
"AVERAGE LIFE" means, as of the date of determination, with respect to
any security or instrument, the quotient obtained by dividing (i) the sum of the
products (a) of the number of years from the date of determination to the date
or dates of each successive scheduled principal (or redemption) payment of such
security or instrument and (b) the amount of each such respective principal (or
redemption) payment by (ii) the sum of all such principal (or redemption)
payments.
"BANKRUPTCY LAW" means Title 11, U.S. Code, or any similar Federal,
state or foreign law for the relief of debtors.
"BENEFICIAL OWNER" or "BENEFICIAL OWNER" for purposes of the definition
of Change of Control and Affiliate has the meaning attributed to it in Rules
13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether
or not applicable, except that a "person" shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors of such Person or any committee of the board of directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the board of directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York, New York
are authorized or obligated by law or executive order to close.
"CAPITAL CONTRIBUTION" means any contribution to the equity of the
Company from a direct or indirect parent of the Company for which no
consideration other than the issuance of common stock with no redemption rights
and no special preferences, privileges or voting rights is given.
"CAPITALIZED LEASE OBLIGATION" means, as to any person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means, with respect to any corporation, any and all
shares, interests, rights to purchase (other than convertible or exchangeable
Indebtedness that is not itself otherwise capital stock), warrants, options,
participations or other equivalents of or interests (however designated) in
stock issued by that corporation.
"CASH" or "CASH" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public or private debts.
"CASH EQUIVALENT" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) or (ii) time deposits and
certificates of deposit and commercial paper issued by the parent corporation of
any domestic commercial bank of recognized standing having capital and surplus
in excess of $500,000,000 or (iii) commercial paper issued by others rated at
least A-2 or the equivalent thereof by Standard & Poor's Corporation or at least
P-2 or the equivalent thereof by Xxxxx'x Investors Service, Inc., and in the
case of each of (i), (ii), and (iii) maturing within one year after the date of
acquisition.
"CHANGE OF CONTROL" means:
(i) prior to consummation of an Initial Public Equity Offering
the Excluded Persons shall cease to own beneficially and of record at
least 51% of the total voting power in the aggregate
2
of all classes of Capital Stock of the Company then outstanding
normally entitled to vote in elections of directors or
(ii) on or following the consummation of an Initial Public
Equity Offering,
(A) any merger or consolidation of the Company with
or into any person or any sale, transfer or other conveyance,
whether direct or indirect, of all or substantially all of the
assets of the Company, on a consolidated basis, in one
transaction or a series of related transactions, if,
immediately after giving effect to such transaction(s), any
"person" or "group" (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) (other than any of the Excluded Persons) (a) is or
becomes the "beneficial owner," directly or indirectly, of
more than 35% of the total voting power in the aggregate
normally entitled to vote in the election of directors,
managers, or trustees, as applicable, of the transferee(s) or
surviving entity or entities, and (b) any such person or group
becomes, directly or indirectly, the beneficial owner of a
greater percentage of such total voting power, than
beneficially owned by the Excluded Persons,
(B) any "person" or "group" (as such terms are used
for purposes of Sections 13(d) and 14(d) of the Exchange Act,
whether or not applicable) (other than any of the Excluded
Persons) (a) is or becomes the "beneficial owner," directly or
indirectly, of more than 35% of the total voting power in the
aggregate of all classes of Capital Stock of the Company then
outstanding normally entitled to vote in elections of
directors, and (b) any such person or group becomes, directly
or indirectly, the beneficial owner of a greater percentage of
such total voting power, than beneficially owned by the
Excluded Persons, or
(C) during any period of 12 consecutive months after
the Issue Date, individuals who at the beginning of any such
12-month period constituted the Board of Directors of the
Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by
the shareholders of the Company, as applicable, was approved
by a vote of a majority of the directors then still in office
who were either directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of Directors of the Company, as applicable, then in
office.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in Section
10.1.
"CHANGE OF CONTROL OFFER PERIOD" shall have the meaning specified in
Section 10.1.
"CHANGE OF CONTROL PURCHASE DATE" shall have the meaning specified in
Section 10.1.
"CHANGE OF CONTROL PURCHASE PRICE" shall have the meaning specified in
Section 10.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture, and thereafter means such
successor.
"CONSOLIDATION" means, with respect to the Company, the consolidation
of the accounts of the Subsidiaries with those of the Company, all in accordance
with GAAP; PROVIDED that "consolidation" will
3
not include consolidation of the accounts of any Unrestricted Subsidiary with
the accounts of the Company. The term "consolidated" has a correlative meaning
to the foregoing.
"CONSOLIDATED COVERAGE RATIO" of any person on any date of
determination (the "Transaction Date") means the ratio, on a PRO FORMA basis,
of:
(a) the aggregate amount of Consolidated EBITDA of such person
attributable to continuing operations and businesses (exclusive of
amounts attributable to operations and businesses permanently
discontinued or disposed of) for the Reference Period to
(b) the aggregate Consolidated Fixed Charges of such person
(exclusive of amounts attributable to operations and businesses
permanently discontinued or disposed of, but only to the extent that
the obligations giving rise to such Consolidated Fixed Charges would no
longer be obligations contributing to such person's Consolidated Fixed
Charges subsequent to the Transaction Date) during the Reference
Period;
PROVIDED, that for purposes of such calculation,
(i) Acquisitions which occurred during the Reference Period or
subsequent to the Reference Period and on or prior to the Transaction
Date shall be assumed to have occurred on the first day of the
Reference Period,
(ii) transactions giving rise to the need to calculate the
Consolidated Coverage Ratio shall be assumed to have occurred on the
first day of the Reference Period,
(iii) the incurrence of any Indebtedness or issuance of any
Disqualified Capital Stock during the Reference Period or subsequent to
the Reference Period and on or prior to the Transaction Date (and the
application of the proceeds therefrom to the extent used to refinance
or retire other Indebtedness) shall be assumed to have occurred on the
first day of the Reference Period, and
(iv) the Consolidated Fixed Charges of such person
attributable to interest on any Indebtedness or dividends on any
Disqualified Capital Stock bearing a floating interest (or dividend)
rate shall be computed on a PRO FORMA basis as if the average rate in
effect from the beginning of the Reference Period to the Transaction
Date had been the applicable rate for the entire period, unless such
Person or any of its Subsidiaries is a party to an Interest Swap or
Hedging Obligation (which shall remain in effect for the 12-month
period immediately following the Transaction Date) that has the effect
of fixing the interest rate on the date of computation, in which case
such rate (whether higher or lower) shall be used.
"CONSOLIDATED EBITDA" means, with respect to any person, for any
period, the Consolidated Net Income of such person for such period adjusted to
add thereto (to the extent deducted from net revenues in determining
Consolidated Net Income), without duplication, the sum of (i) Consolidated
income tax expense, (ii) Consolidated depreciation and amortization expense, and
(iii) Consolidated Fixed Charges, less the amount of all cash payments made by
such person or any of its Subsidiaries during such period to the extent such
payments relate to non-cash charges that were added back in determining
Consolidated EBITDA for such period or any prior period, PROVIDED that
consolidated income tax expense and depreciation and amortization of a
Subsidiary that is a less than Wholly-Owned Subsidiary shall only be added to
the extent of the equity interest of the Company in such Subsidiary.
4
"CONSOLIDATED FIXED CHARGES" of any person means, for any period, the
aggregate amount (without duplication and determined in each case in accordance
with GAAP) of:
(a) interest expensed or capitalized, paid, accrued, or
scheduled to be paid or accrued (including, in accordance with the
following sentence, interest attributable to Capitalized Lease
Obligations) of such person and its Consolidated Subsidiaries during
such period, including
(i) original issue discount and non-cash interest
payments or accruals on any Indebtedness,
(ii) the interest portion of all deferred payment
obligations, and
(iii) all commissions, discounts and other fees and
charges owed with respect to bankers' acceptances and letters
of credit financings and currency and Interest Swap and
Hedging Obligations, in each case to the extent attributable
to such period, and
(b) the amount of dividends accrued or payable (or guaranteed)
by such person or any of its Consolidated Subsidiaries in respect of
Preferred Stock (other than by Subsidiaries of such person to such
person or such person's Wholly-Owned Subsidiaries), except if such
Preferred Stock is a payment-in-kind ("PIK") security, issuance of such
additional PIK securities would not count as dividends for purposes of
this definition.
For purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined in good
faith by the Company to be the rate of interest implicit in such Capitalized
Lease Obligation in accordance with GAAP and (y) interest expense attributable
to any Indebtedness represented by the guaranty by such person or a Subsidiary
of such person of an obligation of another person shall be deemed to be the
interest expense attributable to the Indebtedness guaranteed.
"CONSOLIDATED NET INCOME" means, with respect to any person for any
period, the net income (or loss) of such person and its Consolidated
Subsidiaries (determined on a consolidated basis in accordance with GAAP) for
such period, adjusted to exclude (only to the extent included in computing such
net income (or loss) and without duplication):
(a) all gains (but not losses) which are either extraordinary
(as determined in accordance with GAAP) or are either unusual or
nonrecurring (including any gain from the sale or other disposition of
assets outside the ordinary course of business or from the issuance or
sale of any capital stock),
(b) the net income, if positive, of any person, other than a
Consolidated Subsidiary, in which such person or any of its
Consolidated Subsidiaries has an interest, except to the extent of the
amount of any dividends or distributions actually paid in cash to such
person or a Consolidated Subsidiary of such person during such period,
but in any case not in excess of such person's PRO RATA share of such
person's net income for such period,
(c) the net income or loss of any person acquired in a pooling
of interests transaction for any period prior to the date of such
acquisition,
(d) the net income, if positive, of any of such person's
Consolidated Subsidiaries to the extent that the declaration or payment
of dividends or similar distributions is not at the time permitted by
operation of the terms of its charter or bylaws or any other agreement,
instrument,
5
judgment, decree, order, statute, rule or governmental regulation
applicable to such Consolidated Subsidiary.
"CONSOLIDATED NET WORTH" of any person at any date means the aggregate
consolidated stockholders' equity of such person (plus amounts of equity
attributable to preferred stock) and its Consolidated Subsidiaries, as would be
shown on the consolidated balance sheet of such person prepared in accordance
with GAAP, adjusted to exclude (to the extent included in calculating such
equity),
(a) the amount of any such stockholders' equity attributable
to Disqualified Capital Stock or treasury stock of such person and its
Consolidated Subsidiaries,
(b) all write-ups in the book value of any asset of such
person or a Consolidated Subsidiary of such person subsequent to the
Issue Date (other than writeups resulting from foreign currency
translations or of tangible assets of a going concern business made
within 12 months after the acquisition of such business) and
(c) all investments in Subsidiaries that are not Consolidated
Subsidiaries and in persons that are not Subsidiaries.
"CONSOLIDATED SUBSIDIARY" means, for any person, each Subsidiary of
such person (whether now existing or hereafter created or acquired) the
financial statements of which are consolidated for financial statement reporting
purposes with the financial statements of such person in accordance with GAAP.
"CORPORATE TRUST OFFICE" means the office of the Trustee in the Borough
of Manhattan, The City of New York.
"COVENANT DEFEASANCE" shall have the meaning specified in Section 8.3.
"CREDIT AGREEMENT" means the credit agreement entered into by and among
Compass, its subsidiaries, various financial institutions and, BancBoston
Xxxxxxxxx Xxxxxxxx Inc. as arranger, BankBoston, N.A. as a lender and agent,
Royal Bank of Canada as syndication agent, NationsBank, N.A., as co-agent and
General Electric Capital Corporation as documentation agent, providing a
revolving credit facility, term loans and an acquisition line, including any
related notes, guarantees, collateral documents, instruments and agreements
executed in connection therewith, as such credit agreement and/or related
documents may be amended, restated, supplemented, renewed, replaced or otherwise
modified from time to time whether or not with the same agent, trustee,
representative lenders or holders, and irrespective of any changes in the terms
and conditions thereof. Without limiting the generality of the foregoing, the
term "Credit Agreement" shall include agreements in respect of Interest Swap and
Hedging Obligations with lenders party to the Credit Agreement and shall also
include any amendment, amendment and restatement, renewal, extension,
restructuring, supplement or modification to any Credit Agreement and all
refundings, refinancings and replacements of any Credit Agreement, including any
agreement (i) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding or deleting borrowers or guarantors
thereunder, so long as borrowers and issuers include one or more of the Company
and its Subsidiaries and their respective successors and assigns, (iii)
increasing the amount of Indebtedness incurred thereunder or available to be
borrowed thereunder, PROVIDED that on the date such Indebtedness is incurred in
accordance with the covenant "Limitation on Incurrence of Additional
Indebtedness and Disqualified Capital Stock" or (iv) otherwise altering the
terms and conditions thereof in a manner not prohibited by the terms of this
Indenture.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
6
"DEFAULT" means any event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DEFINITIVE SECURITIES" means Securities that are in the form of
Security attached hereto as Exhibit A that do not include the information called
for by footnotes 3 and 8 thereof.
"DEPOSITORY" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.3 as the
Depository with respect to the Securities, 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 SENIOR DEBT" means, (a) so long as it is in effect and
there is at least $1,000,000 of outstanding indebtedness thereunder, the Credit
Agreement and (b) any other Senior Debt designated by the Company to be
"Designated Senior Debt" that has an outstanding principal amount of at least
$25,000,000 at the time of such designation.
"DISQUALIFIED CAPITAL STOCK" means:
(a) except as set forth in (b), with respect to any person,
Equity Interests of such person that, by its terms or by the terms of
any security into which it is convertible, exercisable or exchangeable,
is, or upon the happening of an event or the passage of time or both
would be, required to be redeemed or repurchased (including at the
option of the holder thereof) by such person or any of its
Subsidiaries, in whole or in part, on or prior to the Stated Maturity
of the Securities and
(b) with respect to any Subsidiary of such person (including
with respect to any Subsidiary of the Company), any Equity Interests
other than any common equity with no preference, privileges, or
redemption or repayment provisions.
"EQUITY INTEREST" of any Person means any shares, interests,
participation or other equivalents (however designated) in such Person's equity,
and shall in any event include any Capital Stock issued by, or partnership or
membership interests in, such Person.
"EVENT OF DEFAULT" shall have the meaning specified in Section 6.1.
"EVENT OF LOSS" means, with respect to any property or asset, any (i)
loss, destruction or damage of such property or asset or (ii) any condemnation,
seizure or taking, by exercise of the power of eminent domain or otherwise, of
such property or asset, or confiscation or requisition of the use of such
property or asset.
"EXCESS PROCEEDS" shall have the meaning specified in Section 4.14.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"EXCHANGE SECURITIES" means the 101/8% Series D Senior Subordinated
Notes due 2005, as supplemented from time to time in accordance with the terms
hereof, to be issued pursuant to this Indenture in connection with the offer to
exchange Securities for the Initial Securities that may be made by the
7
Company pursuant to the Registration Rights Agreement that contains the
information referred to in footnotes 1, 2 and 8 to the form of Security attached
hereto as Exhibit A.
"EXCLUDED PERSON" means officers and directors of the Company and those
persons who beneficially own membership interests in Compass Holdings LLC, in
each case, as of the Issue Date.
"EXEMPTED AFFILIATE TRANSACTION" means:
(a) customary employee compensation arrangements approved by a
majority of independent (as to such transactions) members of the Board
of Directors of the Company,
(b) dividends permitted under the terms of the covenant
discussed in Section 4.3 and payable, in form and amount, on a pro rata
basis to all holders of common stock of the Company,
(c) Management Fee Payments up to $500,000 in any fiscal year
and the reimbursement by the Company of reasonable out-of-pocket costs
and expenses incurred in connection with the rendering of management
services to or on behalf of the Company,
(d) Permitted Payments to Parent and
(e) transactions solely between the Company and any of its
Wholly-Owned Consolidated Subsidiaries or solely among Wholly-Owned
Consolidated Subsidiaries of the Company.
"EXISTING INDEBTEDNESS" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture.
"GAAP" means United States 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 approved by a significant segment of the
accounting profession in the United States as in effect on the Issue Date.
"GLOBAL SECURITY" means a Security that contains the information
referred to in footnotes 3 and 6 to the form of Security attached hereto as
Exhibit A.
"GUARANTEE" shall have the meaning provided in Section 11.1.
"GUARANTOR" means, subject to the provisions in Section 11.4 of this
Indenture, Western Methods Machinery Corporation, Aeromil Engineering Company,
Xxxxxxxx Machine, Inc., Wichita Manufacturing, Inc., Xxxxxx Machine, Inc.,
Sea-Lect Products, Inc., Pacific Hills Manufacturing Co., Modern Manufacturing,
Inc., Compass Aerospace Limited, Trim Engineering Limited, Trefn Engineering
Limited, Trefn Engineering (Metal Treatments) Division Limited, Diac Limited and
Trefn Fabrications Limited and each other Subsidiary of the Company that
executes a Guarantee guaranteeing the Securities in accordance with the
provisions of this Indenture.
"HOLDER" or "SECURITYHOLDER" means the Person in whose name a Security
is registered on the Registrar's books.
"INCUR" or "INCUR" shall have the meaning specified in Section 4.11.
8
"INCURRENCE DATE" shall have the meaning specified in Section 4.11.
"INDEBTEDNESS" of any person means, without duplication,
(a) all liabilities and obligations, contingent or otherwise,
of such any person, to the extent such liabilities and obligations
would appear as a liability upon the consolidated balance sheet of such
person in accordance with GAAP,
(i) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such
person or only to a portion thereof),
(ii) evidenced by bonds, notes, debentures or similar
instruments,
(iii) representing the balance deferred and unpaid of
the purchase price of any property or services, except (other
than accounts payable or other obligations to trade creditors
which have remained unpaid for greater than 60 days past their
original due date) those incurred in the ordinary course of
its business that would constitute ordinarily a trade payable
to trade creditors;
(b) all liabilities and obligations, contingent or
otherwise, of such person,
(i) evidenced by bankers' acceptances or similar
instruments issued or accepted by banks,
(ii) relating to any Capitalized Lease Obligation, or
(iii) evidenced by a letter of credit or a
reimbursement obligation of such person with respect to any
letter of credit;
(c) all net obligations of such person under Interest Swap and
Hedging Obligations;
(d) all liabilities and obligations of others of the kind
described in the preceding clause (a), (b) or (c) that such person has
guaranteed or that is otherwise its legal liability or which are
secured by any assets or property of such person and all obligations to
purchase, redeem or acquire any Equity Interests;
(e) any and all deferrals, renewals, extensions, refinancing
and refundings (whether direct or indirect) of, or amendments,
modifications or supplements to, any liability of the kind described in
any of the preceding clauses (a), (b), (c) or (d), or this clause (e),
whether or not between or among the same parties; and
(f) all Disqualified Capital Stock of such Person (measured at
the greater of its voluntary or involuntary maximum fixed repurchase
price plus accrued and unpaid dividends). For purposes hereof, the
"maximum fixed repurchase price" of any Disqualified Capital Stock
which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair
Market Value of such Disqualified Capital Stock, such Fair Market Value
to be determined in good faith by the board of directors of the issuer
(or managing general partner of the issuer) of such Disqualified
Capital Stock.
9
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INITIAL PUBLIC EQUITY OFFERING" means an initial underwritten offering
of common stock of the Company or Parent for cash pursuant to an effective
registration statement under the Securities Act as a consequence of which the
common stock of the Company or Parent is listed on a national securities
exchange or quoted on the national market system of Nasdaq stock market.
"INITIAL PURCHASER" means BancBoston Xxxxxxxxx Xxxxxxxx Inc.
"INITIAL SECURITIES" means the 101/8% Series C Senior Subordinated
Notes due 2005, as supplemented from time to time in accordance with the terms
hereof, issued under this Indenture that contains the information referred to in
footnotes 4, 5 and 7 to the form of Security attached hereto as Exhibit A.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Securities.
"INTEREST SWAP AND HEDGING OBLIGATION" means any obligation of any
person pursuant to any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate exchange agreement,
currency exchange agreement or any other agreement or arrangement designed to
protect against fluctuations in interest rates or currency values, including,
without limitation, any arrangement whereby, directly or indirectly, such person
is entitled to receive from time to time periodic payments calculated by
applying either a fixed or floating rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
fixed or floating rate of interest on the same notional amount.
"INVESTMENT" by any person in any other person means (without
duplication)
(a) the acquisition (whether by purchase, merger,
consolidation or otherwise) by such person (whether for cash, property,
services, securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other
securities, including any options or warrants, of such other person or
any agreement to make any such acquisition;
(b) the making by such person of any deposit with, or advance,
loan or other extension of credit to, such other person (including the
purchase of property from another person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such
other person) or any commitment to make any such advance, loan or
extension (but excluding accounts receivable, endorsements for
collection or deposits arising in the ordinary course of business);
(c) other than guarantees of Indebtedness of the Company or
any Guarantor to the extent permitted by the covenant "Limitation on
Incurrence of Additional Indebtedness and Disqualified Capital Stock,"
the entering into by such person of any guarantee of, or other credit
support or contingent obligation with respect to, Indebtedness or other
liability of such other person;
(d) the making of any capital contribution by such person to
such other person; and
(e) the designation by the Board of Directors of the Company
of any person to be an Unrestricted Subsidiary.
