Exhibit 4.9
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PRIMEDIA INC.
and the Guarantors listed herein
7 5/8 Senior Notes due 2008
Series A and Series B
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INDENTURE
Dated as of February 17, 1998
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THE BANK OF NEW YORK
Trustee
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Table of Contents
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions .................................................. 1
Section 1.02 Other Definitions ...................................... 16
Section 1.03 Incorporation by Reference of Trust Indenture Act ...... 16
Section 1.04 Rules of Construction .................................. 17
ARTICLE 2
THE SECURITIES
Section 2.01 Form and Dating ........................................ 17
Section 2.02. Execution and Authentication ........................... 18
Section 2.03. Registrar and Paying Agent ............................. 18
Section 2.04. Paying Agent to Hold Money in Trust .................... 18
Section 2.05. Holder Lists ........................................... 19
Section 2.06. Transfer and Exchange .................................. 19
Section 2.07. Replacement Notes ...................................... 30
Section 2.08. Outstanding Notes ...................................... 30
Section 2.09. Treasury Notes ......................................... 31
Section 2.10. Temporary Notes ........................................ 31
Section 2.11. Cancellation ........................................... 31
Section 2.12. Defaulted Interest ..................................... 31
Section 2.13 CUSIP Numbers .......................................... 32
ARTICLE 3
OPTIONAL REDEMPTION AND
OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
Section 3.01 Notices to Trustee ..................................... 32
Section 3.02 Selection of Securities to Be Redeemed ................. 32
Section 3.03 Notices to Holders ..................................... 33
Section 3.04 Effect of Notice of Redemption ......................... 33
Section 3.05 Deposit of Redemption Price or Purchase Price .......... 34
Section 3.06 Securities Redeemed in Part ............................ 34
Section 3.07 Optional Redemption .................................... 34
Section 3.08 Optional Redemption Upon Change of Control ............. 35
Section 3.09 Sinking Fund ........................................... 35
ARTICLE 4
COVENANTS
Section 4.01 Payment of Securities .................................. 35
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Section 4.02 Maintenance of Office or Agency ........................ 35
Section 4.03 SEC Reports; Financial Statements ...................... 36
Section 4.04 Compliance Certificate ................................. 36
Section 4.05 Compliance With Laws, Taxes ............................ 37
Section 4.06 Stay, Extension and Usury Laws ......................... 37
Section 4.07 Limitations on Restricted Payments ..................... 38
Section 4.08 Dividends and Payment Restrictions
Affecting Restricted Subsidiaries .................... 41
Section 4.09 Incurrence of Indebtedness ............................. 41
Section 4.10 Change of Control ...................................... 44
Section 4.11 Limitations on Asset Sales ............................. 45
Section 4.12 Transactions With Affiliates ........................... 46
Section 4.13 Limitations on Liens ................................... 47
Section 4.14 Investments in Unrestricted Subsidiaries ............... 47
Section 4.15 Payments for Consent ................................... 48
Section 4.16 Corporate Existence. ................................... 49
Section 4.17 Subsidiary Ownership. .................................. 49
Section 4.18 Rule 144A Information Requirement ...................... 49
ARTICLE 5
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets ............... 49
Section 5.02 Successor Corporation Substituted ...................... 50
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01 Events of Default ...................................... 50
Section 6.02 Acceleration ........................................... 52
Section 6.03 Other Remedies ......................................... 53
Section 6.04 Waiver of Past Defaults ................................ 53
Section 6.05 Control by Majority .................................... 53
Section 6.06 Limitations on Suits ................................... 53
Section 6.07 Rights of Holders to Receive Payment ................... 54
Section 6.08 Collection Suit by Trustee ............................. 54
Section 6.09 Trustee May File Proofs of Claim ....................... 54
Section 6.10 Priorities ............................................. 55