The Company shall be deemed to make an Investment in an amount equal to the fair
market value of the net assets of any subsidiary (or, if neither the Company nor
any of its Subsidiaries has theretofore made
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an Investment in such subsidiary, in an amount equal to the Investments being
made), at the time that such subsidiary is designated an Unrestricted
Subsidiary, and any property transferred to an Unrestricted Subsidiary from the
Company or a Subsidiary of the Company shall be deemed an Investment valued at
its fair market value at the time of such transfer.
"ISSUE DATE" means the date of first issuance of the Securities under
this Indenture.
"JUNIOR SECURITY" means any Qualified Capital Stock and any
Indebtedness of the Company or a Guarantor, as applicable, that is subordinated
in right of payment to Senior Debt at least to the same extent as the Securities
or the Guarantee, as applicable, and has no scheduled installment of principal
due, by redemption, sinking fund payment or otherwise, on or prior to the Stated
Maturity of the Securities; PROVIDED, that in the case of subordination in
respect of Senior Debt under the Credit Agreement, "Junior Security" shall mean
any Qualified Capital Stock and any Indebtedness of the Company or the
Guarantor, as applicable, that (i) has a final maturity date occurring after the
final maturity date of, all Senior Debt outstanding under the Credit Agreement
on the date of issuance of such Qualified Capital Stock or Indebtedness, (ii) is
unsecured, (iii) has an Average Life longer than the security for which such
Qualified Capital Stock or Indebtedness is being exchanged, and (iv) by their
terms or by law are subordinated to Senior Debt outstanding under the Credit
Agreement on the date of issuance of such Qualified Capital Stock or
Indebtedness at least to the same extent as the Securities.
"LEGAL DEFEASANCE" shall have the meaning specified in Section 8.2.
"LEGAL HOLIDAY" shall have the meaning specified in Section 13.7.
"LIEN" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind, real or personal, movable or
immovable, now owned or hereafter acquired.
"LIQUIDATED DAMAGES" shall have the meaning specified in the
Registration Rights Agreement.
"MANAGEMENT FEE PAYMENTS" means payments from the Company to Dunhill
and Xxxxx Capital under that certain Management Consulting Agreement, dated
March 9, 1998, as amended, by and between the Company, Dunhill Bank Caribbean
Ltd. and Xxxxx Capital, in accordance with the terms and provisions of such
Management Consulting Agreement on the Issue Date, PROVIDED, HOWEVER, that the
obligation of the Company to make such payments will be subordinated to the
payment of all Obligations with respect to the Securities (and any Guarantee
thereof).
"MATERIAL FACILITY" means a facility that has a customer certification
including without limitation D1-9000.
"MATURITY DATE" means, when used with respect to any Security, the date
specified on such Security as the fixed date on which the final installment of
principal of such Security is due and payable (in the absence of any
acceleration thereof pursuant to the provisions of this Indenture regarding
acceleration of Indebtedness or any Change of Control Offer or Asset Sale
Offer).
"XXXXX'X" means Xxxxx'x Investors Services, Inc. and its successors.
"MORTGAGE INDEBTEDNESS" of any person means any Indebtedness of such
person secured by real property of such person which in the reasonable good
faith judgment of the Board of Directors is directly related to a Related
Business of the Company.
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"NET CASH PROCEEDS" means the aggregate amount of cash or Cash
Equivalents received by the Company in the case of a sale of Qualified Capital
Stock and by the Company and its Subsidiaries in respect of an Asset Sale plus,
in the case of an issuance of Qualified Capital Stock upon any exercise,
exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for cash on or
after the Issue Date, the amount of cash originally received by the Company upon
the issuance of such securities (including options, warrants, rights and
convertible or exchangeable debt) less, in each case, the sum of all payments,
fees, commissions and (in the case of Asset Sales, reasonable and customary),
expenses (including, without limitation, the fees and expenses of legal counsel
and investment banking fees and expenses) incurred in connection with such Asset
Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale only,
less the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes (the computation of which
shall take into account any available net operating losses and other tax
attributes of Parent, and the Company and their Subsidiaries) required to be
paid by the Company or any of its respective Subsidiaries in the taxable year of
such sale in connection with such Asset Sale.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness of the Company or its
Subsidiaries to the extent that,
(i) under the terms thereof or pursuant to law, no personal
recourse may be had against the Company or its Subsidiaries for the
payment of the principal of or interest or premium on such
Indebtedness, and enforcement of obligations on such Indebtedness
(except with respect to fraud, willful misconduct, misrepresentation,
misapplication of funds, reckless damage to assets and undertakings
with respect to environmental matters or construction defects) is
limited only to recourse against interests in specified assets and
property (the "Special Assets"), accounts and proceeds arising
therefrom, and rights under purchase agreements or other agreements
with respect to such Subject Assets;
(ii) such Indebtedness (x) is incurred concurrently with the
acquisition by the Company or its Subsidiaries of such Subject Assets
or a Person (or interests in a Person) holding such Subject Assets, or
(y) constitutes Refinancing Indebtedness with respect to Indebtedness
so incurred; and
(iii) the Subject Assets are not existing assets and no
existing assets or proceeds from the sale, transfer of other
disposition of existing assets were used to acquire such Subject
Assets.
"OBLIGATION" means any principal, premium or interest payment, or
monetary penalty, or damages, due by the Company or any Guarantor under the
terms of the Securities or this Indenture, including any liquidated damages due
pursuant to the terms of the Registration Rights Agreement.
"OFFICER" means, with respect to the Company or any Guarantor, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller, or the Secretary of the Company or such
Guarantor.
"OFFICERS' CERTIFICATE" means, with respect to the Company or any
Guarantor, a certificate signed by two Officers or by an Officer and an
Assistant Secretary of the Company or such Guarantor and otherwise complying
with the requirements of Sections 13.4 and 13.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5.
"PARENT" means Compass Holdings LLC or its successor, so long as such
entity owns at least 51% of the Capital Stock of the Company.
12
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PAYMENT DEFAULT" shall have the meaning specified in Section 12.2.
"PAYMENT NOTICE" shall have the meaning specified in Section 12.2.
"PERMITTED INDEBTEDNESS" means that:
(a) the Company and the Guarantors may incur Indebtedness
evidenced by the Securities and represented by this Indenture up to the
amounts specified therein as of the date thereof;
(b) the Company and the Guarantors, as applicable, may incur
Refinancing Indebtedness with respect to any Indebtedness or
Disqualified Capital Stock, as applicable, described in clause (a) of
this definition or incurred under the Debt Incurrence Ratio test of
Section 4.11 or which is outstanding on the Issue Date, PROVIDED that
in each case such Refinancing Indebtedness is secured only by the
assets that secured the Indebtedness so refinanced;
(c) the Company and its Subsidiaries may incur Indebtedness
solely in respect of bankers acceptances, and performance bonds (to the
extent that such incurrence does not result in the incurrence of any
obligation to repay any obligation relating to borrowed money of
others), all in the ordinary course of business in accordance with
customary industry practices, in amounts and for the purposes customary
in the Company's industry; PROVIDED, that the aggregate principal
amount outstanding of such Indebtedness (including any Refinancing
Indebtedness and any other Indebtedness issued to refinance, refund,
defease or replace such Indebtedness) shall at no time exceed $250,000;
(d) the Company may incur Indebtedness to any Guarantor, and
any Guarantor may incur Indebtedness to any other Guarantor or to the
Company; PROVIDED, that, in the case of Indebtedness of the Company,
such obligations shall be unsecured and subordinated in all respects to
the Company's obligations pursuant to the Securities and the date of
any event that causes such Guarantor no longer to be a Guarantor shall
be an Incurrence Date; and
(e) any Guarantor may guaranty any Indebtedness of the Company
or another Guarantor that was permitted to be incurred pursuant to this
Indenture, substantially concurrently with such incurrence or at the
time such person becomes a Guarantor.
"PERMITTED INVESTMENT" means:
(a) Investments in any of the Securities;
(b) Investments in Cash Equivalents;
(c) intercompany notes to the extent permitted under clause
(d) of the definition of "Permitted Indebtedness" and
(d) any Investment by the Company or any Guarantor in a Person
if as a result of such Investment such Person immediately becomes a
Wholly-Owned Subsidiary Guarantor or such Person is immediately merged
with or into the Company or a Wholly-Owned Subsidiary Guarantor.
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"PERMITTED LIEN" means:
(a) Liens existing on the Issue Date;
(b) Liens imposed by governmental authorities for taxes,
assessments or other charges not yet subject to penalty or which are
being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of
the Company in accordance with GAAP;
(c) statutory liens of carriers, warehousemen, mechanics,
material men, landlords, repairmen or other like Liens arising by
operation of law in the ordinary course of business provided that (i)
the underlying obligations are not overdue for a period of more than 30
days, or (ii) such Liens are being contested in good faith and by
appropriate proceedings and adequate reserves with respect thereto are
maintained on the books of the Company in accordance with GAAP;
(d) Liens securing the performance of bids, trade contracts
(other than borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, zoning, similar restrictions and
other similar encumbrances or title defects which, singly or in the
aggregate, do not in any case materially detract from the value of the
property, subject thereto (as such property is used by the Company or
any of its Subsidiaries) or interfere with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
(f) Liens arising by operation of law in connection with
judgments, only to the extent, for an amount and for a period not
resulting in an Event of Default with respect thereto;
(g) pledges or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security legislation;
(h) Liens securing the Securities;
(i) Liens securing Indebtedness of a Person existing at the
time such Person becomes a Subsidiary or is merged with or into the
Company or a Subsidiary or Liens securing Indebtedness incurred in
connection with an Acquisition, PROVIDED that such Liens were in
existence prior to the date of such acquisition, merger or
consolidation, were not incurred in anticipation thereof, and do not
extend to any other assets;
(j) Liens arising from Purchase Money Indebtedness or Mortgage
Indebtedness permitted to be incurred pursuant to Section 4.11 PROVIDED
such Liens relate solely to the property which is subject to such
Purchase Money Indebtedness or Mortgage Indebtedness, as applicable;
(k) leases or subleases granted to other persons in the
ordinary course of business not materially interfering with the conduct
of the business of the Company or any of its Subsidiaries or materially
detracting from the value of the relative assets of the Company or any
Subsidiary;
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings regarding operating leases entered into by
the Company or any of its Subsidiaries in the ordinary course of
business;
14
(m) Liens securing Refinancing Indebtedness incurred to
refinance any Indebtedness that was previously so secured in a manner
no more adverse to the Holders of the Securities than the terms of the
Liens securing such refinanced Indebtedness, and provided that the
Indebtedness secured is not increased and the lien is not extended to
any additional assets or property that would not have been security for
the Indebtedness refinanced; and
(n) Liens securing Indebtedness incurred under the Credit
Agreement in accordance with the terms of Section 4.11.
"PERMITTED PAYMENTS TO PARENT" means without duplication, (a) payments
to Parent in an amount sufficient to permit Parent to pay reasonable and
necessary operating expenses and other general corporate expenses to the extent
such expenses relate or are fairly allocable to the Company and its
Subsidiaries, provided such expenses do not exceed $250,000 in any fiscal year;
and (b) payments to Parent to enable Parent to pay foreign, federal, state or
local tax liabilities ("Tax Payment"), not to exceed the amount of any tax
liabilities that would be otherwise payable by the Company and its Subsidiaries
and Unrestricted Subsidiaries to the appropriate taxing authorities if they
filed separate tax returns to the extent that Parent has an obligation to pay
such tax liabilities relating to the operations, assets or capital of the
Company or its Subsidiaries and Unrestricted Subsidiaries PROVIDED, HOWEVER,
that (i), notwithstanding the foregoing, in the case of determining the amount
of a Tax Payment that is permitted to be paid by Company and any of its United
States subsidiaries in respect of their Federal income tax liability, such
payment shall be determined on the basis of assuming that all payments made to
Parent pursuant to the immediately preceding clause (a) shall be treated as a
deductible expense of the Company in the taxable year during which the
obligation to make such payment accrues and (ii) any Tax Payments shall either
be used by Parent to pay such tax liabilities within 90 days of Parent's receipt
of such payment or refunded to the payee.
"PERSON" or "PERSON" means any corporation, individual, limited
liability company, joint stock company, joint venture, partnership, limited
liability company, unincorporated association, governmental regulatory entity,
country, state or political subdivision thereof, trust, municipality or other
entity.
"PREFERRED STOCK" means an Equity Interest of any class or classes of a
Person (however designated) which is preferred as to payments of dividends, or
as to distributions upon any liquidation or dissolution, over Equity Interests
of any other class of such Person.
"PRINCIPAL" of any Indebtedness means the principal of such
Indebtedness.
"PROPERTY" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible,
intangible, contingent, direct or indirect.
"PURCHASE MONEY INDEBTEDNESS" of any person means any Non-Recourse
Indebtedness of such person to any seller or other person incurred solely to
finance the acquisition (including in the case of a Capitalized Lease
Obligation, the lease) of any after acquired tangible property which, in the
reasonable good faith judgment of the Board of Directors of the Company, is
directly related to a Related Business of the Company and which is incurred
substantially concurrently with such acquisition and is secured only by the
assets so financed.
"QUALIFIED CAPITAL STOCK" means any Capital Stock of the Company that
is not Disqualified Capital Stock.
"QUALIFIED EXCHANGE" means any legal defeasance, redemption,
retirement, repurchase or other acquisition of Capital Stock or of Indebtedness
of the Company issued on or after the Issue Date with the
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Net Cash Proceeds received by the Company from the substantially concurrent sale
of Qualified Capital Stock or any exchange of Qualified Capital Stock for any
Capital Stock or for Indebtedness of the Company issued on or after the Issue
Date.
"RECORD DATE" means a Record Date specified in the Securities whether
or not such Record Date is a Business Day, or, if applicable, as specified in
Section 2.12.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to Article III of
this Indenture and Paragraph 5 in the form of Security attached hereto as
Exhibit A.
"REDEMPTION PRICE," when used with respect to any Security to be
redeemed, means the redemption price for such redemption pursuant to Paragraph 5
in the form of Security attached hereto as Exhibit A, which shall include,
without duplication, in each case, accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date.
"REFERENCE PERIOD" with regard to any Person means the four full fiscal
quarters (or such lesser period during which such Person has been in existence)
ended immediately preceding any date upon which any determination is to be made
pursuant to the terms of the Securities or this Indenture.
"REFINANCING INDEBTEDNESS" means Indebtedness or Disqualified Capital
Stock (a) issued in exchange for, or the proceeds from the issuance and sale of
which are used substantially concurrently to repay, redeem, defease, refund,
refinance, discharge or otherwise retire for value, in whole or in part, or (b)
constituting an amendment, modification or supplement to, or a deferral or
renewal of ((a) and (b) above are, collectively, a "Refinancing"), any
Indebtedness or Disqualified Capital Stock in a principal amount or, in the case
of Disqualified Capital Stock, liquidation preference, not to exceed (after
deduction of reasonable and customary fees and expenses incurred in connection
with the Refinancing plus the amount of any premium paid in connection with such
Refinancing in accordance with the terms of the documents governing the
Indebtedness refinanced without giving effect to any modification thereof made
in connection with or in contemplation of such refinancing) the lesser of (i)
the principal amount or, in the case of Disqualified Capital Stock, liquidation
preference, of the Indebtedness or Disqualified Capital Stock so Refinanced and
(ii) if such Indebtedness being Refinanced was issued with an original issue
discount, the accreted value thereof (as determined in accordance with GAAP) at
the time of such Refinancing; PROVIDED, that (A) such Refinancing Indebtedness
of any Subsidiary of the Company shall only be used to Refinance outstanding
Indebtedness or Disqualified Capital Stock of such Subsidiary, (B) such
Refinancing Indebtedness shall (x) not have an Average Life shorter than the
Indebtedness or Disqualified Capital Stock to be so refinanced at the time of
such Refinancing and (y) in all respects, be no less subordinated or junior, if
applicable, to the rights of Holders of the Securities than was the Indebtedness
or Disqualified Capital Stock to be refinanced, (C) such Refinancing
Indebtedness shall have a final stated maturity or redemption date, as
applicable, no earlier than the final stated maturity or redemption date, as
applicable, of the Indebtedness or Disqualified Capital Stock to be so
refinanced, and (D) such Refinancing Indebtedness shall be secured (if secured)
in a manner no more adverse to the Holders of the Securities than the terms of
the Liens (if any) securing such refinanced Indebtedness, including, without
limitation, the amount of Indebtedness secured shall not be increased.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the date hereof by and between the Initial Purchaser, the Company
and the Guarantors, as such agreement may be amended, modified or supplemented
from time to time in accordance with the terms thereof.
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"RELATED BUSINESS" means the business conducted (or proposed to be
conducted) by the Company and its Subsidiaries as of the Issue Date and any and
all businesses that in the good faith judgment of the Board of Directors of the
Company are materially related businesses.
"RESTRICTED INVESTMENT" means, in one or a series of related
transactions, any Investment, other than other Permitted Investments.
"RESTRICTED PAYMENT" means, with respect to any person,
(a) the declaration or payment of any dividend or other
distribution in respect of Equity Interests of such person or any
parent or Subsidiary of such person,
(b) any payment on account of the purchase, redemption or
other acquisition or retirement for value of Equity Interests of such
person or any Subsidiary or parent of such person,
(c) other than with the proceeds from the substantially
concurrent sale of, or in exchange for, Refinancing Indebtedness any
purchase, redemption, or other acquisition or retirement for value of,
any payment in respect of any amendment of the terms of or any
defeasance of, any Subordinated Indebtedness, directly or indirectly,
by such person or a parent or Subsidiary of such person prior to the
scheduled maturity, any scheduled repayment of principal, or scheduled
sinking fund payment, as the case may be, of such Indebtedness,
(d) any Restricted Investment by such person and
(e) any Management Fee Payments or similar payments to any
Affiliates (other than Subsidiaries) in excess of an aggregate of
$500,000 in any fiscal year, PROVIDED, HOWEVER, that the obligation of
the Company to pay such Management Fee Payments will be subordinated to
the payment of all Obligations with respect to the Securities (and any
Guarantee thereof);
PROVIDED, HOWEVER, that the term "Restricted Payment" does not include (i) any
dividend, distribution or other payment on or with respect to Equity Interests
of an issuer to the extent payable solely in shares of Qualified Capital Stock
of such issuer; or (ii) any dividend, distribution or other payment to the
Company, or to any of its Guarantors, by the Company or any of its Subsidiaries.
"RESTRICTED SECURITY" means a Security, unless or until it has been (i)
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering it or (ii) distributed to the public
pursuant to Rule 144 (or any similar provision then in force) under the
Securities Act; PROVIDED, that in no case shall an Exchange Security issued in
accordance with this Indenture and the terms and provisions of the Registration
Rights Agreement be a Restricted Security.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies,
and its successors.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the Initial Securities and, when and
if issued as provided in the Registration Rights Agreement, the Exchange
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
17
"SECURITIES CUSTODIAN" means the Trustee, as custodian with respect to
the Securities in global form, or any successor entity thereto.
"SECURITYHOLDER" or "HOLDER" means the Person in whose name a Security
is registered on the Registrar's books.
"SENIOR DEBT" of the Company or any Guarantor means Indebtedness
(including any monetary obligation in respect of the Credit Agreement, and
interest, whether or not allowable, accruing on Indebtedness incurred pursuant
to the Credit Agreement after the filing of a petition initiating any proceeding
under any bankruptcy, insolvency or similar law) of the Company or such
Guarantor arising under the Credit Agreement or that, by the terms of the
instrument creating or evidencing such Indebtedness, is expressly designated
Senior Debt and made senior in right of payment to the Securities or the
applicable Guarantee; PROVIDED, that in no event shall Senior Debt include (a)
Indebtedness to any Subsidiary of the Company or any officer, director or
employee of the Company or any Subsidiary of the Company, (b) Indebtedness
incurred in violation of the terms of this Indenture, (c) Indebtedness to trade
creditors, (d) Disqualified Capital Stock, (e) Capitalized Lease Obligations,
and (f) any liability for taxes owed or owing by the Company or such Guarantor.
"SIGNIFICANT SUBSIDIARY" shall have the meaning provided under
Regulation S-X of the Securities Act, as in effect on the Issue Date.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.12.
"STATED MATURITY" when used with respect to any Security, means April
15, 2005.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or a
Guarantor that is subordinated in right of payment by its terms or the terms of
any document or instrument relating thereto to the Securities or such Guarantee,
as applicable, in any respect or has a stated maturity after the Stated
Maturity.
"SUBSIDIARY," with respect to any person, means:
(i) a corporation a majority of whose Equity Interests with
voting power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly, owned by such person, by such person
and one or more Subsidiaries of such person or by one or more
Subsidiaries of such person,
(ii) any other person (other than a corporation) in which such
person, one or more Subsidiaries of such person, or such person and one
or more Subsidiaries of such person, directly or indirectly, at the
date of determination thereof has at least majority ownership interest,
or
(iii) a partnership in which such person or a Subsidiary of
such person is, at the time, a general partner.
Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a
Subsidiary of the Company or of any Subsidiary of the Company. Unless the
context requires otherwise, Subsidiary means each direct and indirect Subsidiary
of the Company.
"TIA" means the Trust Indenture Act of 1939, as amended, (15 U.S.
Code Sections 77aaa-77bbbb) as in effect on the date of the execution of this
Indenture, except as provided in Section 9.3.
18
"TRANSFER RESTRICTED SECURITIES" means Securities that bear or are
required to bear the legend set forth in Section 2.6.
"TREASURY RATE" means the yield to maturity at the time of computation
of U.S. Treasury securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Release H.15 (519) which has become publicly
available at least two Business Days prior to the applicable Redemption Date
(or, if such statistical release is no longer published, any publicly available
source or similar market data)) closest to the period from the applicable
Redemption Date to April 15, 2002, PROVIDED, HOWEVER, that if the period from
such Redemption Date to April 15, 2002, is not equal to the constant maturity of
a U.S. Treasury security for which a weekly average yield is given, the Treasury
Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of one year) from the weekly average yields of U.S. Treasury
securities for which such yields are given, except that if the period from the
applicable Redemption Date to April 15, 2002, is less than one year, the weekly
average yield on actually traded U.S. Treasury securities adjusted to a constant
maturity of one year shall be used.
"TRUSTEE" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TRUST OFFICER" means any officer within the corporate trust division
(or any successor group) of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the persons who
at that time shall be such officers, and also means, with respect to a
particular corporate trust matter, any other officer of the Trustee to whom such
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"UNRESTRICTED SUBSIDIARY" means any subsidiary of the Company that does
not own any Capital Stock of, or own or hold any Lien on any property of, the
Company or any other Subsidiary of the Company and that, at the time of
determination, shall be an Unrestricted Subsidiary (as designated by the Board
of Directors of the Company); PROVIDED, that (i) such subsidiary shall not
engage, to any substantial extent, in any line or lines of business activity
other than a Related Business, (ii) neither immediately prior thereto nor after
giving PRO FORMA effect to such designation would there exist a Default or Event
of Default and (iii) immediately after giving pro forma effect thereto, the
Company could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio in Section 4.11. The Board of Directors of the Company may
designate any Unrestricted Subsidiary to be a Subsidiary, PROVIDED, that (i) no
Default or Event of Default is existing or will occur as a consequence thereof
and (ii) immediately after giving effect to such designation, on a PRO FORMA
basis, the Company could incur at least $1.00 of Indebtedness pursuant to the
Debt Incurrence Ratio of Section 4.11. Each such designation shall be evidenced
by filing with the Trustee a certified copy of the resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of,
or noncallable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"WHOLLY-OWNED," with respect to a Consolidated Subsidiary, means a
Consolidated Subsidiary that is a Wholly-Owned Subsidiary.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary all the Equity Interests
of which are owned by the Company or one or more Wholly-Owned Subsidiaries of
the Company.
"WHOLLY-OWNED SUBSIDIARY GUARANTOR" means a Guarantor that is a
Wholly-Owned Subsidiary.
19
SECTION 1.2. INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture refers to a provision of the TIA, such
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:
"COMMISSION" means the SEC.
"INDENTURE SECURITIES" means the Securities.
"INDENTURE SECURITYHOLDER" means a Holder or a Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company, each Guarantor
and any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
SECTION 1.3. 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 words in the
plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated otherwise.
20
ARTICLE II
THE SECURITIES
SECTION 2.1. FORM AND DATING.
The Securities and the Trustee's certificate of authentication, in
respect thereof, shall be substantially in the form of Exhibit A hereto, which
Exhibit is part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company shall
approve the form of the Securities and any notation, legend or endorsement on
them. Any such notations, legends or endorsements not contained in the form of
Security attached as Exhibit A hereto shall be delivered in writing to the
Trustee. Each Security shall be dated the date of its authentication.
The terms and provisions contained in the forms of Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
SECTION 2.2. EXECUTION AND AUTHENTICATION.
Two Officers shall sign, or one Officer shall sign and one Officer
shall attest to, the Security for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless and the
Company shall nevertheless be bound by the terms of the Securities and this
Indenture.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security but
such signature shall be conclusive evidence that the Security has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Initial Securities for original issue in
the aggregate principal amount of up to $19,000,000 and shall authenticate
Exchange Securities for original issue in the aggregate principal amount of up
to $19,000,000, in each case upon a written order of the Company in the form of
an Officers' Certificate; PROVIDED that such Exchange Securities shall be
issuable only upon the valid surrender for cancellation of Initial Securities of
a like aggregate principal amount in accordance with the Registration Rights
Agreement. The Officers' Certificate shall specify the amount of Securities to
be authenticated and the date on which the Securities are to be authenticated.
The aggregate principal amount of Securities outstanding at any time may not
exceed $19,000,000, except as provided in Section 2.7. Upon the written order of
the Company in the form of an Officers' Certificate, the Trustee shall
authenticate Securities in substitution of Securities originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company, any Affiliate of the Company,
or any of their respective Subsidiaries.
Securities shall be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiples thereof.
21
SECTION 2.3. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where Securities may be presented for
registration of transfer or for exchange ("Registrar"), and an office or agency
where Securities may be presented for payment ("Paying Agent"), and where
notices and demands to or upon the Company in respect of the Securities may be
served. The Company may act as Registrar or Paying Agent, except that, for the
purposes of Articles III, VIII, X, and Section 4.14 hereof and as otherwise
specified in this Indenture, neither the Company nor any Affiliate of the
Company shall act as Paying Agent. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have 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 hereby initially appoints the Trustee as Registrar and
Paying Agent, and by its acknowledgement and acceptance on the signature page
hereto, the Trustee hereby initially agrees so to act.
The Company shall enter into an appropriate written agency agreement
with any Agent (including the Paying Agent) not a party to this Indenture, which
agreement shall implement the provisions of this Indenture that relate to such
Agent, and shall furnish a copy of each such agreement to the Trustee. The
Company shall promptly notify the Trustee in writing of the name and address of
any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints The Depository Trust Company ("DTC"), to
act as Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as Securities
Custodian with respect to the Global Securities.
Upon the occurrence of an Event of Default described in Section 6.1(iv)
or (v) hereof, the Trustee shall, or upon the occurrence of any other Event of
Default by notice to the Company, the Registrar and the Paying Agent, the
Trustee may assume the duties and obligations of the Registrar and the Paying
Agent hereunder.
SECTION 2.4. PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, premium, if any, or interest (or Liquidated Damages, if any) on,
the Securities (whether such assets have been distributed to it by the Company
or any other obligor on the Securities), and shall notify the Trustee in writing
of any Default in making any such payment. If either of the Company or a
Subsidiary of the Company acts as Paying Agent, it shall segregate such assets
and hold them as a separate trust fund for the benefit of the Holders or the
Trustee. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default or any
Event of Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company) shall have no further liability for such assets.
22
SECTION 2.5. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
or any Paying Agent is not the Registrar, the Company shall furnish to the
Trustee on or before the third Business Day preceding each Interest Payment
Date and at such other times as the Trustee or any such Paying Agent may
request in writing a list in such form and as of such date as the Trustee or
any such Paying Agent reasonably may require of the names and addresses of
Holders and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When
Definitive Securities are presented to the Registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an
equal principal amount of Definitive Securities of other
authorized denominations, the Registrar shall register the
transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; PROVIDED, HOWEVER,
that the Definitive Securities surrendered for registration of
transfer or exchange:
(i) shall be duly endorsed or accompanied
by a written instrument of transfer in form
reasonably satisfactory to the Company and the
Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) in the case of Transfer Restricted
Securities that are Definitive Securities, shall be
accompanied by the following additional information
and documents, as applicable:
(A) if such Transfer Restricted
Security is being delivered to the Registrar
by a Holder for registration in the name of
such Holder, without transfer, a
certification from such Holder to that
effect (in substantially the form set forth
on the reverse of the Security); or
(B) if such Transfer Restricted
Security is being transferred to a
"qualified institutional buyer" (within the
meaning of Rule 144A promulgated under the
Securities Act) that is aware that any sale
of Securities to it will be made in reliance
on Rule 144A under the Securities Act and
that is acquiring such Transfer Restricted
Security for its own account or for the
account of another such "qualified
institutional buyer," a certification from
such Holder to that effect (in substantially
the form set forth on the reverse of the
Security); or
(C) if such Transfer Restricted
Security is being transferred pursuant to an
exemption from registration in accordance
with Rule 144, or outside the United States
in an offshore transaction in compliance
with Rule 904 under the Securities Act, or
pursuant to an effective registration
statement under the Securities Act, a
certification from such Holder to that
23
effect (in substantially the form set forth
on the reverse of the Security); or
(D) if such Transfer Restricted
Security is being transferred in reliance on
another exemption from the registration
requirements of the Securities Act and with
all applicable securities laws of the States
of the United States, a certification from
such Holder to that effect (in substantially
the form set forth on the reverse of the
Security) and an Opinion of Counsel
reasonably acceptable to the Company and to
the Registrar, if the Company so requests,
to the effect that such transfer is in
compliance with the Securities Act.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A
BENEFICIAL INTEREST IN A GLOBAL SECURITY. A Definitive Security may not
be exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the
Trustee, together with:
(i) if such Definitive Security is a Transfer
Restricted Security, certification, substantially in the form
set forth on the reverse of the Security, that such Definitive
Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Security is a
Transfer Restricted Security, written instructions directing
the Trustee to make, or to direct the Securities Custodian to
make, an endorsement on the Global Security to reflect an
increase in the aggregate principal amount of the Securities
represented by the Global Security,
then the Trustee shall cancel such Definitive Security and cause, or
direct the Securities Custodian to cause, in accordance with the
standing instructions and procedures existing between the Depositary
and the Securities Custodian, the aggregate principal amount of
Securities represented by the Global Security to be increased
accordingly. If no Global Securities are then outstanding, the Company
shall issue and the Trustee shall authenticate a new Global Security in
the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES. The transfer
and exchange of Global Securities or beneficial interests therein shall
be effected through the Depositary, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL SECURITY FOR
A DEFINITIVE SECURITY.
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange such beneficial
interest for a Definitive Security. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from the
Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Security, and upon receipt by
the Trustee of a written instruction or such other form of
instructions as is customary for the Depositary or the Person
designated by the Depositary as having such a beneficial
interest in a Transfer Restricted Security only, the following
additional information and documents (all of which may be
submitted by facsimile):
24
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification from the transferor to that effect (in
substantially the form set forth on the reverse of
the Security); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer"
(within the meaning of Rule 144A promulgated under
the Securities Act), that is aware that any sale of
Securities to it will be made in reliance on Rule
144A under the Securities Act and that is acquiring
such beneficial interest in the Transfer Restricted
Security for its own account or the account of
another such "qualified institutional buyer," a
certification to that effect from the transferor (in
substantially the form set forth on the reverse of
the Security); or
(C) if such beneficial interest is being
transferred pursuant to an exemption from
registration in accordance with Rule 144, or outside
the United States in an offshore transaction in
compliance with Rule 904 under the Securities Act, or
pursuant to an effective registration statement under
the Securities Act, a certification from the
transferor to that effect (in substantially the form
set forth on the reverse of the Security); or
(D) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act and
in accordance with all applicable securities laws of
the States of the United States, a certification to
that effect from the transferor (in substantially the
form set forth on the reverse of the Security) and an
Opinion of Counsel from the transferee or transferor
reasonably acceptable to the Company and to the
Registrar, if the Company so requests, to the effect
that such transfer is in compliance with the
Securities Act,
then the Trustee or the Securities Custodian, at the direction of the
Trustee, will cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities
Custodian, the aggregate principal amount of the Global Security to be
reduced and, following such reduction, the Company will execute and,
upon receipt of an authentication order in the form of an Officers'
Certificate, the Trustee's authenticating agent will authenticate and
deliver to the transferee a Definitive Security.
(ii) Definitive Securities issued in exchange for a
beneficial interest in a Global Security pursuant to this
Section 2.6(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Securities to the persons in whose
names such Securities are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL
SECURITIES. Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in subsection (f) of this Section
2.6), a Global Security may not be transferred as a whole except 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.
25
(f) AUTHENTICATION OF DEFINITIVE SECURITIES IN ABSENCE OF
DEPOSITARY. If at any time:
(i) the Depositary for the Securities notifies the
Company that the Depositary is unwilling or unable to continue
as Depositary for the Global Securities and a successor
Depositary for the Global Securities is not appointed by the
Company within ninety days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Securities under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an
Officers' Certificate requesting the authentication and delivery of
Definitive Securities, will, or its authenticating agent will,
authenticate and deliver Definitive Securities, in an aggregate
principal amount equal to the principal amount of the Global
Securities, in exchange for such Global Securities.
(g) LEGENDS.
(i) Except as permitted by the following paragraph
(ii), each Security certificate evidencing the Global
Securities and the Definitive Securities (and all Securities
issued in exchange therefor or substitution thereof) shall
bear a legend in substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD 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, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) 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 "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT
WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF TRANSFER
OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO COMPASS AEROSPACE CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON 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
LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
COMPASS AEROSPACE CORPORATION THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME
26
PERIOD REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT
AFTER THE ORIGINAL ISSUANCE OF THE NOTES THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND COMPASS AEROSPACE CORPORATION SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY 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."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted
Security represented by a Global Security) pursuant to Rule
144 under the Act or an effective registration statement under
the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the Registrar
shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth
above and rescind any restriction on the transfer of
such Transfer Restricted Security; and
(B) any such Transfer Restricted Security
represented by a Global Security shall not be subject
to the provisions set forth in (i) above (such sales
or transfers being subject only to the provisions of
Section 2.6(c) hereof); PROVIDED, HOWEVER, that with
respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global
Security for a Definitive Security that does not bear
a legend, which request is made in reliance upon Rule
144, the Holder thereof shall certify in writing to
the Registrar that such request is being made
pursuant to Rule 144 (such certification to be
substantially in the form set forth on the reverse of
the Security).
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL SECURITY. At such
time as all beneficial interests in a Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or
cancelled, such Global Security shall be returned to or retained and
cancelled by the Trustee. At any time prior to such cancellation, if
any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or cancelled, the
principal amount of Securities represented by such Global Security
shall be reduced and an endorsement shall be made on such Global
Security, by the Trustee or the Securities Custodian, at the direction
of the Trustee, to reflect such reduction.
(i) OBLIGATIONS WITH RESPECT TO TRANSFERS AND EXCHANGES OF
DEFINITIVE SECURITIES.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee or any
authenticating agent of the Trustee shall authenticate
Definitive Securities and Global Securities at the Registrar's
request.
(iv) No service charge shall be made to a Holder for
any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover
27
any transfer tax, assessments, or similar governmental charge
payable in connection therewith (other than any such transfer
taxes, assessments, or similar governmental charge payable
upon exchanges or transfers pursuant to Section 2.2 (fourth
paragraph), 2.10, 3.7, 4.14 (clause 8 of the sixth paragraph),
9.5, or 10.1 hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to
Article III, except the unredeemed portion of any Definitive
Security being redeemed in part, or (b) any Security for a
period beginning 15 Business Days before the mailing of a
notice of an offer to repurchase pursuant to Article X or
Section 4.14 hereof or redemption of Securities pursuant to
Article III hereof and ending at the close of business on the
day of such mailing.
(iv) The Trustee shall have no obligation or duty
to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in
any Security (including any transfers between or among
Depositary participants or beneficial owners of interests in
any Global Security) other than to require delivery of such
certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the
express requirements thereof.
SECTION 2.7. REPLACEMENT SECURITIES.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims and submits an affidavit or other evidence, satisfactory to
the Trustee, to the Trustee to the effect that the Security has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements are met. If
required by the Trustee or the Company, such Holder must provide an indemnity
bond or other indemnity, sufficient in the judgment of both the Company and the
Trustee, to protect the Company, the Trustee or any Agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge such
Holder for its reasonable, out-of-pocket expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.8. OUTSTANDING SECURITIES.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee (including any Security represented by a
Global Security) except those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Security effected by
the Trustee hereunder and those described in this Section 2.8 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security, except as provided in Section
2.9 hereof.
If a Security is replaced pursuant to Section 2.7 hereof (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a BONA FIDE purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section 2.7
hereof.
If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company or an Affiliate of the Company) holds cash sufficient to pay
all of the principal and interest and premium, if any,
28
due on the Securities payable on that date and payment of the Securities
called for redemption is not otherwise prohibited, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.9. TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, amendment, supplement, waiver or
consent, Securities owned by the Company or Affiliates of the Company shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, amendment, supplement,
waiver or consent, only Securities that a Trust Officer of the Trustee knows are
so owned shall be disregarded.
SECTION 2.10. TEMPORARY SECURITIES.
Until Definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company reasonably and in good faith consider
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall, upon receipt of a written order of the
Company in the form of an Officers' Certificate, authenticate Definitive
Securities in exchange for temporary Securities. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as permanent Securities authenticated and delivered
hereunder.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration, transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent (other than the Company or an Affiliate of the Company), and no one
else, shall cancel and, without the written direction of the Company to the
contrary, shall dispose of all Securities surrendered for transfer, exchange,
payment or cancellation. Subject to Section 2.7 hereof, the Company may not
issue new Securities to replace Securities that have been paid or delivered to
the Trustee for cancellation. No Securities shall be authenticated in lieu of or
in exchange for any Securities cancelled as provided in this Section 2.11
hereof, except as expressly permitted in the form of Securities and as permitted
by this Indenture.
SECTION 2.12. DEFAULTED INTEREST.
Interest on any Security 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 Security (or one or more predecessor Securities) is registered
at the close of business on the Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date plus any interest
payable on the defaulted interest at the rate and in the manner provided in
Section 4.1 hereof and the Security (herein called "Defaulted Interest"), shall
forthwith cease to be payable to the registered holder on the relevant Record
Date, or, as applicable, the Special Record Date (as defined below), and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
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(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee and the Paying Agent in writing of the amount
of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit
with the Paying Agent an amount of cash equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Paying Agent for such deposit prior to
the date of the proposed payment, such cash when deposited to be held
in trust for the benefit of the persons entitled to such Defaulted
Interest as provided in this clause (1). Thereupon the Paying Agent
shall fix a special record date for the payment of such Defaulted
Interest (a "Special Record Date"), which shall be not 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 Paying Agent
of the notice of the proposed payment. The Paying Agent shall promptly
notify the Company and the Trustee of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at
his address as it appears in the Security register not less than 10
days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Securities (or their respective predecessor
Securities) are registered on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee and the Paying Agent of the proposed
payment pursuant to this clause, such manner shall be deemed
practicable by the Trustee and the Paying Agent.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon the registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION
SECTION 3.1. RIGHT OF REDEMPTION.
Redemption of Securities, as permitted by the provisions of this
Indenture, shall be made in accordance with such provisions and this Article
III. The Company shall not have the right to redeem any Securities prior to
April 15, 2002, other than as provided in the next paragraph and Paragraph 5 of
the
30
Securities. On or after April 15, 2002, the Company shall have the right to
redeem all or any part of the Securities for cash at the Redemption Prices
specified in the form of Security attached as Exhibit A set forth therein in
Paragraph 5 thereof, in each case (subject to the right of Holders of record on
a Record Date to receive interest due on an Interest Payment Date that is on or
prior to such Redemption Date, and subject to the provisions set forth in
Section 3.5), including accrued and unpaid interest and Liquidated Damages, if
any, thereon to the Redemption Date.
Notwithstanding the foregoing, prior to April 15, 2001, upon an Initial
Public Equity Offering of common stock for cash of the Company, up to 35% of the
aggregate principal amount of the Securities originally outstanding may be
redeemed at the option of the Company within 90 days of such Initial Public
Equity Offering, on not less than 30 days, but not more than 60 days, notice to
each holder of the Securities to be redeemed, with cash from the Net Cash
Proceeds to the Company of such Initial Public Equity Offering, at a redemption
price equal to 110.125% of principal, (subject to the right of Holders of record
on a Record Date to receive interest due on an Interest Payment Date that is on
or prior to such Redemption Date) together with accrued and unpaid interest and
Liquidated Damages, if any, to the date of redemption; PROVIDED, HOWEVER, that
at least 65% of the aggregate principal amount of the Securities originally
outstanding remain outstanding immediately following such redemption.
Except as provided in this paragraph and Paragraph 5 of the Securities,
the Securities may not otherwise be redeemed at the option of the Company.
SECTION 3.2. NOTICES TO TRUSTEE.
If the Company elects to redeem Securities pursuant to Paragraph 5 of
the Securities, it shall notify the Trustee and the Paying Agent in writing of
the Redemption Date and the principal amount of Securities to be redeemed and
whether it wants the Paying Agent to give notice of redemption to the Holders.
If the Company elects to reduce the principal amount of Securities to
be redeemed pursuant to Paragraph 5 of the Securities by crediting against any
such redemption Securities it has not previously delivered to the Trustee and
the Paying Agent for cancellation, it shall so notify the Trustee, in the form
of an Officers' Certificate, and the Paying Agent of the amount of the reduction
and deliver such Securities with such notice.
The Company shall give each notice to the Trustee and the Paying Agent
provided for in this Section 3.2 at least 40 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee and the Paying
Agent). Any such notice may be cancelled at any time prior to notice of such
redemption being mailed to any Holder and shall thereby be void and of no
effect.
SECTION 3.3. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all of the Securities are to be redeemed pursuant to
Paragraph 5 thereof, the Trustee shall select the Securities to be redeemed on a
PRO RATA basis, by lot or by such other method as the Trustee shall determine to
be appropriate and fair and in such manner as complies with any applicable
Depositary, legal and stock exchange requirements.