Section 6.11 Undertaking for Costs .................................. 55
ARTICLE 7
TRUSTEE
Section 7.01 Duties of Trustee ...................................... 55
Section 7.02 Rights of Trustee ...................................... 56
Section 7.03 Individual Rights of Trustee ........................... 57
Section 7.04 Trustee's Disclaimer ................................... 57
Section 7.05 Notice of Defaults ..................................... 57
Section 7.06 Reports by Trustee to Holders .......................... 57
Section 7.07 Compensation and Indemnity ............................. 58
Section 7.08 Replacement of Trustee ................................. 58
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Section 7.09 Successor Trustee by Merger, etc ....................... 59
Section 7.10 Eligibility; Disqualification .......................... 59
Section 7.11 Preferential Collection of Claims Against Company ...... 59
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01 Termination of Company's and Guarantors' Obligations ... 60
Section 8.02 Application of Trust Money ............................. 61
Section 8.03 Repayment to Company ................................... 61
Section 8.04 Reinstatement .......................................... 61
ARTICLE 9
AMENDMENTS
Section 9.01 Without Consent of Holders ............................. 62
Section 9.02 With Consent of Holders ................................ 62
Section 9.03 Compliance with Trust Indenture Act .................... 63
Section 9.04 Revocation and Effect of Consents ...................... 63
Section 9.05 Notation on or Exchange of Securities .................. 64
Section 9.06 Trustee to Sign Amendments, etc. ....................... 64
ARTICLE 10
GUARANTEE
Section 10.01 Subsidiary Guarantee ................................... 65
Section 10.02 Execution and Delivery of Guarantee .................... 66
Section 10.03 Guarantors May Consolidate, etc., on Certain Terms ..... 66
Section 10.04 Releases Following Sale of Assets ...................... 67
Section 10.05 "Trustee" to Include Paying Agent ...................... 67
Section 10.06 Additional Subsidiary Guarantees ....................... 68
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls ........................... 68
Section 11.02 Notices ................................................ 68
Section 11.03 Communication by Holders with Other Holders ............ 69
Section 11.04 Certificate and Opinion as to Conditions Precedent ..... 69
Section 11.05 Statements Required in Certificate or Opinion .......... 69
Section 11.06 Rules by Trustee and Agents ............................ 70
Section 11.07 Legal Holidays ......................................... 70
Section 11.08 No Recourse Against Others ............................. 70
Section 11.09 Governing Law .......................................... 70
Section 11.10 No Adverse Interpretation of Other Agreements .......... 70
Section 11.11 Successors ............................................. 71
Section 11.12 Severability ........................................... 71
Section 11.13 Counterpart Originals .................................. 71
Section 11.14 Trustee as Paying Agent and Registrar .................. 71
Section 11.15 Table of Contents, Headings, etc. ...................... 71
Section 11.16 Bank of New York Not Acting in Individual Capacity ..... 71
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SIGNATURES ......................................................... 67, 68, 69
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EXHIBIT A FORM OF SECURITY
EXHIBIT A-1 FORM OF GUARANTEE
EXHIBIT B FORM OF CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF SECURITIES
EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE
EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
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EXHIBIT 4.9
INDENTURE, dated as of February 17, 1998, among PRIMEDIA Inc., a Delaware
corporation (the "Company"), the corporations listed on Schedule I hereto (each
a "Guarantor" and collectively, the "Guarantors") and The Bank of New York, a
New York banking corporation, as Trustee.
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders (as defined below) of 75/8% Senior
Notes due 2008 (the "Series A Notes") and the 75/8% Senior Notes due 2008 to be
issued in exchange for the Series A Notes (the "Series B Notes" and, together
with the Series A Notes, the "Securities" or the "Notes") issued by the Company
(as defined below):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS
"144A Global Note" means a global note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of, and registered in the name of, the Depositary or its
nominee that will be issued in a denomination equal to the outstanding principal
amount of the Notes sold in reliance on Rule 144A.