The Trustee shall make the selection from the Securities outstanding
and not previously called for redemption and shall promptly notify the Company
and the Paying Agent in writing of the Securities selected for redemption and,
in the case of any Security selected for partial redemption, the principal
amount thereof to be redeemed. Securities in denominations of $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the
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principal of Securities that have denominations larger than $1,000. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.4. NOTICE OF REDEMPTION.
At least 30 days, but not more than 60 days prior to the Redemption
Date, the Company shall mail a notice of redemption by first class mail, postage
prepaid, to the Trustee, the Paying Agent and each Holder whose Securities are
to be redeemed. At the Company's request, the Paying Agent shall give the notice
of redemption in the Company's name and at the Company's expense. Each notice
for redemption shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including accrued and unpaid
interest and Liquidated Damages, if any, to be paid upon such
redemption;
(3) the name and address of the Paying Agent and the
Registrar;
(4) that Securities called for redemption must be surrendered
to the Paying Agent at the address specified in such notice to collect
the Redemption Price;
(5) that, unless (a) the Company defaults in its obligation
to deposit with the Paying Agent cash which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms shall provide the amount to fund the Redemption Price in
accordance with Section 3.6 hereof or (b) such redemption payment is
prohibited, interest on Securities called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of
the Holders of such Securities is to receive payment of the Redemption
Price, including accrued and unpaid interest (and Liquidated Damages,
if any) to the Redemption Date, upon surrender to the Paying Agent of
the Securities called for redemption and to be redeemed;
(6) if any Security is being redeemed in part, the portion of
the principal amount, equal to $1,000 or any integral multiple thereof,
of such Security to be redeemed and that, after the Redemption Date,
and upon surrender of such Security, a new Security or Securities in
aggregate principal amount equal to the unredeemed portion thereof
shall be issued;
(7) if less than all the Securities are to be redeemed, the
identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of such Securities
to be redeemed and the aggregate principal amount of Securities to be
outstanding after such partial redemption;
(8) the CUSIP number of the Securities to be redeemed; and
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the optional redemption provisions of Paragraph 5
of the Securities.
SECTION 3.5. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4
hereof, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price, including accrued and unpaid
interest (and Liquidated Damages, if any) to the Redemption Date. Upon surrender
to the Trustee or Paying Agent, such Securities called for redemption shall be
paid at the Redemption
32
Price, including interest and Liquidated Damages, if any, accrued and unpaid to
the Redemption Date; PROVIDED that if the Redemption Date is after a regular
Record Date and on or prior to the Interest Payment Date, to which such Record
Date relates, the accrued interest (and Liquidated Damages, if any) shall be
payable to the Holder of the redeemed Securities registered on the relevant
Record Date; and PROVIDED, FURTHER, that if a Redemption Date is a Legal
Holiday, payment shall be made on the next succeeding Business Day and no
interest shall accrue for the period from such Redemption Date to such
succeeding Business Day.
SECTION 3.6. DEPOSIT OF REDEMPTION PRICE.
No later than 11:00 a.m. (New York time) on the Redemption Date, the
Company shall deposit in same day funds with the Paying Agent (other than the
Company or an Affiliate of the Company) cash sufficient to pay the Redemption
Price of all Securities to be redeemed on such Redemption Date (other than
Securities or portions thereof called for redemption on that date that have been
delivered by the Company to the Trustee for cancellation). The Paying Agent
shall promptly return to the Company any cash so deposited which is not required
for that purpose upon the written request of the Company.
If the Company complies with the preceding paragraph and payment of the
Securities called for redemption is not prohibited for any reason, interest on
the Securities to be redeemed shall cease to accrue on the applicable Redemption
Date, whether or not such Securities are presented for payment. Notwithstanding
anything herein to the contrary, if any Security surrendered for redemption in
the manner provided in the Securities shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall continue to accrue and be paid from the Redemption
Date until such payment is made on the unpaid principal, and, to the extent
lawful, on any interest not paid on such unpaid principal, in each case at the
rate and in the manner provided in Section 4.1 hereof and the Security.
SECTION 3.7. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is to be redeemed in part, the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder, without service charge to the Holder, a new Security or Securities equal
in principal amount to the unredeemed portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1. PAYMENT OF SECURITIES.
The Company shall pay the principal of and interest (and Liquidated
Damages, if any) on the Securities on the dates and in the manner provided
herein and in the Securities. An installment of principal of or interest (or
Liquidated Damages, if any) on the Securities shall be considered paid on the
date it is due if the Trustee or Paying Agent (other than the Company or an
Affiliate of the Company) holds for the benefit of the Holders (on or before
10:00 a.m. New York City time to the extent necessary to provide the funds to
the Depository in accordance with the Depository's procedures) on that date cash
deposited and designated for and sufficient to pay the installment.
The Company shall pay interest on overdue principal and on overdue
installments of interest (and Liquidated Damages, if any) at the rate specified
in the Securities compounded semi-annually, to the extent lawful.
33
SECTION 4.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company and the Guarantors shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company and the Guarantors in respect of the Securities and this Indenture
may be served. The Company and the Guarantors shall give prompt written notice
to the Trustee and the Paying Agent of the location, and any change in the
location, of such office or agency. If at any time the Company and the
Guarantors shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee and the Paying Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.2 hereof.
The Company and the Guarantors may also from time to time designate one
or more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company and the Guarantors of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York,
for such purposes. The Company and the Guarantors shall give prompt written
notice to the Trustee and the Paying Agent of any such designation or rescission
and of any change in the location of any such other office or agency. The
Company hereby initially designates the Corporate Trust Office of the Trustee as
such office.
SECTION 4.3. LIMITATION ON RESTRICTED PAYMENTS.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, make any Restricted Payment if,
after giving effect to such Restricted Payment on a PRO FORMA basis, (1) a
Default or an Event of Default shall have occurred and be continuing, (2) the
Company is not permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Debt Incurrence Ratio in Section 4.11 or (3) the aggregate
amount of all Restricted Payments made by the Company and its Subsidiaries,
including after giving effect to such proposed Restricted Payment, from and
after the Issue Date, would exceed, without duplication, the sum of (a) 50% of
the aggregate Consolidated Net Income of the Company for the period (taken as
one accounting period), commencing on the first day of the first full fiscal
quarter commencing after the Issue Date, to and including the last day of the
fiscal quarter ended immediately prior to the date of each such calculation (or,
in the event Consolidated Net Income for such period is a deficit, then minus
100% of such deficit), plus (b) the aggregate Net Cash Proceeds received by the
Company from a Capital Contribution or the sale of its Qualified Capital Stock
(other than (i) to a Subsidiary of the Company, (ii) to the extent applied in
connection with a Qualified Exchange and (iii) to the extent credited in (v) and
(w) in the following paragraph), after the Issue Date, plus (c) other than
amounts credited pursuant to clause (v) of the next following paragraph, the net
amount of any Restricted Investments (not to exceed the original amount of such
Investment) made after the Issue Date that are returned to the Company or the
Guarantor that made such prior Investment, without restriction in cash on or
prior to the date of any such calculation.
The foregoing clauses (2) and (3) of the immediately preceding
paragraph, however, will not prohibit (v) Restricted Investments in a Related
Business, PROVIDED, that, after giving PRO FORMA effect to such Investment, the
aggregate amount of all such Investments made on or after the Issue Date that
are outstanding (after giving effect to any such Investments that are returned
to the Company or the Guarantor that made such prior Investment, without
restriction, in cash on or prior to the date of any such calculation) at any
time does not exceed $4,000,000, (w) repurchases of Capital Stock from employees
of the Company or its Subsidiaries upon the death, disability or termination of
employment in an aggregate amount to all employees not to exceed $300,000 in any
fiscal year or $1,500,000 in the aggregate on and after the Issue Date net of
the Net Cash Proceeds received by the Company from subsequent reissuances of
such Qualified
34
Capital Stock to new employees that are not Excluded Persons, and the provisions
of the immediately preceding paragraph will not prohibit, (x) a Qualified
Exchange, (y) the payment of any dividend on Qualified Capital Stock within 60
days after the date of its declaration if such dividend could have been made on
the date of such declaration in compliance with the foregoing provisions or (z)
Permitted Payments to Parent. The full amount of any Restricted Payment made
pursuant to the foregoing clauses (v), (w), (y) and (z) (but not pursuant to
clause (x)) of the immediately preceding sentence, however, will be deducted in
the calculation of the aggregate amount of Restricted Payments available to be
made referred to in clause (3) of the immediately preceding paragraph.
In addition, the Company and the Guarantors will not, and will not
permit any of their Subsidiaries to, directly or indirectly, make any Management
Fee Payment or similar payment to Affiliates (other than Subsidiaries) other
than Permitted Payments to Parent if, after giving effect to such Management Fee
Payments or similar payments, on a PRO FORMA basis after giving effect to such
payment, a Default or an Event of Default shall have occurred and be continuing.
For purposes of this covenant, the amount of any Restricted Payment, if
other than in cash, shall be the fair market value thereof, as determined in the
good faith reasonable judgment of the Board of Directors of the Company.
Additionally, on the date of each Restricted Payment, the Company shall deliver
an Officers' Certificate to the Trustee describing in reasonable detail the
nature of such Restricted Payment, stating the amount of such Restricted
Payment, stating in reasonable detail the provisions of this Indenture pursuant
to which such Restricted Payment was made and certifying that such Restricted
Payment was made in compliance with the terms of this Indenture.
SECTION 4.4. CORPORATE AND PARTNERSHIP EXISTENCE.
Except as otherwise permitted by Article V, Section 4.14 or Section
11.4, the Company and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their respective
corporate, partnership or other organizational existence, as the case may be,
and the corporate, partnership or other organizational existence, as the case
may be, of each of their Subsidiaries in accordance with the respective
organizational documents of each of them and the material rights (charter and
statutory) and material corporate franchises of the Company, the Guarantors and
each of their respective Subsidiaries; PROVIDED, HOWEVER, that neither the
Company nor any Guarantor shall be required to preserve, with respect to
themselves, any right or franchise, and with respect to any of their respective
Subsidiaries, any such existence, right or franchise, if (a) the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and (b) the loss thereof is not adverse in any
material respect to the Holders.
SECTION 4.5. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company and the Guarantors shall, and shall cause each of their
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company, any Guarantor or any
of their Subsidiaries or any of their respective properties and assets and (ii)
all lawful claims, whether for labor, materials, supplies or services, which
have become due and payable and which by law have or may become a Lien upon the
property and assets of the Company, any Guarantor or any of their Subsidiaries;
PROVIDED, HOWEVER, that neither the Company nor any Guarantor shall be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been established in accordance with GAAP.
35
SECTION 4.6. MAINTENANCE OF PROPERTIES AND INSURANCE.
The Company and the Guarantors shall cause all material properties used
or useful to the conduct of their business and the business of each of their
Subsidiaries to be maintained and kept in good condition, repair and working
order (reasonable wear and tear excepted) and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in their reasonable
judgment may be necessary, so that the business carried on in connection
therewith may be properly conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section 4.6 shall prevent the Company or any Guarantor from
discontinuing any operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is (a)(i) in the
judgment of the Company, desirable in the conduct of the business of the Company
and (ii) not adverse in any material respect to the Holders or (b) otherwise
permitted under Section 4.14.
The Company and the Guarantors shall provide, or cause to be provided,
for themselves and each of their Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company, the Guarantors and
such Subsidiaries in a prudent manner, with (except for self-insurance)
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the reasonable, good faith opinion of
the Company and adequate and appropriate for the conduct of the business of the
Company, the Guarantors and such Subsidiaries in a prudent manner for entities
similarly situated in the industry.
SECTION 4.7. COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee within 120 days
after the end of its fiscal year an Officers' Certificate, one of the
signers of which shall be the principal executive, principal financial
or principal accounting officer of the Company, complying with Section
314(a)(4) of the TIA and stating that a review of its activities and
the activities of its Subsidiaries, if any, during the preceding fiscal
year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed
and fulfilled its obligations under this Indenture (without regard to
notice requirements or grace periods) and further stating, as to each
such Officer signing such certificate, whether or not the signer knows
of any failure by the Company, any Guarantor or any Subsidiary of the
Company to comply with any conditions or covenants in this Indenture
and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity. The
Officers' Certificate shall also notify the Trustee should the relevant
fiscal year end on any date other than the current fiscal year end
date.
(b) The Company shall, so long as any of the Securities are
outstanding, deliver to the Trustee, promptly upon becoming aware of
any Default or Event of Default, an Officers' Certificate specifying
such Default or Event of Default and what action the Company is taking
or proposes to take with respect thereto. The Trustee shall not be
deemed to have knowledge of any Default, any Event of Default or any
such fact unless one of its Trust Officers receives written notice
thereof from the Company or any of the Holders.
SECTION 4.8. REPORTS.
Whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and, to each Holder and to prospective purchasers of Securities
identified to the Company by the Initial Purchaser, within 15 days after it is
or would have
36
been (if it were subject to such reporting obligations) required to file such
with the Commission, (i) all annual and quarterly financial statements
substantially equivalent to financial statements that would have been included
in reports filed with the Commission on Forms 10-K and 10-Q, if the Company were
subject to the requirements of Section 13 or 15(d) of the Exchange Act,
including, with respect to annual information only, a report thereon by the
Company's certified independent public accountants as such would be required in
such reports to the Commission and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports; and, in each case, together with a management's
discussion and analysis of financial condition and results of operations which
would be so required and, unless the Commission shall not accept such reports,
file with the Commission the annual, quarterly and other reports which it is or
would have been required to file with the Commission.
SECTION 4.9. LIMITATION ON STATUS AS INVESTMENT COMPANY.
The Company and the Guarantors shall not and shall not permit any of
their Subsidiaries to become required to register as an "investment company" (as
that term is defined in the Investment Company Act of 1940, as amended), or
otherwise become subject to regulation under the Investment Company Act.
SECTION 4.10. LIMITATION ON TRANSACTIONS WITH AFFILIATES.
Neither the Company nor any of its Subsidiaries shall be permitted on
or after the Issue Date to enter into or suffer to exist any contract,
agreement, arrangement or transaction with any Affiliate (an "Affiliate
Transaction"), or any series of related Affiliate Transactions, (other than
Exempted Affiliate Transactions), (i) unless it is determined that the terms of
such Affiliate Transaction are fair and reasonable to the Company, and no less
favorable to the Company, than could have been obtained in an arm's length
transaction with a non-Affiliate, and (ii) if involving consideration to either
party in excess of $1,000,000, unless such Affiliate Transaction(s) is evidenced
by an Officers' Certificate addressed and delivered to the Trustee certifying
that such Affiliate Transaction (or Affiliate Transactions) have been approved
by a majority of the members of the Board of Directors that are disinterested in
such transaction and (iii) if involving consideration to either party in excess
of $5,000,000, unless in addition the Company, prior to the consummation
thereof, obtains a written favorable opinion as to the fairness of such
transaction to the Company from a financial point of view from an independent
investment banking firm of national reputation or, if pertaining to a matter for
which such investment banking firms do not customarily render such opinions, an
appraisal or valuation firm of national reputation.
SECTION 4.11. LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND
DISQUALIFIED CAPITAL STOCK.
Except as set forth in this covenant, the Company and the Guarantors
shall not, and shall not permit any of their Subsidiaries to, directly or
indirectly, issue, assume, guaranty, incur, become directly or indirectly liable
with respect to (including as a result of an Acquisition), or otherwise become
responsible for, contingently or otherwise (individually and collectively, to
"incur" or, as appropriate, an "incurrence"), any Indebtedness or any
Disqualified Capital Stock (including Acquired Indebtedness), other than
Permitted Indebtedness. Notwithstanding the foregoing if (i) no Default or Event
of Default shall have occurred and be continuing at the time of, or would occur
after giving effect on a PRO FORMA basis to, such incurrence of Indebtedness or
Disqualified Capital Stock and (ii) on the date of such incurrence (the
"Incurrence Date"), the Consolidated Coverage Ratio of the Company for the
Reference Period immediately preceding the Incurrence Date, after giving effect
on a PRO FORMA basis to such incurrence of such Indebtedness or Disqualified
Capital Stock and, to the extent set forth in the definition of Consolidated
Coverage Ratio, the use of proceeds thereof, would be at least 2 to 1 (as
applicable, each the "Debt
37
Incurrence Ratio"), then the Company may incur such Indebtedness or Disqualified
Capital Stock and the Guarantors may incur such Indebtedness (other than
Disqualified Capital Stock).
In addition, the foregoing limitations will not apply to:
(a) the incurrence by the Company or any Guarantor of Purchase
Money Indebtedness, PROVIDED, that (i) the aggregate principal amount
of such Indebtedness incurred on or after the Issue Date and
outstanding at any time pursuant to this paragraph (a) (including any
Refinancing Indebtedness and other Indebtedness issued to refinance,
replace, defease or refund such Indebtedness) shall not exceed
$2,000,000, and (ii) in each case, such Indebtedness shall not
constitute more than 100% of the cost (determined in accordance with
GAAP) to the Company or such Guarantor, as applicable, of the property
so purchased or leased;
(b) if no Event of Default shall have occurred and be
continuing, the incurrence by the Company or any Guarantor of
Indebtedness in an aggregate principal amount outstanding at any time
(including Refinancing Indebtedness and other Indebtedness incurred to
refinance, replace, defease or refund such Indebtedness) of up to
$5,000,000;
(c) the incurrence by the Company or any Guarantor of Mortgage
Indebtedness or Indebtedness pursuant to the Credit Agreement up to an
aggregate principal amount outstanding under the Credit Agreement or of
Mortgage Indebtedness collectively (in each case including any
Refinancing Indebtedness and other Indebtedness incurred to refinance,
replace, defease or refund such Indebtedness) not to exceed in the
aggregate $12,000,000, PROVIDED, THAT (A) in the case of Indebtedness
pursuant to the Credit Agreement minus the amount of any such
Indebtedness (i) retired with the Net Cash Proceeds from any Asset Sale
applied to permanently reduce the outstanding amounts or the
commitments with respect to such Indebtedness pursuant to clause
(1)(b)(ii) of the first paragraph of Section 4.14 or (ii) assumed by a
transferee in an Asset Sale, and (B) in the case of Mortgage
Indebtedness such Indebtedness shall not constitute more than 100% of
the cost (determined in accordance with GAAP) to the Company or such
Guarantor, as applicable, of such mortgaged real estate asset.
Indebtedness or Disqualified Capital Stock of any Person which is
outstanding at the time such Person becomes a Subsidiary of the Company
(including upon designation of any subsidiary or other person as a Subsidiary)
or is merged with or into or consolidated with the Company or a Subsidiary of
the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or
consolidated with the Company or a Subsidiary of the Company, as applicable.
Upon each incurrence of Indebtedness, the Company may designate under
which provision of this covenant such Indebtedness is being incurred and such
Indebtedness should be deemed to have been so incurred under such provision and
no other provision of this covenant except as specifically provided otherwise.
SECTION 4.12. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING SUBSIDIARIES.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, create, assume or suffer to exist
any consensual restriction on the ability of any Subsidiary of the Company to
pay dividends or make other distributions to or on behalf of, or to pay any
obligation to or on behalf of, or otherwise to transfer assets or property to or
on behalf of, or make or pay loans or advances to or on behalf of, the Company
or any Subsidiary of the Company, except (a) restrictions imposed by the
Securities or this Indenture or by other indebtedness of the Company (which
38
may also be guaranteed by the Guarantors) ranking senior or PARI PASSU with the
Securities or the guarantees, as applicable, provided such restrictions are no
more restrictive than those imposed by this Indenture and the Securities, (b)
restrictions imposed by applicable law, (c) existing restrictions under
Indebtedness outstanding on the Issue Date, including pursuant to the Credit
Agreement, (d) restrictions under any Acquired Indebtedness not incurred in
violation of this Indenture or any agreement relating to any property, asset, or
business acquired by the Company or any of its Subsidiaries, which restrictions
in each case existed at the time of acquisition, were not put in place in
connection with or in anticipation of such acquisition and are not applicable to
any person, other than the person acquired, or to any property, asset or
business, other than the property, assets and business so acquired, (e) any such
restriction or requirement imposed by Indebtedness incurred under the Credit
Agreement pursuant to Section 4.11 provided such restriction or requirement is
no more restrictive than that imposed by the Credit Agreement as of the Issue
Date, (f) restrictions with respect solely to a Subsidiary of the Company
imposed pursuant to a binding agreement which has been entered into for the sale
or disposition of all or substantially all of the Equity Interests or assets of
such Subsidiary, provided such restrictions apply solely to the Equity Interests
or assets of such Subsidiary which are being sold (g) restrictions on transfer
contained in Purchase Money Indebtedness or Mortgage Indebtedness incurred
pursuant to Section 4.11 provided such restrictions relate only to the transfer
of the property acquired with the proceeds of such Purchase Money Indebtedness
or Mortgage Indebtedness, as applicable and (h) in connection with and pursuant
to permitted Refinancings, replacements of restrictions imposed pursuant to
clauses (a), (c) or (d) of this paragraph that are not more restrictive than
those being replaced and do not apply to any other person or assets than those
that would have been covered by the restrictions in the Indebtedness so
refinanced. Notwithstanding the foregoing, neither (a) customary provisions
restricting subletting or assignment of any lease entered into in the ordinary
course of business, consistent with industry practice, nor (b) Liens permitted
under the terms of this Indenture on assets securing Senior Debt, Purchase Money
Indebtedness, or Mortgage Indebtedness incurred in accordance with Section 4.11
shall in and of themselves be considered a restriction on the ability of the
applicable Subsidiary to transfer such agreement or assets, as the case may be.
SECTION 4.13. LIMITATIONS ON LAYERING INDEBTEDNESS.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, directly or indirectly, incur, or suffer to exist any
Indebtedness (other than the Securities) that is subordinate in right of payment
to any other Indebtedness of the Company or a Guarantor unless, by its terms,
such Indebtedness is subordinate in right of payment to, or ranks PARI PASSU
with, the Securities or the Guarantees, as applicable.
SECTION 4.14. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, in one or a series of related transactions, convey, sell,
transfer, assign or otherwise dispose of, directly or indirectly, any of its
property, business or assets, including by merger or consolidation (in the case
of a Subsidiary of the Company), and including any sale or other transfer or
issuance of any Equity Interests of any Subsidiary of the Company, whether by
the Company or a Subsidiary of either or through the issuance, sale or transfer
of Equity Interests by a Subsidiary of the Company, and including any sale and
leaseback transaction (any of the foregoing, an "Asset Sale"), unless (l)(a) the
Net Cash Proceeds therefrom (the "Asset Sale Offer Amount") are applied (i)
within 270 days after the date of such Asset Sale to the optional redemption of
the Securities in accordance with the terms of this Indenture and other
Indebtedness of the Company ranking on a parity with the Securities and with
similar provisions requiring the Company to redeem such Indebtedness with the
proceeds for asset sales, pro rata in proportion to the respective principal
amounts (or accreted values in the case of Indebtedness issued with an original
issue discount) of the Securities and such other Indebtedness then outstanding
or (ii) within 300 days after the date of such Asset Sale to the repurchase of
the Securities and such other Indebtedness on a parity with the Securities
39
and with similar provisions requiring the Company to make an offer to purchase
such Indebtedness with the proceeds for asset sales pursuant to a cash offer
(subject only to conditions required by applicable law, if any) (pro rata in
proportion to the respective principal amounts (or accreted values in the case
of Indebtedness issued with an original issue discount) of the Securities and
such other Indebtedness then outstanding) (the "Asset Sale Offer") at a purchase
price of 100% of principal amount (or accreted value in the case of Indebtedness
issued with an original issue discount) (the "Asset Sale Offer Price") together
with accrued and unpaid interest and Liquidated Damages, if any, to the date of
payment, made within 270 days of such Asset Sale or (b) within 270 days
following such Asset Sale, the Asset Sale Offer Amount is (i) invested (or
committed, pursuant to a binding commitment subject only to reasonable,
customary closing conditions, to be invested, and in fact is so invested, within
an additional 90 days) in tangible assets and property other than notes, bonds,
obligations and securities) which in the good faith reasonable judgment of the
Board will immediately constitute or be a part of a Related Business of the
Company or such Subsidiary (if it continues to be a Subsidiary) immediately
following such transaction or (ii) used to retire Purchase Money Indebtedness,
Mortgage Indebtedness or Senior Debt and, to permanently reduce (in the case of
Senior Debt that is not Purchase Money Indebtedness or Mortgage Indebtedness)
the amount of such Indebtedness, incurred under Section 4.11 hereof (including
that in the case of a revolver or similar arrangement that makes credit
available, such commitment is so permanently reduced by such amount), (2) at
least 90% of the consideration for such Asset Sale or series of related Asset
Sales consists of cash or Cash Equivalents, (3) no Default or Event of Default
shall have occurred and be continuing at the time of, or would occur after
giving effect, on a PRO FORMA basis, to, such Asset Sale, and (4) the Board of
Directors of the Company determines in good faith that the Company or such
Subsidiary, as applicable, receives fair market value for such Asset Sale.
Notwithstanding, and without complying with, the provisions of this
covenant:
(i) the Company and its Subsidiaries may, in the
ordinary course of business, (1) convey, sell, transfer,
assign or otherwise dispose of inventory and other assets
acquired and held for resale in the ordinary course of
business and (2) liquidate Cash Equivalents;
(ii) the Company and its Subsidiaries may convey,
sell, transfer, assign or otherwise dispose of assets pursuant
to and in accordance with Section 5.1;
(iii) the Company and its Subsidiaries may sell or
dispose of damaged, worn out, scrap or other obsolete property
in the ordinary course of business so long as such property is
no longer necessary for the proper conduct of the business of
the Company or such Subsidiary, as applicable; and
(iv) the Company and the Guarantors may convey,
sell, transfer, assign or otherwise dispose of assets to the
Company or any of its Wholly-Owned Subsidiary Guarantors;
(v) the Company and its Subsidiaries, in the ordinary
course of business, may convey, sell, transfer, assign, or
otherwise dispose of assets (or related assets in related
transactions) with a fair market value of less than $250,000;
and
(vi) the Company and each of its Subsidiaries may
surrender or waive contract rights or settle, release or
surrender contract, tort or other claims of any kind or grant
Liens not prohibited by this Indenture;
40
An acquisition of Securities pursuant to an Asset Sale Offer may be
deferred until the accumulated Net Cash Proceeds from Asset Sales not applied to
the uses set forth in 1(a)(i) or 1(b) above (the "Excess Proceeds") exceeds
$5,000,000 and that each Asset Sale Offer shall remain open for 20 Business Days
following its commencement (the "Asset Sale Offer Period"). Upon expiration of
the Asset Sale Offer Period, the Company shall apply the Asset Sale Offer Amount
plus an amount equal to accrued and unpaid interest and Liquidated Damages, if
any, to the purchase of all Indebtedness properly tendered (on a PRO RATA basis
if the Asset Sale Offer Amount is insufficient to purchase all Indebtedness so
tendered) at the Asset Sale Offer Price (together with accrued interest and
Liquidated Damages, if any). To the extent that the aggregate amount of
Securities and such other PARI PASSU Indebtedness tendered pursuant to an Asset
Sale Offer is less than the Asset Sale Offer Amount, the Company may use any
remaining Net Cash Proceeds for general corporate purposes as otherwise
permitted by this Indenture and following each Asset Sale Offer the Excess
Proceeds amount shall be reset to zero. For purposes of (2) above, total
consideration received means the total consideration received for such Asset
Sales minus the amount of, (a) Purchase Money Indebtedness or Mortgage
Indebtedness secured solely by the assets sold and assumed by a transferee and
(b) property that within 30 days of such Asset Sale is converted into cash or
Cash Equivalents, PROVIDED that such cash and Cash Equivalents shall be treated
as Net Cash Proceeds attributable to the original Asset Sale for which such
property was received.
All Net Cash Proceeds from an Event of Loss relating to a Material
Facility shall be invested, used for prepayment of Senior Indebtedness or used
to repurchase Securities, all within the period and as otherwise provided above
in clauses 1(a) or 1(b)(i) of the first paragraph of this Section 4.14 plus 90
days.
In addition to the foregoing and notwithstanding anything herein to the
contrary, the Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly make any Asset Sale of any of the Equity Interests of
any Subsidiary of the Company (other than the Company or a Wholly-Owned
Subsidiary Guarantor) except pursuant to an Asset Sale of all the Equity
Interests of such Subsidiary.
Notice of an Asset Sale Offer shall be sent, on or prior to the
commencement of the Asset Sale Offer, by first-class mail, by the Company to
each Holder at its registered address, with a copy to the Trustee. The notice to
the Holders shall contain all information, instructions and materials required
by applicable law or otherwise material to such Holders' decision to tender
Securities pursuant to the Asset Sale Offer. The notice, which (to the extent
consistent with this Indenture) shall govern the terms of an Asset Sale Offer,
shall state:
(1) that the Asset Sale Offer is being made pursuant to such
notice and this Section 4.14;
(2) the Asset Sale Offer Amount, the Asset Sale Offer Price
(including the amount of accrued but unpaid interest (and Liquidated
Damages, if any)), and the date of purchase;
(3) that any Security or portion thereof not tendered or
accepted for payment will continue to accrue interest if interest is
then accruing;
(4) that, unless the Company defaults in depositing cash with
the Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding anything in this Indenture to the contrary, be the
Company or any Affiliate of the Company), in accordance with the last
paragraph of this Section 4.14 any Security, or portion thereof,
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Asset Sale Purchase Date;
(5) that Holders electing to have a Security, or portion
thereof, purchased pursuant to an Asset Sale Offer will be required to
surrender their Security, with the form entitled "Option
41
of Holder to Elect Purchase" on the reverse of the Security completed,
to the Paying Agent (which may not for purposes of this Section 4.14,
notwithstanding any other provision of this Indenture, be the Company
or any Affiliate of the Company) at the address specified in the
notice;
(6) that Holders will be entitled to withdraw their
elections, in whole or in part, if the Paying Agent receives, prior to
the expiration of the Asset Sale Offer, a facsimile transmission or
letter setting forth the name of the Holder, the principal amount of
the Securities the Holder is withdrawing and a statement containing a
facsimile signature and stating that such Holder is withdrawing his
election to have such principal amount of the Securities purchased;
(7) that if Indebtedness in a principal amount in excess of
the principal amount of Securities to be acquired pursuant to the Asset
Sale Offer are tendered and not withdrawn, the Company shall purchase
Indebtedness on a PRO RATA basis in proportion to the respective
principal amounts (or accreted values in the case of Indebtedness
issued with an original issue discount) thereof (with such adjustments
as may be deemed appropriate by the Company so that only Securities in
denominations of $1,000 or integral multiples of $1,000 shall be
acquired);
(8) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; and
(9) the circumstances and relevant facts regarding such Asset
Sales.
Any Asset Sale Offer shall be made in compliance with all applicable
laws, rules, and regulations, including, if applicable, Regulation 14E of the
Exchange Act and the rules and regulations thereunder and all other applicable
Federal and state securities laws. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this paragraph,
compliance by the Company or any of its subsidiaries with such laws and
regulations shall not in and of itself cause a breach of its obligations under
such covenant.
On or before the date of purchase, the Company shall (i) accept for
payment Securities or portions thereof properly tendered pursuant to the Asset
Sale Offer (on a PRO RATA basis if required pursuant to paragraph (7) above),
(ii) deposit with the Paying Agent cash sufficient to pay the Asset Sale Offer
Price for all Securities or portions thereof so accepted and (iii) deliver to
the Trustee Securities so accepted together with an Officers' Certificate
setting forth the Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the Asset Sale Offer Price for such
Securities, and the Company shall promptly issue a new Security and the Trustee,
upon written request of the Company, shall promptly authenticate and mail or
deliver to such Holders such new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Securities not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof.
If the payment date in connection with an Asset Sale Offer hereunder is
on or after an interest payment Record Date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and Liquidated Damages,
if any, due on such Interest Payment Date) will be paid to the person in whose
name a Security is registered at the close of business on such Record Date, and
such interest (or Liquidated Damages, if applicable) will not be payable to
Holders who tender Securities pursuant to such Asset Sale Offer.
42
SECTION 4.15. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Guarantors covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or any Guarantor from paying all or any portion of the principal of,
premium of, or interest (or Liquidated Damages, if any) on the Securities as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.16. LIMITATION ON LIENS SECURING INDEBTEDNESS.
The Company and the Guarantors shall not, and shall not permit any of
their Subsidiaries to, create, incur, assume or suffer to exist any Lien of any
kind, other than Permitted Liens, upon any of their respective assets now owned
or acquired on or after the date of this Indenture or upon any income or profits
therefrom securing any Indebtedness of the Company or any Guarantor other than
Senior Indebtedness, unless the Company provides, and causes its Subsidiaries to
provide, concurrently therewith, that the Securities are equally and ratably so
secured, PROVIDED that, if such Indebtedness is Subordinated Indebtedness, the
Lien securing such Subordinated Indebtedness shall be subordinate and junior to
the Lien securing the Securities with the same relative priority as such
Subordinated Indebtedness shall have with respect to the Securities, and
PROVIDED, FURTHER, that this clause shall not be applicable to any Liens
securing any such Indebtedness which became Indebtedness of the Company pursuant
to a transaction subject to the provisions of this Indenture described below
under Section 5.1 or which constitutes Acquired Indebtedness and which in either
case were in existence at the time of such transaction (unless such Indebtedness
was incurred or such Lien created in connection with or in contemplation of,
such transaction), so long as such Liens do not extend to or cover any property
or assets of the Company or any Subsidiary of the Company other than property or
assets acquired in such transaction.
SECTION 4.17. RULE 144A INFORMATION REQUIREMENT.
The Company shall furnish to the Holders of the Securities, securities
analysts, and prospective purchasers of Securities designated by the Holders of
Transfer Restricted Securities, upon their request, the information required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act until such
time as either the Company has concluded an offer to exchange the Exchange
Securities for the Initial Securities or a registration statement relating to
resales of the Securities has become effective under the Securities Act. The
Company shall also furnish such information during the pendency of any
suspension of effectiveness of such resale registration statement.
SECTION 4.18. LIMITATIONS ON LINES OF BUSINESS.
Neither the Company nor any of its Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than that which, in the reasonable good faith judgment of the
Board of Directors of the Company, is a Related Business.
43
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.1. LIMITATION ON MERGER, SALE OR CONSOLIDATION.
The Company shall not consolidate with or merge with or into another
person or, directly or indirectly, sell, lease, convey or transfer all or
substantially all of its assets (computed on a consolidated basis), whether in a
single transaction or a series of related transactions, to another Person or
group of affiliated Persons unless (i) either (a) the Company is the continuing
entity or (b) the resulting, surviving or transferee entity is a corporation
organized under the laws of the United States, any state thereof or the District
of Columbia and expressly assumes by supplemental indenture all of the
obligations of the Company in connection with the Securities and this Indenture;
(ii) no Default or Event of Default shall exist or shall occur immediately after
giving effect on a PRO FORMA basis to such transaction; and (iii) unless such
transaction is solely the merger of the Company and one of its previously
existing Wholly-owned Subsidiaries which is also a Guarantor and which
transaction is not in connection with any other transaction immediately after
giving effect to such transaction on a PRO FORMA basis, the consolidated
resulting, surviving or transferee entity would immediately thereafter be
permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Debt Incurrence Ratio set forth in Section 4.11 .
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
the successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
corporation had been named therein as the Company, and (except in the case of a
lease) the Company shall be released from the obligations under the Securities
and this Indenture except with respect to any obligations that arise from, or
are related to, such transaction.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
SECTION 5.2. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company in accordance with Section 5.1
hereof, the successor corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made, or, in the case of a plan
of liquidation, the entity which receives the greatest value from such plan of
liquidation shall succeed to, and (except in the case of a lease) be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor corporation had been named herein as
the Company, and (except in the case of a lease) when a successor corporation
duly assumes all of the obligations of the Company pursuant hereto and pursuant
to the Securities, the Company shall be released from such obligations (except
with respect to any obligations that arise from, or are related to, such
transaction).
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be caused voluntarily or involuntarily or effected, without limitation, by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) failure by the Company to pay any installment of
interest (or Liquidated Damages, if any) upon the Securities
as and when the same becomes due and payable, and the
continuance of any such failure for a period of 30 days;
(ii) failure by the Company to pay all or any part of
the principal or premium, if any, on the Securities when and
as the same becomes due and payable at maturity, upon
redemption, by acceleration, or otherwise, including, without
limitation, payment of the Change of Control Purchase Price or
the Asset Sale Offer Price, or otherwise;
(iii) failure by the Company or any Subsidiary to
observe or perform any other covenant or agreement contained
in the Securities or this Indenture and, subject to certain
exceptions and the continuance of such failure for a period of
30 days after written notice is given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Securities
outstanding;
(iv) a decree, judgment, or order by a court of
competent jurisdiction shall have been entered adjudicating
the Company or any of its Significant Subsidiaries as bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization of the Company or any of its
Significant Subsidiaries under any bankruptcy or similar law,
and such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or a decree, judgment or
order of a court of competent jurisdiction appointing a
receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency for the Company, any of its Significant
Subsidiaries, or any substantial part of the property of any
such Person, or for the winding up or liquidation of the
affairs of any such Person, shall have been entered, and such
decree, judgment, or order shall have remained in force
undischarged and unstayed for a period of 60 days;
(v) the Company or any of its Significant
Subsidiaries shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization under any bankruptcy
or similar law or similar statute, or shall consent to the
filing of any such petition, or shall consent to the
appointment of a Custodian, receiver, liquidator, trustee, or
assignee in bankruptcy or insolvency of it or any substantial
part of its assets or property, or shall make a general
assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they
become due, fail generally to pay its debts as they become
due, or take any corporate action in furtherance of any of the
foregoing;
(vi) the failure to pay at final stated maturity
(giving effect to any applicable grace periods) the principal
amount of any Indebtedness of the Company or any Subsidiary of
the Company or the acceleration of the final stated maturity
of any Indebtedness if the
45
aggregate principal amount of such Indebtedness, together with
the principal amount of any such Indebtedness in default for
failure to pay principal at final maturity or which has been
accelerated, aggregates $5,000,000 or more at any time; and
(vii) final unsatisfied judgments not covered by
insurance for the payment of money, or the issuance of any
warrant of attachment against any portion of the property or
assets of the Company or any of its Subsidiaries, aggregating
in excess of $5,000,000, at any one time shall be rendered
against the Company or any of its Subsidiaries and not be
stayed, bonded or discharged for a period (during which
execution shall not be effectively stayed) of 60 days.
SECTION 6.2. ACCELERATION OF MATURITY DATE; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing (other than an Event of
Default specified in Section 6.1(iv) or Section 6.1(v) above relating to the
Company or any Significant Subsidiary), then, and in every such case, unless the
principal of all of the Securities shall have already become due and payable,
either the Trustee or the Holders of 25% in aggregate principal amount of then
outstanding Securities, by notice in writing to the Company (and to the Trustee
if given by Holders) (an "Acceleration Notice"), may declare all principal,
determined as set forth below, and accrued interest (and Liquidated Damages, if
any) thereon to be due and payable immediately; PROVIDED, however, that if any
Senior Debt is outstanding pursuant to the Credit Agreement, upon a declaration
of such acceleration, such principal and interest shall be due and payable upon
the earlier of (x) the third Business Day after the sending to the Company and
the representative of such written notice, unless such Event of Default is cured
or waived prior to such date and (y) the date of acceleration of any Senior Debt
under the Credit Agreement. If an Event of Default specified in clause (iv) or
(v), above, relating to the Company or any of its Significant Subsidiaries
occurs, all principal and accrued interest (and Liquidated Damages, if any)
thereon will be immediately due and payable on all outstanding Securities
without any declaration or other act on the part of Trustee or the Holders.
At any time after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of not less
than a majority in aggregate principal amount of then outstanding Securities, by
written notice to the Company and the Trustee, may rescind, on behalf of all
Holders, any such declaration of acceleration if:
(1) the Company has paid or deposited with the Trustee cash
sufficient to pay:
(A) all overdue interest and Liquidated
Damages, if any, on all Securities,
(B) the principal of (and premium, if any,
applicable to) any Securities which would become due
other than by reason of such declaration of
acceleration, and interest thereon at the rate borne
by the Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest at
the rate borne by the Securities,
(D) all sums paid or advanced by the Trustee
hereunder and the compensation, expenses,
disbursements and advances of the Trustee and its
agents and counsel, and all other amounts due the
Trustee under Section 7.7 and
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(2) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 6.12.
Notwithstanding the previous sentence of this Section 6.2, no waiver shall be
effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to (i) any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Security affected thereby, unless all such
affected Holders agree, in writing, to waive such Event of Default or other
event and (ii) any provision requiring supermajority approval to amend, unless
such default has been waived by such a supermajority. No such waiver shall cure
or waive any subsequent default or impair any right consequent thereon.
SECTION 6.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if an Event of Default in payment of
principal, premium or interest (or Liquidated Damages, if any) specified in
clause (i) or (ii) of Section 6.1 hereof occurs and is continuing, the Company
shall, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such Securities for
principal, premium (if any), and interest (and Liquidated Damages, if any), and,
to the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal (and premium, if any), and on any overdue
interest (and Liquidated Damages, if any), at the rate borne by the Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including compensation to, and expenses,
disbursements and advances of the Trustee and its agents and counsel and all
other amounts due the Trustee under Section 7.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust in favor of the
Holders, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company or any other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 6.4. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any (and
Liquidated Damages, if any), or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise to take any and all actions under
the TIA, including
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (and Liquidated Damages,
if any) owing and unpaid in respect of the Securities and
47
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agent and counsel and all other amounts due the Trustee
under Section 7.7) and of the Holders allowed in such judicial
proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel, and any
other amounts due the Trustee under Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; PROVIDED, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of a creditors'
committee.
SECTION 6.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust in favor of the Holders, and any recovery of
judgment shall, after provision for the payment of compensation to, and
expenses, disbursements and advances of the Trustee and its agents and counsel
and all other amounts due the Trustee under Section 7.7, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has
been recovered.
SECTION 6.6. PRIORITIES.