"Adjusted Consolidated Net Income" means, with respect to any Person for
any period, (i) the Consolidated Net Income of such Person for such period, plus
(ii) in the case of the Company and its Restricted Subsidiaries, all cash
received during such period by the Company or any Restricted Subsidiary from its
Unrestricted Subsidiaries from the payment of dividends or distributions
(including tax sharing payments and loans or advances which are junior in right
of payment to the Securities and have a longer Average Life than the
Securities), but only to the extent such cash payments are not otherwise
included in "Adjusted Consolidated Net Income." Each item of Adjusted
Consolidated Net Income will be determined in conformity with GAAP, except that,
for purposes of the application of Accounting Principles Board Opinions Nos. 16
and 17, such Person may select any amortization practice allowable by GAAP up to
40 years, notwithstanding the use of a different amortization in such Person's
consolidated financial statements. Any designation of a Subsidiary of the
Company as a Restricted Subsidiary or Unrestricted Subsidiary at or prior to the
time of the calculation of Adjusted Consolidated Net Income of a Subsidiary will
be treated as if it had occurred at the beginning of the applicable period.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling," "controlled by,"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly the power to direct or cause the direction of
the management or policies, of the controlled person, whether through ownership
of voting securities, by agreement or otherwise.
"Agent" means any Registrar or Paying Agent.
"Applicable Premium" with respect to any Security being redeemed pursuant
to Section 3.08 shall equal the greater of (i) 1.0% of the then outstanding
principal amount of such Security and (ii) the excess of (A) the present value
of the required interest and principal payments due on such Security, computed
using a discount rate equal to the Treasury Rate plus the Applicable Spread,
over (B) the then outstanding principal amount of such Security.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of the
Depositary, Euroclear and Cedel that apply to such transfer or exchange.
"Applicable Spread" means one half of one percent.
"Asset Sale" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by the referent Person of any of its
assets (including by way of a sale-and-leaseback and including the sale or other
transfer of any of the Capital Stock of any Subsidiary of the referent Person);
provided, that notwithstanding the foregoing, the term "Asset Sale" shall not
include the sale, lease, conveyance, disposition or other transfer of (i) with
respect to an Unrestricted Subsidiary, (A) any assets not constituting all or
substantially all of the assets of any Net Cash Flow Unrestricted Subsidiary and
(B) any Capital Stock or any assets of any Restricted Payment Unrestricted
Subsidiary, (ii) all or substantially all of the assets of the Company, as
permitted pursuant to Section 5.01 hereof, (iii) any assets between the Company,
any Restricted Subsidiary or any Unrestricted Subsidiary, (iv) any sale,
conveyance, disposition or other transfer of (A) cash and cash equivalents, (B)
inventory in the ordinary course of business and (C) any other tangible or
intangible asset, in each case in the ordinary course of business, of the
Company or its Restricted Subsidiaries, or (v) the sale or discount, in each
case without recourse, of accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof.
"Average Life" means, as of the date of determination, with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment (assuming the exercise by the obligor of
such debt security of all unconditional (other than as to the giving of notice)
extension options of each such scheduled payment date) of such debt security
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
"Bank Credit Facility" means the $1.5 billion credit facilities with The
Chase Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank
of Nova Scotia, as agent.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board of Directors of the Company.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease which
would at such time be so required to be capitalized on the balance sheet in
accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock.
"Cedel" means Cedel Bank, SA.
"Change of Control" means such time as (i) a "person" or "group" (within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than KKR
and its Affiliates, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of more than (A) 35 percent (35%) of the total voting
power of the then outstanding voting stock of the Company and (B) the total
voting power of the then outstanding voting stock of the Company beneficially
owned by KKR and its Affiliates or (ii) during any period of two consecutive
calendar years, individuals who at the beginning of such period constituted the
Company's Board of Directors (together with any new directors whose election by
the Company's Board of Directors or whose nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
Directors then still in office who either were 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 directors then in
office.
"Class D Subordinated Debentures" means the 10% Class D Subordinated
Exchange Debentures due 2008 of the Company issuable in exchange for the Series
D Preferred Stock.
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"Class E Subordinated Debentures" means the 9.20% Class E Subordinated
Exchange Debentures due 2009 of the Company issuable in exchange for the Series
E Preferred Stock.
"Class F Subordinated Debentures" means the 9.20% Class F Subordinated
Exchange Debentures due 2009 of the Company issuable in exchange for the Series
F Preferred Stock.
"Class G Subordinated Debentures" means the 85/8% Class G Subordinated
Exchange Debentures due 2010 of the Company issuable in exchange for the Series
G Preferred Stock.
"Class H Subordinated Debentures" means the 85/8% Class G Subordinated
Exchange Debentures due 2010 of the Company issuable in exchange for the Series
H Preferred Stock.