Any money collected by the Trustee pursuant to this Article VI shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium (if
any), or interest (or Liquidated Damages, if any), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to Section
7.7 hereof;
SECOND: To the Holders in payment of the amounts then due and unpaid
for principal of, premium (if any), and interest (and Liquidated Damages, if
any) on, the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal,
premium (if any), and interest (and Liquidated Damages, if any), respectively;
and
THIRD: To the Company, the Guarantors or such other Person as may be
lawfully entitled thereto, the remainder, if any, each as their respective
interests may appear.
48
The Trustee may, but shall not be obligated to, fix a record date and
payment date for any payment to the Holders under this Section 6.6.
SECTION 6.7. LIMITATION ON SUITS.
No Holder of any Security shall have any right to order or direct the
Trustee to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(A) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(B) the Holders of not less than 25% in aggregate principal
amount of then outstanding Securities shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(C) such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
(D) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(E) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 6.8. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST.
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any), and interest (and
Liquidated Damages, if any) on, such Security on the Maturity Dates of such
payments as expressed in such Security (in the case of redemption, the
Redemption Price on the applicable Redemption Date, in the case of a Change of
Control, the Change of Control Purchase Price on the Change of Control Purchase
Date, and in the case of an Asset Sale, the Asset Sale Offer Price on the
relevant purchase date) and to institute suit for the enforcement of any such
payment after such respective dates, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.9. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in Section 2.7 hereof, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or
49
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.10. DELAY OR OMISSION NOT WAIVER.
No delay or omission by the Trustee or by any Holder of any Security to
exercise any right or remedy arising upon any Event of Default shall impair the
exercise of any such right or remedy or constitute a waiver of any such Event of
Default. Every right and remedy given by this Article VI or by law to the
Trustee or to the Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 6.11. CONTROL BY HOLDERS.
The Holder or Holders of a majority in aggregate principal amount of
then outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred upon the Trustee, PROVIDED, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee shall not determine and shall have no duty to
ascertain that the action so directed would involve it in personal
liability or would be unjustly prejudicial to the Holders not taking
part in such direction, and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 6.12. WAIVER OF EXISTING OR PAST DEFAULT.
Subject to Section 6.8, the Holder or Holders of not less than a
majority in aggregate principal amount of the outstanding Securities may, on
behalf of all Holders, waive any existing or past Default or Event of Default
hereunder and its consequences under this Indenture, except a default
(A) in the payment of the principal of, premium, if any, or
interest (or Liquidated Damages, if any) on, any Security as specified
in clauses (i) and (ii) of Section 6.1 hereof and not yet cured, or
(B) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the
Holder of each outstanding Security affected.
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 the exercise of any right arising therefrom.
SECTION 6.13. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted to be taken by it as
Trustee, any court may in its discretion require the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and
50
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 6.13 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the outstanding
Securities, or to any suit instituted by any Holder for enforcement of the
payment of principal of, or premium (if any), or interest (or Liquidated
Damages, if any) on, any Security on or after the respective Maturity Date
expressed in such Security (including, in the case of redemption, on or after
the Redemption Date).
SECTION 6.14. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Guarantors, the Trustee and
the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this Indenture
and covenants and agrees to perform the same, as herein expressed, subject to
the terms hereof.
SECTION 7.1. DUTIES OF TRUSTEE.
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use under
the circumstances in the conduct of his or her own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to 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.
However, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1,
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(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts, and
(3) The Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.11 hereof.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take
or omit to take any action under this Indenture or at the request,
order or direction of the Holders or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c), (d) and (f) of
this Section 7.1.
(f) The Trustee shall not be liable for interest on any assets
received by it except as the Trustee may agree in writing with the
Company (including without limitation to the extent the Trustee
receives funds prior to the interest payment date in order to comply
with the provisions of Section 4.1). Assets held in trust by the
Trustee need not be segregated from other assets except to the extent
required by law.
SECTION 7.2. RIGHTS OF TRUSTEE.
Subject to Section 7.1 hereof:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting on 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 such document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an
Opinion of Counsel, which shall conform to Sections 13.4 and 13.5
hereof. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such certificate or advice
of counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it or its
agent takes or omits to take in good faith which it believes to be
authorized or within its rights or powers conferred upon it by this
Indenture.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, notice, request, direction, consent,
order, bond, debenture or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company
personally or by its agent or attorney.
52
(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,
order or direction of any of the Holders, pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.
(g) Unless otherwise specifically provided for in this
Indenture, any demand, request, direction or notice from the Company or
any Guarantor shall be sufficient if signed by an Officer of the
Company or such Guarantor, as applicable.
(h) The Trustee shall have no duty to inquire as to the
performance of the Company's or any Guarantor's covenants in Article IV
hereof or as to the performance by any Agent of its duties hereunder.
In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(i), 6.1(ii) and 4.1 hereof, or (ii) any
Default or Event of Default of which the Trustee shall have received
written notification or obtained actual knowledge.
(i) Whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate.
SECTION 7.3. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, any
Guarantor, any of their Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11
hereof.
SECTION 7.4. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities or any money paid to the
Company or upon the Company's discretion under any provision of this Indenture,
and it shall not be responsible for any statement or recital herein or any
statement in the Securities, other than the Trustee's certificate of
authentication, or the use or application of any funds received by a Paying
Agent other than the Trustee.
SECTION 7.5. NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the uncured Default or Event of Default within 90 days after such Default or
Event of Default occurs. Except in the case of a Default or an Event of Default
in payment of principal (or premium, if any), of, or interest (or Liquidated
Damages, if any) on, any Security (including the payment of the Change of
Control Purchase Price on the Change of Control Payment Date, the payment of the
Redemption Price on the Redemption Date and the payment of the Asset Sale Offer
Price on the relevant purchase date), the Trustee may withhold the notice if and
so long as a Trust Officer in good faith determines that withholding the notice
is in the interest of the Securityholders.
53
SECTION 7.6. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each April 15 beginning with the April 15
following the date of this Indenture, the Trustee shall, if required by law,
mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed.
SECTION 7.7. COMPENSATION AND INDEMNITY.
The Company and the Guarantors jointly and severally agree to pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company and the Guarantors shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it in accordance with this Indenture. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents, accountants, experts and counsel.
The Company and the Guarantors jointly and severally agree to indemnify
the Trustee (in its capacity as Trustee) and each of its officers, directors,
attorneys-in-fact and agents for, and hold it harmless against, any claim,
demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss or
liability incurred by it without negligence or bad faith on the part of the
Trustee, arising out of or in connection with the administration of this trust
and its rights or duties hereunder, including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company and the Guarantors shall defend the
claim and the Trustee shall provide reasonable cooperation at the Company's and
the Guarantors' expense in the defense. The Trustee may have separate counsel
and the Company and the Guarantors shall pay the reasonable fees and expenses of
such counsel; PROVIDED, that the Company and the Guarantors will not be required
to pay such fees and expenses if they assume the Trustee's defense and there is
no conflict of interest between the Company and the Guarantors and the Trustee
in connection with such defense. The Company and the Guarantors need not pay for
any settlement made without their written consent; PROVIDED, that such consent
shall not be unreasonably withheld. The Company and the Guarantors need not
reimburse any expense or indemnify against any loss or liability to the extent
incurred by the Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's and the Guarantors' payment obligations in this
Section 7.7, the Trustee shall have a lien prior to the Securities on all assets
held or collected by the Trustee, in its capacity as Trustee, except assets held
in trust to pay principal and premium, if any, of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(iv) or (v) of this Indenture occurs, the
expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
The Company's and the Guarantors' obligations under this Section 7.7
and any lien arising hereunder shall survive the resignation or removal of the
Trustee, the discharge of the Company's and the
54
Guarantors' obligations pursuant to Article VIII of this Indenture and any
rejection or termination of this Indenture under any Bankruptcy Law.
SECTION 7.8. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company in writing. The
Holder or Holders of a majority in aggregate principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the Trustee in
writing and may appoint a successor trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver, Custodian or other 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 Holder or
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the retiring Trustee provided for in Section
7.7 hereof have been paid, the retiring Trustee shall transfer all property held
by it as trustee to the successor Trustee, subject to the lien provided in
Section 7.7 hereof, 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. A successor Trustee shall mail
notice of its succession to each Holder.
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
Holder or Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Company's and the Guarantors' obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1), (2) and (5). The Trustee shall have a combined capital
and surplus of at least $25,000,000 as set forth in its most recent published
annual report of condition. The Trustee shall comply with TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1. DISCHARGE; OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
This Indenture shall cease to be of further effect (except that the
Company's and the Guarantors' obligations under Section 7.7 and the Trustee's
and the Paying Agent's obligations under Sections 8.6 and 8.7 shall survive)
when all outstanding Securities theretofore authenticated and issued have been
delivered (other than destroyed, lost or stolen Securities that have been
replaced or paid) to the Trustee for cancellation and the Company or the
Guarantors have paid all sums payable hereunder. In addition, the Company may
elect to have Section 8.2, at the Company's option and at any time within one
year of the Maturity Date of the Securities, or Section 8.3, at the Company's
option at any time, of this Indenture applied to all outstanding Securities upon
compliance with the conditions set forth below in this Article VIII.
SECTION 8.2. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and the Guarantors shall be deemed
to have been discharged from their respective obligations with respect to all
outstanding Securities on the date the conditions set forth below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented and this Indenture shall cease to be of further effect
as to all outstanding Securities and Guarantees, except as to be deemed to be
"outstanding" only for the purposes of Section 8.5 hereof and the other Sections
of this Indenture referred to in (a) and (b) below, and the Company and the
Guarantors shall be deemed to have satisfied all other of their respective
obligations under such Securities 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
outstanding Securities to receive payments in respect of the principal of,
premium, if any, and interest (and Liquidated Damages, if any) on such
Securities when such payments are due from the trust described in Section 8.5,
(b) the Company's obligations with respect to such Securities under Sections
2.4, 2.6, 2.7, 2.10, 4.2, 8.5, 8.6 and 8.7 hereof and (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's and the
Guarantors' obligations in connection therewith. Subject to compliance with this
Article VIII, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 hereof with
respect to the Securities.
56
SECTION 8.3. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company and the Guarantors shall be released
from their respective obligations under the covenants contained in Sections 4.3,
4.6, 4.7, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.16, 4.17 and 4.18, Article V and
Article X hereof with respect to the outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder.
For this purpose, such Covenant Defeasance means that, with respect to the
outstanding Securities, neither the Company nor any Guarantor need comply with
and shall have any 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, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, Sections
6.1(iii) through 6.1(vii) hereof shall not constitute Events of Default with
respect to the Securities.
SECTION 8.4. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
(a) The following shall be the conditions to the application
of either Section 8.2 or 8.3 hereof to the outstanding Securities:
(i) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 7.10 hereof who shall
agree to comply with the provisions of this Article VIII
applicable to it), in trust, for the benefit of the Holders of
the Securities, cash, U.S. Government Obligations, 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 (and Liquidated Damages, if any) on such
outstanding Securities on the stated date for payment thereof
or on the redemption date of such principal or installment of
principal of, premium, if any, or interest on such Securities,
and the holders of Securities must have a valid, perfected,
exclusive security interest in such trust,
(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 (1) the Company has received from, or there
has been published by, the Internal Revenue Service a ruling
or (2) since the date of this Indenture, there has been a
change in the applicable Federal income tax law, in either
case to the effect that, and based thereon such opinion of
counsel shall confirm that, the Holders of such outstanding
Securities will not recognize income, gain or loss for Federal
income tax purposes as a result of such Legal Defeasance and
will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the
case if such 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 such Trustee
confirming that the Holders of such outstanding Securities
will not recognize income, gain or loss for Federal income tax
purposes as a result of such Covenant Defeasance and will be
subject to Federal income tax on the same amounts, in the same
57
manner and at the same times as would have been the case if
such Covenant Defeasance had not occurred;
(iv) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or in
the case of Legal Defeasance insofar as Events of Default from
bankruptcy or insolvency events are concerned, at any time in
the period ending on the 91st day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance will
not result in a breach or violation of, or constitute a
default under any material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee
an Officers' Certificate stating that the deposit was not made
by the Company with the intent of preferring the Holders of
such Securities over the other creditors of the Company with
the intent of defeating, hindering, delaying or defrauding
other creditors of the Company; and
(vii) the Company shall have delivered to the Trustee
an Officers' Certificate and an opinion of counsel, each
stating that the conditions precedent provided for in, in the
case of the Officers' Certificate, (i) through (vi) and, in
the case of the opinion of counsel, clauses (i), (with respect
to the validity and perfection of the security interest) (ii),
(iii) and (v) of this paragraph, have been complied with and
in the case of a Covenant Defeasance the Company shall have
delivered to the Trustee an Officers' Certificate, subject to
such qualifications and exceptions as the Trustee deems
appropriate, to the effect that, assuming no intervening
bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the
Securities is an insider of the Company, after the 91st day of
deposit the trust funds will not be subject to the effect of
any applicable Federal bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally.
(b) If the funds deposited with the Trustee to effect Covenant
Defeasance are insufficient to pay the principal of, premium, if any,
and interest (and Liquidated Damages, if any) on the Securities when
due, then the obligations of the Company and the Guarantors under this
Indenture, the Securities and the Guarantees will be revived and no
such defeasance will be deemed to have occurred.
SECTION 8.5. DEPOSITED CASH AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 hereof, all cash and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.5, the "Paying Agent")
pursuant to Section 8.4 hereof in respect of the outstanding Securities shall be
held in trust and applied by the Paying Agent, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any other Paying Agent as the Trustee may determine, to the Holders of
such Securities of all sums due and to become due thereon in respect of
principal, premium, if any, and interest (and Liquidated Damages, if any), but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.4 or the principal
58
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 outstanding Securities.
SECTION 8.6. REPAYMENT TO THE COMPANY.
(a) Anything in this Article VIII to the contrary
notwithstanding, the Trustee or the Paying Agent shall deliver or pay
to the Company from time to time upon the request of the Company any
cash or U.S. Government Obligations held by it as provided in Section
8.4 hereof 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 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
(b) Any cash and U.S. Government Obligations (including the
proceeds thereof) 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 (and Liquidated Damages, if any) on any
Security and remaining unclaimed for two years after such principal,
and premium, if any, or interest has become due and payable shall be
paid to the Company on its request; and the Holder of such Security
shall thereafter look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such
trust money shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the
NEW YORK TIMES and THE WALL STREET JOURNAL (national edition), notice
that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 8.7. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any cash or U.S.
Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case
may be, of this Indenture 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 the Guarantors' obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply such money in accordance with
Sections 8.2 and 8.3 hereof, as the case may be; PROVIDED, HOWEVER, that, if the
Company makes any payment of principal of, premium, if any, or interest (and
Liquidated Damages, if any) on any Security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the cash or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company or any Guarantor, when
authorized by Board Resolutions, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
59
(1) to cure any ambiguity, defect, or inconsistency, or make
any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of
this Indenture, PROVIDED such action pursuant to this clause (1) shall
not adversely affect the interests of any Holder in any respect;
(2) to add to the covenants of the Company or the Guarantors
for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or the Guarantors or make any other
change that does not adversely affect the rights of any Holder;
(3) to provide for collateral for or additional Guarantors of
the Securities;
(4) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the obligations of
the Company, herein and in the Securities in accordance with Article V;
(5) to comply with the TIA;
(6) to evidence the succession of another corporation to any
Guarantor and assumption by any such successor of the Guarantee of such
Guarantor (as set forth in Section 11.4) in accordance with Article XI;
(7) to evidence the release of any Guarantor in accordance
with Article V;
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities;
(9) in any other case where a supplemental indenture is
required or permitted to be entered into pursuant to the provisions of
this Indenture without the consent of any Holder; or
(10) to provide for the issuance and authorization of the
Exchange Securities.
(11) to effect any changes to Section 2.6 in a manner
necessary to comply with procedures of the Securities Custodian or the
Depository, PROVIDED such action pursuant to this clause (11) shall not
adversely affect the interests of any Holder in any respect.
SECTION 9.2. AMENDMENTS, SUPPLEMENTAL INDENTURES AND WAIVERS WITH
CONSENT OF HOLDERS.
Subject to Section 6.8 hereof, with the consent of the Holders of a
majority in principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange offer for
such Securities), by written act of said Holders delivered to the Company and
the Trustee, the Company, and as applicable, any Guarantor, when authorized
by Board Resolutions, and the Trustee may amend or supplement this Indenture
or the Securities or enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or the Securities or
of modifying in any manner the rights of the Holders under this Indenture or
the Securities; PROVIDED that no such modification may, without the consent
of holders of at least 66 2/3% in aggregate principal amount of Securities at
the time outstanding, modify the provisions (including the defined terms
therein) of Article X in a manner adverse to the holders. Subject to Section
6.8, the Holder or Holders of not less than a majority in aggregate principal
amount of then outstanding Securities may waive compliance by the Company or
any Guarantor with any provision of this Indenture or the Securities.
Notwithstanding any of the above, however, no such amendment,
60
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Security affected thereby:
(1) change the Maturity Date on any Security, or reduce the
principal amount thereof or the rate (or extend the time for payment)
of interest thereon or any premium payable upon the redemption thereof,
or change the place of payment where, or the coin or currency in which,
any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the Maturity Date thereof (or in the case of
redemption, on or after the Redemption Date), or reduce the Change of
Control Purchase Price or the Asset Sale Offer Price (although the
provisions relating to the Change of Control or Asset Sale may
otherwise be amended or deleted in accordance with the provisions of
this Indenture) or alter the provisions (including the defined terms
used herein) of Article III of this Indenture or Paragraph 5 of the
Securities, regarding the right of the Company to redeem the
Securities, in a manner adverse to the Holders; or
(2) reduce the percentage in principal amount of the
outstanding Securities, the consent of whose Holders is required for
any such amendment, supplemental indenture or wavier provided for in
this Indenture; or
(3) modify any of the waiver provisions, except to increase
any required percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders 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 supplemental indenture or waiver.
After an amendment, supplement or waiver under this Section 9.2 or
under Section 9.4 hereof becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
SECTION 9.3. COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION 9.4. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of his Security by written notice to the
Company or the Person designated by the
61
Company as the Person to whom consents should be sent if such revocation is
received by the Company or such Person before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Securities have consented (and not theretofore revoked such
consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a record date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(1) through (3) of Section 9.2 hereof, in which case, the amendment, supplement
or waiver shall bind only each Holder of a Security who has consented to it and
every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder's Security; PROVIDED, that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal and premium of and interest (and Liquidated Damages, if any) on a
Security, on or after the respective dates set for such amounts to become due
and payable expressed in such Security, or to bring suit for the enforcement of
any such payment on or after such respective dates.
SECTION 9.5. NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee
or require the Holder to put an appropriate notation on the Security. The
Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms. Any
failure to make the appropriate notation or to issue a new Security shall not
affect the validity of such amendment, supplement or waiver.
SECTION 9.6. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article IX; PROVIDED, that the Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article IX is
authorized or permitted by this Indenture.
ARTICLE X
RIGHT TO REQUIRE REPURCHASE
SECTION 10.1. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON A
CHANGE OF CONTROL.
(a) In the event that a Change of Control has occurred, each
holder of Securities will have the right, at such holder's option,
pursuant to an offer (subject only to conditions required by applicable
law, if any) by the Company (the "Change of Control Offer"), to require
the Company to repurchase all or any part of such holder's Securities
(PROVIDED, that the principal amount of such Securities must be $1,000
or an integral multiple thereof) on a date (the "Change of Control
Purchase Date") that is no later than 35 Business Days after the
occurrence of such Change of
62
Control, at a cash price equal to 101% of the principal amount thereof
(the "Change of Control Purchase Price"), together with accrued and
unpaid interest and Liquidated Damages, if any, to the Change of
Control Purchase Date.
Notwithstanding anything in this Article X to the contrary,
prior to the commencement of a Change of Control Offer, but in any
event within 30 days following any Change of Control, the Company shall
(i)(a) repay in full and terminate all commitments under Indebtedness
under the Credit Agreement and all other Senior Debt the terms of which
require repayment upon a Change of Control or (b) offer to repay in
full and terminate all commitments under all Indebtedness under the
Credit Agreement and all such other Senior Debt and repay the
Indebtedness owed to each lender which has accepted such offer in full
or (ii) obtain the requisite consents under the Credit Agreement and
all such other Senior Debt to permit the repurchase of the Securities
as provided herein. The Company's failure to comply with the preceding
sentence shall constitute an Event of Default described in Section
6.1(iv) and not in Section 6.1(ii).
(b) In the event that, pursuant to this Section 10.1, the
Company shall be required to commence a Change of Control Offer, the
Company shall follow the procedures set forth in this Section 10.1 as
follows:
(i) the Change of Control Offer shall commence
within 10 Business Days following the occurrence of a Change
of Control;
(ii) the Change of Control Offer shall remain open
for 20 Business Days following its commencement (the "Change
of Control Offer Period");
(iii) upon the expiration of the Change of Control
Offer Period, the Company promptly shall purchase all of the
tendered Securities at the Change of Control Purchase Price;
(iv) if the Change of Control is on or after an
interest payment record date and on or before the associated
Interest Payment Date, any accrued and unpaid interest (and
Liquidated Damages, if any) due on such Interest Payment Date
will be paid to the Person in whose name a Security is
registered at the close of business on such Record Date, and
such interest (and Liquidated Damages, if applicable) will not
be payable to Securityholders who tender Securities pursuant
to the Change of Control Offer;
(v) the Company shall provide the Trustee and the
Paying Agent with written notice of the Change of Control
Offer at least three Business Days before the commencement of
any Change of Control Offer; and
(vi) on or before the commencement of any Change of
Control Offer, the Company or the Trustee (upon the request
and at the expense of the Company) shall send, by first-class
mail, a notice to each of the Securityholders, which (to the
extent consistent with this Indenture) shall govern the terms
of the Change of Control Offer and shall state:
(A) that the Change of Control Offer is
being made pursuant to this Section 10.1 and that all
Securities, or portions thereof, tendered will be
accepted for payment;
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(B) the Change of Control Purchase Price
(including the amount of accrued but unpaid interest
(and Liquidated Damages, if any)) and the Change of
Control Purchase Date;
(C) that any Security, or portion thereof,
not tendered or accepted for payment will continue to
accrue interest;
(D) that, unless the Company defaults in
depositing cash with the Paying Agent in accordance
with the last paragraph of this Section 10.1, or such
payment is prevented for any reason, any Security, or
portion thereof, accepted for payment pursuant to the
Change of Control Offer shall cease to accrue
interest after the Change of Control Purchase Date;
(E) that Holders electing to have a
Security, or portion thereof, purchased pursuant to a
Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent (which may
not for purposes of this Section 10.1,
notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the
Company) at the address specified in the notice prior
to the expiration of the Change of Control Offer;
(F) that Holders will be entitled to
withdraw their election, in whole or in part, if the
Paying Agent receives, prior to the expiration of the
Change of Control Offer, a facsimile transmission or
letter setting forth the name of the Holder, the
principal amount of the Securities the Holder is
withdrawing and a statement containing a facsimile
signature and stating that such Holder is withdrawing
his election to have such principal amount of
Securities purchased;
(G) that Holders whose Securities are
purchased only in part will be issued new Securities
equal in principal amount to the unpurchased portion
of the Securities surrendered; and
(H) a brief description of the events
resulting in such Change of Control.
Any Change of Control Offer shall be made in compliance with
all applicable laws, rules and regulations, including, if applicable,
Regulation 14E under the Exchange Act and the rules thereunder and all
other applicable Federal and state securities laws. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Indenture relating to a Change of Control,
compliance by the Company or any of the Guarantors with such laws and
regulations shall not in and of itself cause a breach of its
obligations under this Indenture.
On or before the Change of Control Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent cash sufficient to pay the Change of Control Purchase
Price (together with accrued and unpaid interest and Liquidated
Damages, if any) of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate
listing the Securities or portions thereof being purchased by the
Company. The Paying Agent promptly will pay the Holders of Securities
so accepted an amount equal to the Change of Control Purchase Price
(together with accrued and unpaid interest and Liquidated Damages, if
any), and the Trustee promptly will authenticate and deliver to such
Holders a new Security equal in
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principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted will be delivered promptly
by the Company to the Holder thereof. The Company publicly will
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Purchase Date.
ARTICLE XI
GUARANTEE
SECTION 11.1. GUARANTEE.
(a) If any Person becomes a Subsidiary of the Company, whether
pursuant to the acquisition by the Company or any Guarantor of Equity
Interests of such Person, or otherwise, such Subsidiary (in each case,
a "Guarantor") shall, to the fullest extent permitted by applicable
law, irrevocably and unconditionally guarantee (the "Guarantee") to
each Holder of a Security authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the
validity and enforceability against the Company and any other
Guarantors of this Indenture, the Securities or the obligations of the
Company under this Indenture or the Securities, that: (x) the principal
of and premium (if any), and interest (and Liquidated Damages, if any)
on the Securities will be paid in full when due, whether at the
Maturity Date or Interest Payment Date, by acceleration, call for
redemption, upon a Change of Control, an Asset Sale Offer or otherwise;
(y) all other obligations of the Company to the Holders or the Trustee
under this Indenture or the Securities will be promptly paid in full or
performed, all in accordance with the terms of this Indenture and the
Securities; and (z) in case of any extension of time of payment or
renewal of any Securities or any of such other obligations, they will
be paid in full when due or performed in accordance with the terms of
the extension or renewal, whether at maturity, by acceleration, call
for redemption, upon a Change of Control, an Asset Sale Offer or
otherwise. Failing payment when due of any amount so guaranteed for
whatever reason, each Guarantor shall be obligated to pay the same
before failure so to pay becomes an Event of Default.
If the Company or a Guarantor defaults in the payment of the
principal of, premium, if any, or interest (or Liquidated Damages, if
any) on, the Securities when and as the same shall become due, whether
upon maturity, acceleration, call for redemption, upon a Change of
Control Offer, upon an Asset Sale Offer or otherwise, without the
necessity of action by the Trustee or any Holder, each Guarantor shall
be required, jointly and severally, to promptly make such payment in
full.
Each Guarantor shall, within five Business Days after becoming
a Subsidiary of the Company, execute and deliver to the Trustee a
supplemental indenture, which shall be in a form satisfactory to the
Trustee, making such Guarantor a party to this Indenture.
(b) Each Guarantor hereby agrees to the fullest extent
permitted by applicable law, that its obligations with regard to this
Guarantee shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the
absence of any action to enforce the same, any delays in obtaining or
realizing upon or failures to obtain or realize upon collateral, the
recovery of any judgment against the Company, any action to enforce the
same or any other circumstances that might otherwise constitute a legal
or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives to the fullest extent permitted by applicable law 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 or right to require the prior
disposition of the assets of the Company to meet its obligations,
protest,
65
notice and all demands whatsoever and covenants that this Guarantee
will not be discharged except by complete performance of the
obligations contained in the Securities and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor, or any
Custodian or similar official acting in relation to either the Company
or such Guarantor, any amount paid by either the Company or such
Guarantor to the Trustee or such Holder, this Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed
hereby. Each Guarantor further agrees that, as between such Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 6.2 hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company of the obligations
guaranteed hereby, and (ii) in the event of any declaration of
acceleration of those obligations as provided in Section 6.2 hereof,
those obligations (whether or not due and payable) will forthwith
become due and payable by each of the Guarantors for the purpose of
this Guarantee.
(d) It is the intention of each Guarantor and the Company that
the obligations of each Guarantor hereunder shall be in, but not in
excess of, the maximum amount permitted by applicable law. Accordingly,
if the obligations in respect of the Guarantee would be annulled,
avoided or subordinated to the creditors of any Guarantor by a court of
competent jurisdiction in a proceeding actually pending before such
court as a result of a determination both that such Guarantee was made
by such Guarantor without fair consideration and, immediately after
giving effect thereto, such Guarantor was insolvent or unable to pay
its debts as they mature or left with an unreasonably small capital,
then the obligations of such Guarantor under such Guarantee shall be
reduced by such court if and to the extent such reduction would result
in the avoidance of such annulment, avoidance or subordination;
PROVIDED, HOWEVER, that any reduction pursuant to this paragraph shall
be made in the smallest amount as is strictly necessary to reach such
result. For purposes of this paragraph, "fair consideration,"
"insolvency," "unable to pay its debts as they mature," "unreasonably
small capital" and the effective times of reductions, if any, required
by this paragraph shall be determined in accordance with applicable
law.
SECTION 11.2. EXECUTION AND DELIVERY OF GUARANTEE.
Each Guarantor shall, by virtue of such Guarantor's execution and
delivery of an indenture supplement pursuant to Section 11.1 hereof, be deemed
to have signed on each Security issued hereunder the notation of guarantee set
forth on the form of the Securities attached hereto as Exhibit A to the same
extent as if the signature of such Guarantor appeared on such Security.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the guarantee set forth in
Section 11.1 on behalf of each Guarantor. The notation of a guarantee set forth
on any Security shall be null and void and of no further effect with respect to
the guarantee of any Guarantor which, pursuant to Section 11.4, is released from
such Guarantee.
SECTION 11.3. CERTAIN BANKRUPTCY EVENTS.
Each Guarantor hereby covenants and agrees, to the fullest extent that
it may do so under applicable law, that in the event of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company, such
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the
66
Guarantee and hereby waives and agrees not to take the benefit of any such stay
of execution, whether under Section 362 or 105 of the United States Bankruptcy
Code or otherwise.
SECTION 11.4. LIMITATION ON MERGER OF SUBSIDIARIES AND RELEASE OF
GUARANTORS.
No Guarantor shall consolidate or merge with or into (whether or not
such Guarantor is the surviving person) another person unless (i) subject to the
provisions of the following paragraph and certain other provisions of this
Indenture, the person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of such Guarantor
pursuant to a supplemental indenture in form reasonably satisfactory to the
Trustee, pursuant to which such person shall unconditionally guarantee, on a
senior subordinated basis, all of such Guarantor's obligations under such
Guarantor's guarantee and this Indenture on the terms set forth in this
Indenture; and (ii) immediately before and immediately after giving effect to
such transaction on a PRO FORMA basis, no Default or Event of Default shall have
occurred or be continuing.
Upon the sale or disposition (whether by merger, stock purchase, asset
sale or otherwise) of a Guarantor (or all of its assets) to an entity which is
not a Guarantor (including the designation of a Subsidiary to become an
Unrestricted Subsidiary), which transaction is otherwise in compliance with this
Indenture (including, without limitation, the provisions of Section 4.14), such
Guarantor will be deemed released from its obligations under its Guarantee of
the Securities; PROVIDED, HOWEVER, that any such termination shall occur only to
the extent that all obligations of such Guarantor under all of its guarantees
of, and under all of its pledges of assets or other security interests which
secure, any Indebtedness of the Company or any other Subsidiary shall also
terminate upon such release, sale or transfer.
ARTICLE XII
SUBORDINATION
SECTION 12.1. SECURITIES SUBORDINATED TO SENIOR DEBT.
The Company and the Guarantors and each Holder, by its acceptance of
Securities, agree that (a) the payment of the principal of and interest on the
Securities and (b) any other payment in respect of the Securities, including on
account of the acquisition or redemption of the Securities by the Company and
the Guarantors (including, without limitation, pursuant to Section 4.14, Article
X or Article XI) is subordinated, to the extent and in the manner provided in
this Article XII, to the prior payment in full in cash or Cash Equivalents of
all Senior Debt of the Company and the Guarantors and that these subordination
provisions are for the benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt and such holders are made obligees hereunder and any one or more of
them may enforce such provisions.
SECTION 12.2. NO PAYMENT ON SECURITIES IN CERTAIN CIRCUMSTANCES.
(a) No payment (by set-off or otherwise) shall be made by or
on behalf of the Company or a Guarantor, as applicable, on account of
any Obligation in respect of the Securities, including the principal
of, premium, if any, or interest or Liquidated Damages on the
Securities (including any repurchases of Securities), or on account of
the redemption provisions of the Securities, for cash or property
(other than Junior Securities), (i) upon the maturity of any Senior
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Debt of the Company or such Guarantor by lapse of time, acceleration
(unless waived) or otherwise, unless and until all principal of,
premium, if any, and the interest on such Senior Debt are first paid in
full in cash or Cash Equivalents (or such payment is duly provided for)
or otherwise to the extent holders accept satisfaction of amounts due
by settlement in other than cash or Cash Equivalents, or (ii) in the
event of default in the payment of any principal of, premium, if any,
or interest on Senior Debt of the Company or such Guarantor when it
becomes due and payable, whether at maturity, or at a date fixed for
prepayment or by declaration or otherwise (a "Payment Default"), unless
and until such Payment Default has been cured or waived or otherwise
has ceased to exist.
(b) Upon (i) the happening of an event of default other than a
Payment Default that permits the holders of Senior Debt to declare such
Senior Debt to be due and payable and (ii) written notice of such event
of default given to the Company and the Trustee by the Representative
under the Credit Agreement or the holders of an aggregate of at least
$10,000,000 principal amount outstanding of any other Senior Debt or
their representative (a "Payment Notice"), then, unless and until such
event of default has been cured or waived or otherwise has ceased to
exist, no payment (by set-off or otherwise) may be made by or on behalf
of the Company or any Guarantor which is an obligor under such Senior
Debt on account of any Obligation in respect of the Securities,
including the principal of, premium, if any, or interest on the
Securities, (including any repurchases of any of the Securities), or on
account of the redemption provisions of the Securities, in any such
case, other than payments made with Junior Securities. Notwithstanding
the foregoing, unless the Senior Debt in respect of which such event of
default exists has been declared due and payable in its entirety within
179 days after the Payment Notice is delivered as set forth above (the
"Payment Blockage Period") (and such declaration has not been rescinded
or waived), at the end of the Payment Blockage Period, the Company and
the Guarantors shall be required to pay all sums not paid to the
Holders of the Securities during the Payment Blockage Period due to the
foregoing prohibitions and to resume all other payments as and when due
on the Securities. Any number of Payment Notices may be given;
PROVIDED, HOWEVER, that (i) not more than one Payment Notice shall be
given within a period of any 360 consecutive days, and (ii) no default
that existed upon the date of such Payment Notice or the commencement
of such Payment Blockage Period (whether or not such event of default
is on the same issue of Senior Debt) shall be made the basis for the
commencement of any other Payment Blockage Period (it being
acknowledged that any subsequent action, or any subsequent breach of
any financial covenant for a period commencing after the expiration of
such Payment Blockage Period that, in either case, would give rise to a
new event of default, even though it is an event that would also have
been a separate breach pursuant to any provision under which a prior
event of default previously existed, shall constitute a new event of
default for this purpose).
(c) In furtherance of the provisions of Section 12.1, in the
event that, notwithstanding the foregoing provisions of this Section
12.2, any payment or distribution of assets of the Company or any
Guarantor (other than Junior Securities) shall be received by the
Trustee or the Holders at a time when such payment or distribution is
prohibited by the foregoing provisions of this Section 12.2, such
payment or distribution shall be held in trust for the benefit of the
holders of such Senior Debt, and shall be paid or delivered by the
Trustee or such Holders, as the case may be, to the holders of such
Senior Debt remaining unpaid or unprovided for or to their
representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing any of such
Senior Debt may have been issued, ratably according to the aggregate
principal amounts remaining unpaid on account of such Senior Debt held
or represented by each, for application to the payment of all such
Senior Debt remaining unpaid, to the extent necessary to pay or to
provide for the payment of all such Senior Debt in full in cash or Cash
68
Equivalents or otherwise to the extent holders accept satisfaction of
amounts due after giving effect to any concurrent payment or
distribution to the holders of such Senior Debt.
SECTION 12.3. SECURITIES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
DEBT ON DISSOLUTION, LIQUIDATION OR REORGANIZATION.
Upon any distribution of assets of the Company or any Guarantor upon
any dissolution, winding up, total or partial liquidation or reorganization of
the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities:
(a) the holders of all Senior Debt of the Company or such
Guarantor, as applicable, will first be entitled to receive payment in
full in cash or Cash Equivalents (or have such payment duly provided
for) or otherwise to the extent holders expressly accept satisfaction
of amounts due by settlement in other than cash or Cash Equivalents
before the Holders are entitled to receive any payment on account of
any Obligation in respect of the Securities, including the principal
of, premium, if any, and interest on the Securities (other than Junior
Securities); and
(b) any payment or distribution of assets of the Company or
such Guarantor of any kind or character from any source, whether in
cash, property or securities (other than Junior Securities) to which
the Holders or the Trustee on behalf of the Holders would be entitled
(by set-off or otherwise), except for the subordination provisions
contained in this Indenture, will be paid by the liquidating trustee or
agent or other person making such a payment or distribution directly to
the holders of such Senior Debt or their representative to the extent
necessary to make payment in full (or have such payment duly provided
for) on all such Senior Debt remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Debt.
SECTION 12.4. SECURITYHOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF
SENIOR DEBT.
Subject to the payment in full in cash or Cash Equivalents of all
Senior Debt of the Company or any Guarantor as provided herein, the Holders of
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments or distributions of assets of the Company applicable to the
Senior Debt until all amounts owing on the Securities shall be paid in full, and
for the purpose of such subrogation no such payments or distributions to the
holders of such Senior Debt by or on behalf of the Company or any Guarantor, or
by or on behalf of the Holders by virtue of this Article XII, which otherwise
would have been made to the Holders shall, as between the Company or any
Guarantor and the Holders, be deemed to be payment by the Company or any
Guarantor or on account of such Senior Debt, it being understood that the
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
such Senior Debt, on the other hand.
SECTION 12.5. OBLIGATIONS OF THE COMPANY AND THE GUARANTORS
UNCONDITIONAL.
Nothing contained in this Article XII or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company and any
Guarantors and the Holders, the obligation of each such Person, which is
absolute and unconditional, to pay to the Holders the principal of, premium, if
any, and interest and Liquidated Damages on the Securities as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
and the Guarantors other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XII, of the holders of Senior Debt in
respect of cash, property or securities of the Company and the Guarantors
69
received upon the exercise of any such remedy. Notwithstanding anything to the
contrary in this Article XII or elsewhere in this Indenture or in the
Securities, upon any distribution of assets of the Company and the Guarantors
referred to in this Article XII, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the liquidating Trustee or agent or other Person making any
distribution to the Trustee or to the Holders for the purpose of ascertaining
the Persons entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company or any Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII so long as such
court has been apprised of the provisions of, or the order, decree or
certificate makes reference to, the provisions of this Article XII. Nothing in
this Section 12.5 shall apply to the claims of, or payments to, the Trustee
under or pursuant to Section 7.7.
SECTION 12.6. TRUSTEE ENTITLED TO ASSUME PAYMENTS NOT PROHIBITED IN
ABSENCE OF NOTICE.
The Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment to or by
the Trustee unless and until a Trust Officer of the Trustee or any Paying Agent
shall have received, no later than one Business Day prior to such payment
written notice thereof from the Company or from one or more holders of Senior
Debt or from any representative therefor and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Sections 7.1 and 7.2,
shall be entitled in all respects conclusively to assume that no such fact
exists.
SECTION 12.7. APPLICATION BY TRUSTEE OF ASSETS DEPOSITED WITH IT.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of Securityholders
and, to the extent (i) the making of such deposit by the Company shall not be in
contravention of any term or provision of the Credit Agreement or other
Designated Senior Debt and (ii) allocated for the payment of Securities, shall
not be subject to the subordination provisions of this Article XII. Otherwise,
any deposit of assets with the Trustee or the Agent (whether or not in trust)
for the payment of principal of or interest on any Securities shall be subject
to the provisions of Sections 12.1, 12.2, 12.3 and 12.4; PROVIDED that, if prior
to one Business Day preceding the date on which by the terms of this Indenture
any such assets may become distributable for any purpose (including without
limitation, the payment of either principal of or interest on any Security) the
Trustee or such Paying Agent shall not have received with respect to such assets
the written notice provided for in Section 12.6, then the Trustee or such Paying
Agent shall have full power and authority to receive such assets and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such date.
SECTION 12.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF THE COMPANY, THE GUARANTORS OR HOLDERS OF SENIOR DEBT.
No right of any present or future holders of any Senior Debt to enforce
subordination provisions contained in this Article XII shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company or any Guarantor with the
terms of this Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of Senior Debt may
extend, renew, modify or amend the terms of the Senior Debt or any security
therefor and release, sell or exchange such security and otherwise deal freely
with the Company and the Guarantors, all without affecting the liabilities and
obligations of the parties to this Indenture or the Holders. The subordination
provisions contained in this Indenture are for the benefit of the holders from
70
time to time of Senior Debt and may not be rescinded, cancelled, amended or
modified in any way other than any amendment or modification that would not
adversely affect the rights of any holder of Senior Debt or any amendment or
modification that is consented to by each holder of Senior Debt that would be
adversely affected thereby. The subordination provisions hereof shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Senior Debt is rescinded or must otherwise be returned by any
holder of the Senior Debt upon the insolvency, bankruptcy, or reorganization of
the Company, any Guarantor, or otherwise, all as though such payment has not
been made.
SECTION 12.9. SECURITYHOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE
SUBORDINATION OF SECURITIES.
Each Holder of the Securities by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company or any Guarantor (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or any other marshalling of assets and liabilities of the
Company or any Guarantor), the immediate filing of a claim for the unpaid
balance of his Securities in the form required in said proceedings and cause
said claim to be approved. In the event of any liquidation or reorganization
of the Company or any Guarantor in bankruptcy, insolvency, receivership or
similar proceeding, if the Holders of the Securities (or the Trustee on their
behalf) have not filed any claim, proof of claim, or other instrument of
similar character necessary to enforce the obligations of the Company or any
Guarantor in respect of the Securities at least thirty (30) days before the
expiration of the time to file the same, then in such event, but only in such
event, the holders of the Designated Senior Debt or a representative on their
behalf may, as an attorney-in-fact for such Holders, file any claim, proof of
claim, or other instrument of similar character on behalf of such Holders.
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Senior Debt or their representative to authorize or consent to or
accept or adopt on behalf of any Securityholder any plan of reorganization,
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof, or to authorize the Trustee or the holders of Senior
Debt or their representative to vote in respect of the claim of any
Securityholder in any such proceeding.
SECTION 12.10. RIGHT OF TRUSTEE TO HOLD SENIOR DEBT.
The Trustee shall be entitled to all of the rights set forth in this
Article XII in respect of any Senior Debt at any time held by it to the same
extent as any other holder of Senior Debt, and nothing in this Indenture shall
be construed to deprive the Trustee of any of its rights as such holder.
SECTION 12.11. ARTICLE XII NOT TO PREVENT EVENTS OF DEFAULT.
The failure to make a payment on account of principal of, premium, if
any, or interest (or Liquidated Damages, if any) on the Securities by reason of
any provision of this Article XII shall not be construed as preventing the
occurrence of a Default or an Event of Default under Section 6.1 or in any way
limit the rights of the Trustee or any Holder to pursue any other rights or
remedies with respect to the Securities.
SECTION 12.12. NO FIDUCIARY DUTY OF TRUSTEE TO HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders (other than
for its willful misconduct or negligence) if it shall in good faith mistakenly
pay over or distribute to the Holders of Securities or the Company, any
Guarantor or any other Person, cash, property or securities to which any holders
of Senior Debt shall be entitled by virtue of this
71
Article XII or otherwise. Nothing in this Section 12.12 shall affect the
obligation of any other such Person to hold such payment for the benefit of, and
to pay such payment over to, the holders of Senior Debt or their representative.
In the event of any conflict between the fiduciary duty of the Trustee to the
Holders of Securities and to the holders of Senior Debt, the Trustee is
expressly authorized to resolve such conflict in favor of the Holders.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with the duties imposed by operation of the TIA, the imposed duties, upon
qualification of this Indenture under the TIA, shall control.
SECTION 13.2. NOTICES.
Any notices or other communications to the Company or any Guarantor or
the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company or any Guarantor:
Compass Aerospace Corporation
0000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Telecopy: (000) 000-0000
if to the Trustee:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: (000) 000-0000
Any party by notice to each other party may designate additional or
different addresses as shall be furnished in writing by such party. Any notice
or communication to any party shall be deemed to have been given or made as of
the date so delivered, if personally delivered; when answered back, if telexed;
when receipt is acknowledged, if telecopied; and five Business Days after
mailing if sent by registered or
72
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to a Securityholder shall be mailed
to him by first class mail or other equivalent means at his address as it
appears on the registration books of the Registrar and shall be sufficiently
given to him if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other Person
shall have the protection of TIA Section 312(c).
SECTION 13.4. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, such Person shall furnish to
the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been met; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such
counsel, all such conditions precedent have been met.
SECTION 13.5. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been met; and
(4) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been met; PROVIDED,
HOWEVER, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
73
SECTION 13.6. RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.7. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by law or
executive order to close. If a payment date is a Legal Holiday at such place,
payment may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 13.8. GOVERNING LAW.
THIS INDENTURE, THE GUARANTEES AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE
COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE AND THE SECURITIES, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE COMPANY AND THE GUARANTORS IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY
SECURITYHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY AND THE
GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 13.9. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any Guarantor or any of their respective
Subsidiaries. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
SECTION 13.10. NO RECOURSE AGAINST OTHERS.
No partner, incorporator, direct or indirect stockholder, director,
officer or employee, as such, past, present or future, of the Company or any
Guarantor, or any successor entity, shall have any personal liability in respect
of the obligations of the Company and the Guarantors under the Securities, this
Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation by reason of his, her or its status as such
partner, incorporator, stockholder, director, officer or employee. Each
Securityholder by accepting a Security waives and releases all such liability.
The waiver and release are part of the consideration for the issuance of the
Securities.
74
SECTION 13.11. SUCCESSORS.
All agreements of the Company and the Guarantors in this Indenture and
the Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 13.12. DUPLICATE ORIGINALS.
All parties may sign any number of copies or counterparts of this
Indenture. Each signed copy or counterpart shall be an original, but all of them
together shall represent the same agreement.
SECTION 13.13. SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Securities or in the Guarantees shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 13.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and headings of the
Articles and the Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 13.15. QUALIFICATION OF INDENTURE.
The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all costs and expenses (including attorneys' fees for the Company and the
Trustee) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive from
the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.16. REGISTRATION RIGHTS.
Certain Holders of the Securities may be entitled to certain
registration rights with respect to such Securities pursuant to, and subject to
the terms of, the Registration Rights Agreement.
75
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
COMPASS AEROSPACE CORPORATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
WESTERN METHODS MACHINERY CORPORATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
AEROMIL ENGINEERING COMPANY
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
76
XXXXXXXX MACHINE, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
XXXXXX MACHINE, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
WICHITA MANUFACTURING, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
SEA-LECT PRODUCTS, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
77
PACIFIC HILLS MANUFACTURING CO.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
MODERN MANUFACTURING, INC.
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
COMPASS AEROSPACE LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
TRIM ENGINEERING LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
78
TREFN ENGINEERING LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
TREFN ENGINEERING (METAL TREATMENTS)
DIVISION LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
TREFN FABRICATIONS LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
DIAC LIMITED
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
79
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
80
EXHIBIT A
[FORM OF SECURITY]
COMPASS AEROSPACE CORPORATION
101/8% SERIES C1 SENIOR SUBORDINATED NOTE DUE 2005
CUSIP No. ______________
No. $
Compass Aerospace Corporation, a Delaware corporation (hereinafter
called the "Company," which term includes any successors under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
________________, or registered assigns, the principal sum of _____________
Dollars, on April 15, 2005.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is made to the further provisions of this Security on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Instrument to be duly
executed as of July 30, 1999.
COMPASS AEROSPACE CORPORATION
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
Attest:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the within-mentioned
Indenture.
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Signatory
Dated:
------------------
1 Series C should be replaced with Series D in the Exchange Securities.
A-1
COMPASS AEROSPACE CORPORATION
101/8% Series C(2) Senior Subordinated Note due 2005
Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security 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 Depositary 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 requested by an authorized representative of
DTC (and any payment is made to Cede & Co. or such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.(3)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
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, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) 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 "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED
TO UNDER RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF
TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
COMPASS AEROSPACE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
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 LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO COMPASS
AEROSPACE CORPORATION THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR
(F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO
IN RULE 144(k) UNDER THE SECURITIES ACT AFTER THE ORIGINAL ISSUANCE OF THE
NOTES THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
COMPASS AEROSPACE CORPORATION SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
--------
(2) Series C should be replaced with Series D in the Exchange Securities.
(3) This paragraph should only be added if the Security is issued in global
form.
A-2
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.
1. INTEREST. Compass Aerospace Corporation, a Delaware corporation
(hereinafter called the "Company," which term includes any successors under
the Indenture hereinafter referred to), promises to pay interest on the
principal amount of this Security at the rate of 10 1/8 % per annum. To the
extent it is lawful, the Company promises to pay interest on any interest
payment due but unpaid on such principal amount at a rate of 10 1/8 % per
annum compounded semi-annually.
The Company will pay interest semi-annually on April 15 and October
15 of each year (each, an "Interest Payment Date"), commencing October 15,
1999. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid on the
Securities, from the date of the original issuance. Interest will be computed
on the basis of a 360-day year consisting of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest (and Liquidated
Damages, if any) on the Securities (except defaulted interest) to the Persons
who are the registered Holders at the close of business on the Record Date
immediately preceding the Interest Payment Date. Holders must surrender
Securities to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal, premium, and interest (and
Liquidated Damages, if any) in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment of public
and private debts ("Cash"). The Securities will be payable as to principal,
premium and interest (and Liquidated Damages, if any) at the office or agency
of the Company maintained for such purpose within the Borough of Manhattan,
the City and State of New York or, at the option of the Company, payment of
principal, premium and interest (and Liquidated Damages, if any) may be made
by check mailed to the Holders at their addresses set forth in the register
of Holders, and PROVIDED that payment by wire transfer of immediately
available funds will be required with respect to principal of and interest
(and Liquidated Damages, if any) and premium on all Global Securities and all
other Securities the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent at least 5 Business Days
prior to the relevant record date.
3. PAYING AGENT AND REGISTRAR. Initially, IBJ Whitehall Bank & Trust
Company (the "Trustee"), will act as Paying Agent and Registrar. The Company
may change any Paying Agent, Registrar or co-Registrar without notice to the
Holders. The Company or any of its Subsidiaries may, subject to certain
exceptions, act as Paying Agent, Registrar or co-Registrar.
4. INDENTURE. The Company issued the Securities under an Indenture,
dated as of July 30, 1999 (the "Indenture"), among the Company, the
Guarantors and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act, as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and said Act for a statement of
them. The Securities are senior subordinated obligations of the Company
limited in aggregate principal amount to $19,000,000. The Securities are, to
the extent and in the manner provided in the Indenture, subordinate and
subject in right of payment to the prior payment in full of all Senior Debt
of the Company, whether outstanding on the date of the Indenture or
thereafter created, incurred, assumed or guaranteed. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose.
5. REDEMPTION. Except as provided in this Paragraph 5 or in Article
III of the Indenture, the Company shall not have the right to redeem any
Securities. The Securities may be redeemed in whole or from time to time in
part at any time on and after April 15, 2002, at the option of the Company,
at the Redemption Price (expressed as a percentage of principal amount) set
forth below with respect to the indicated Redemption Date, in each case
(subject to the right of Holders of record on a Record Date that is on or
prior to such Redemption Date to receive interest due on the Interest Payment
Date to which such Record Date relates), plus any accrued but unpaid interest
(and Liquidated Damages, if any) to the Redemption Date.
A-3
If redeemed during
the 12-month period
Commencing April 15, Redemption Price
-------------------- ----------------
2002..................................... 105.063%
2003..................................... 102.531%
2004..................................... 100.000%
Notwithstanding the foregoing, prior to April 15, 2001, upon an
Initial Public Equity Offering of common stock for cash of the Company, up to
35% of the aggregate principal amount of the Securities originally
outstanding may be redeemed at the option of the Company within 90 days of
such Initial Public Equity Offering, on not less than 30 days, but not more
than 60 days, notice to each holder of the Securities to be redeemed, with
cash from the Net Cash Proceeds of such Initial Public Equity Offering, at a
redemption price equal to 110.125% of principal, (subject to the right of
Holders of record on a Record Date to receive interest due on an Interest
Payment Date that is on or prior to such Redemption Date) together with
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption; PROVIDED, HOWEVER, that at least 65% of the aggregate principal
amount of the original aggregate principal amount of the Securities remain
outstanding.
Any such redemption will comply with Article III of the Indenture.
6. NOTICE OF REDEMPTION. Notice of redemption will be sent by first
class mail, at least 30 days and not more than 60 days prior to the
Redemption Date to the Holder of each Security to be redeemed at such
Holder's last address as then shown upon the registry books of the Registrar.
Securities may be redeemed in part in multiples of $1,000 only.
Except as set forth in the Indenture, from and after any Redemption
Date, if monies for the redemption of the Securities called for redemption
shall have been deposited with the Paying Agent on such Redemption Date, the
Securities called for redemption will cease to bear interest and the only
right of the Holders of such Securities will be to receive payment of the
Redemption Price, plus any accrued and unpaid interest (and Liquidated
Damages, if any) to the Redemption Date.
7. DENOMINATIONS; TRANSFER; EXCHANGE. The Securities are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder may register the transfer of, or exchange
Securities in accordance with, the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities (a) selected for redemption except the unredeemed portion of any
Security being redeemed in part or (b) for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redemption
and ending at the close of business on the day of such mailing.
8. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as the owner of it for all purposes.
9. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent(s)
will pay the money back to the Company at its written request. After that,
all liability of the Trustee and such Paying Agent(s) with respect to such
money shall cease.
10. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. Except as set forth
in the Indenture, if the Company irrevocably deposits with the Trustee, in
trust, for the benefit of the Holders, cash, U.S. Government Obligations or a
combination thereof, in such amounts as will be sufficient in the opinion of
a nationally recognized firm of independent public accountants selected by
the Trustee, to pay the principal of, premium, if any, and interest (and
Liquidated Damages, if any) on the Securities to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Securities (including the financial covenants, but excluding its obligation
to pay the principal of, premium, if any, and interest
A-4
(and Liquidated Damages, if any) on the Securities). Upon satisfaction of
certain additional conditions set forth in the Indenture, the Company may
elect to have its obligations discharged with respect to outstanding
Securities.
11. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Securities may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event
of Default or compliance with any provision may be waived with the consent of
the Holders of a majority in aggregate principal amount of the Securities
then outstanding. Without notice to or consent of any Holder, the parties
thereto may under certain circumstances amend or supplement the Indenture or
the Securities to, among other things, cure any ambiguity, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder of a Security.
12. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and any Guarantors to, among other things,
incur additional Indebtedness and issue Preferred Stock, pay dividends or
make certain other Restricted Payments, enter into certain transactions with
Affiliates, incur Liens, sell assets and subsidiary stock, merge or
consolidate with any other Person or transfer (by lease, assignment or
otherwise) substantially all of the properties and assets of the Company. The
limitations are subject to a number of important qualifications and
exceptions. The Company must periodically report to the Trustee on compliance
with such limitations.
13. RANKING. Payment of principal, premium, if any, and interest
(and Liquidated Damages, if any) on the Securities is subordinated, in the
manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior Debt.
14. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to offer to purchase on the Change of Control Purchase Date
all outstanding Securities at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest (and
Liquidated Damages, if any), if any, to the Change of Control Purchase
Date. Holders of Securities will receive a Change of Control Offer from
the Company prior to any related Change of Control Purchase Date and
may elect to have such Securities purchased by completing the form
entitled "Option of Holder to Elect Purchase" appearing below.
(b) The Indenture imposes certain limitations on the ability
of the Company, the Guarantors or any of their respective Subsidiaries
to sell assets and subsidiary stock. In the event the proceeds from a
permitted Asset Sale exceed certain amounts, as specified in the
Indenture, the Company will be required either to reinvest the proceeds
of such Asset Sale in a Related Business, repay certain Indebtedness or
to make an offer to purchase each Holder's Securities at 100% of the
principal amount thereof, plus accrued interest (and Liquidated
Damages, if any), if any, to the purchase date.
15. NOTATION OF GUARANTEE. As set forth more fully in the Indenture,
the Persons constituting Guarantors from time to time, in accordance with the
provisions of the Indenture, unconditionally and jointly and severally
guarantee, in accordance with Section 11.1 of the Indenture, to the Holder and
to the Trustee and its successors and assigns, that (i) the principal of and
interest on the Security will be paid, whether at the Maturity Date or Interest
Payment Dates, by acceleration, call for redemption upon a Change of Control
Offer, upon an Asset Sale Offer or otherwise, and all other obligations of the
Company to the Holder or the Trustee under the Indenture or this Security will
be promptly paid in full or performed, all in accordance with the terms of the
Indenture and this Security, and (ii) in the case of any extension of payment or
renewal of this Security or any of such other obligations, they will be paid in
full when due or performed in accordance with the terms of such extension or
renewal, whether at the Maturity Date, as so extended, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer or
otherwise. Such guarantees shall cease to apply, and shall be null and void,
with respect to any Guarantor who, pursuant to Article XI of the Indenture, is
released from its guarantees, or whose guarantees otherwise cease to be
applicable pursuant to the terms of the Indenture.
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When a successor assumes all the obligations of its predecessor
under the Securities and the Indenture, the predecessor will be released from
those obligations.
16. DEFAULTS AND REMEDIES. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Securities may declare all the Securities to
be due and payable immediately, or if there are any amounts outstanding under
the Credit Agreement shall become immediately due and payable upon the first
to occur of an acceleration under the Credit Agreement or three Business Days
after receipt by the Company and the representative of the holders of the
Indebtedness under the Credit Agreement of the notice of such an acceleration
but only if such Event of Default is then continuing. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company or any of its
Significant Subsidiaries, all outstanding Securities will become due and
payable without further action or notice. Securityholders may not enforce the
Indenture, the Securities or the Guarantees except as provided in the
Indenture. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the then outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default or Event of Default (except
a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company, any Guarantor, any of their
Subsidiaries or any of their respective Affiliates, and may otherwise deal
with such Persons as if it were not the Trustee.
18. NO RECOURSE AGAINST OTHERS. No partner, incorporator, direct or
indirect stockholder, partner, director, officer or employee, as such, past,
present or future, of the Company or any Guarantor, or any successor entity,
shall have any personal liability in respect of the obligations of the
Company and the Guarantors under the Securities or the Indenture by reason of
his, her or its status as such partner, incorporator, stockholder, director,
officer or employee. Each Holder of a Security by accepting a Security waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities.
19. AUTHENTICATION. This Security shall not be valid until the
Trustee or authenticating agent signs the certificate of authentication on
the other side of this Security.
20. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Security or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= 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).
21. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company will
cause CUSIP numbers to be printed on the Securities as a convenience to the
Holders of the Securities. No representation is made as to the accuracy of
such numbers as printed on the Securities and reliance may be placed only on
the other identification numbers printed hereon.
22. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.(4)
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Securities shall have all the rights set forth in the
Registration Rights Agreement.
23. GOVERNING LAW. The Indenture and the Securities shall be
governed by and construed in accordance with the internal laws of the State
of New York.
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(4) This paragraph should be included only for the Initial Securities.
A-6
[FORM OF ASSIGNMENT]
I or we assign this Security to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code of assignee)
______________________________________________________________________________
(Please insert Social Security or other identifying number of assignee)
and irrevocably appoint _______________________________________ agent to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Dated: _______________ Signed:________________________________________________
______________________________________________________________________________
(Sign exactly as name appears on the other side of this Security)
Signature Guarantee*
--------
* NOTICE: The Signature must be guaranteed by an Institution which is a
member of one of the following recognized signature Guarantee Programs:
(i) The Securities Transfer Agent Medallion Program (STAMP); (ii) The
New York Stock Exchange Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP); or (iv) in such other guarantee
program acceptable to the Trustee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.14 or Article X of the Indenture, check the appropriate
box: / / Section 4.14 / / Article X.
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.14 or Article X of the Indenture, as the case
may be, state the amount you want to be purchased: $________.
Date: ________________ Signature:_________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee**
--------------------
** NOTICE: The Signature must be guaranteed by an Institution which is
a member of one of the following recognized signature Guarantee
Programs: (i) The Securities Transfer Agent Medallion Program
(STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP);
(iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such
other guarantee program acceptable to the Trustee.
A-8
SCHEDULE OF EXCHANGES OF DEFINITIVE SECURITIES*
The following exchanges of a part of this Global Security for
Definitive Securities have been made:
Amount of Amount of Principal Amount Signature of
decrease in increase in of this Global authorized officer
Principal Amount Principal Amount of Security following of Trustee or
Date of of this Global this Global such decrease (or Securities
Exchange Security Security increase) Custodian
--------------------------------------------------------------------------------------------------------------------
--------
* This schedule should only be added if the Security is issued in
global form.
A-9
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
TRANSFER RESTRICTED SECURITIES*
Re: 10 1/8% Series C Senior Subordinated Notes Due 2005 of Compass
Aerospace Corporation
This Certificate relates to $_____________ principal amount of
Securities held in (check applicable space) _____ book-entry or ______
definitive form by _____________________________________ (the "Transferor").
The Transferor (check applicable box):
/ / has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Security
held by the Depository a Security or Securities in definitive,
registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such
Global Security (or the portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or
register the transfer of a Security or Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that Transferor is familiar with the
Indenture relating to the above-captioned Securities and as provided in Section
2.6 of such Indenture, the transfer of this Security does not require
registration under the Securities Act (as defined below) because:
/ / Such Security is being acquired for the Transferor's own
account, without transfer (in satisfaction of Section
2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of the Indenture).
/ / Such Security is being transferred to a "qualified
institutional buyer" (within the meaning of Rule 144A
promulgated under the Securities Act), that is aware that any
sale of Securities to it will be made in reliance on Rule 144A
under the Securities Act and that is acquiring such Transfer
Restricted Security for its own account, or for the account of
another such "qualified institutional buyer" (in satisfaction
of Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the
Indenture).
/ / Such Security is being transferred pursuant to an exemption
from registration in accordance with Rule 144, or outside the
United States in an Offshore Transaction in compliance with
Rule 904 under the Securities Act, or pursuant to an effective
registration statement under the Securities Act (in
satisfaction of Section 2.6(a)(ii)(C) or Section 2.6(d)(i)(C)
of the Indenture).
/ / Such Security is being transferred in reliance on and in
compliance with an exemption from the registration
requirements of the Securities Act and in accordance with
applicable securities laws of the States of the United States,
other than as provided in the immediately preceding paragraph.
An Opinion of Counsel to the effect that such transfer does
not require registration under the Securities Act accompanies
this Certificate (in satisfaction of Section 2.6(a)(ii)(D) or
Section 2.6(d)(i)(D) of the Indenture).
______________________________________________________________________________
(Insert Name of Transferor)
By:___________________________________________________________________________
Date:_______________________
____________________________
--------------
* This Certificate shall be included only for Initial Securities.
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF
SECURITIES*
Re: 10 1/8% Series D Senior Subordinated Notes Due 2005 of Compass
Aerospace Corporation
This Certificate relates to $_______________ principal amount of
Securities held in (check applicable box) _____ book-entry or ______ definitive
form by _______________________________________ (the "Transferor").
The Transferor (check applicable box):
/ / has requested the Trustee by written order to deliver in
exchange for its beneficial interest in the Global Security
held by the Depositary a Security or Securities in definitive,
registered form of authorized denominations and an aggregate
principal amount equal to its beneficial interest in such
Global Security (or the portion thereof indicated above); or
/ / has requested the Registrar by written order to exchange or
register the transfer of a Security or Securities.
--------
* This certificate shall be included only for the Exchange Securities.
A-11