"Class D Subordinated Debenture means the indenture between the Company
and the Subordinated Debenture Trustee referred to therein pursuant to which the
Class D Subordinated Debentures will be issued.
"Class E Subordinated Debenture Indenture" means the indenture between the
Company and the Subordinated Debenture Trustee referred to therein pursuant to
which the Class E Subordinated Debentures will be issued.
"Class F Subordinated Debenture Indenture" means the indenture between the
Company and the Subordinated Debenture Trustee referred to therein pursuant to
which the Class F Subordinated Debentures will be issued.
"Class G Subordinated Debenture Indenture" means the indenture between the
Company and the Subordinated Debenture Trustee referred to therein pursuant to
which the Class G Subordinated Debentures will be issued.
"Class H Subordinated Debenture Indenture" means the indenture between the
Company and the Subordinated Debenture Trustee referred to therein pursuant to
which the Class H Subordinated Debentures will be issued.
"Common Stock" means the common stock, par value $0.01 per share, of the
Company.
"Company" means (i) PRIMEDIA Inc., a Delaware corporation, and (ii) any
successor of PRIMEDIA Inc. pursuant to Article 5 hereof.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Adjusted Consolidated Net Income of such Person for such period plus (a) (i)
with respect to any Restricted Subsidiary other than a Partially Owned
Restricted Subsidiary, provision for taxes based on income or profits to the
extent such provision for taxes was included in computing Adjusted Consolidated
Net Income and (ii) with respect to any Partially Owned Restricted Subsidiary,
the Pro Rata Portion of any provision for taxes based on income or profits to
the extent such provision for taxes was included in computing Adjusted
Consolidated Net Income, plus (b) (i) with respect to any Restricted Subsidiary
other than a Partially Owned Restricted Subsidiary, consolidated Interest
Expense, whether paid or accrued, to the extent such expense was deducted in
computing Adjusted Consolidated Net Income (including amortization of original
issue discount and non-cash interest payments), and (ii) with respect to any
Partially Owned Restricted Subsidiary, the Pro Rata Portion of consolidated
Interest Expense, whether paid or accrued, to the extent such expense was
deducted in computing Adjusted Consolidated Net Income (including amortization
of original issue discount and non-cash interest payments), plus (c) (i) with
respect to any Restricted Subsidiary other than a Partially Owned Restricted
Subsidiary, depreciation, amortization and other non-cash charges to the extent
such depreciation, amortization and other non-cash charges were deducted in
computing Adjusted Consolidated Net Income (including amortization of goodwill
and other intangibles) and (ii) with respect to any Partially Owned Restricted
Subsidiary, the Pro Rata Portion of depreciation, amortization and other
non-cash charges to the extent such depreciation, amortization and other
non-cash charges were deducted in computing Adjusted Consolidated Net Income
(including amortization of goodwill and other intangibles); provided, with
respect to the calculation of a Person's Debt to Consolidated Cash Flow Ratio,
that if, during such period, (a) such Person or any of its Subsidiaries shall
have made any Asset Sales (other than, in the case of the Company and its
Restricted Subsidiaries, sales of the Capital Stock of or any assets
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of Unrestricted Subsidiaries which constitute Asset Sales), Consolidated Cash
Flow of such Person for such period shall be reduced by an amount equal to the
Consolidated Cash Flow (if positive), to the extent such Consolidated Cash Flow
was included in computing Consolidated Cash Flow, directly attributable to the
assets or Capital Stock which are the subject of such Asset Sales for such
period or increased by an amount equal to the Consolidated Cash Flow (if
negative), to the extent such Consolidated Cash Flow was included in computing
Consolidated Cash Flow, directly attributable thereto for such period and (b)
such Person or any of its Subsidiaries (other than, in the case of the Company
and its Restricted Subsidiaries, Unrestricted Subsidiaries) has made any
acquisition of assets or Capital Stock (occurring by merger or otherwise),
including without limitation, any acquisition of assets or Capital Stock
occurring in connection with a transaction causing a calculation to be made
hereunder, Consolidated Cash Flow of such person shall be calculated
(notwithstanding clause (a) of the definition of Consolidated Net Income) as if
such acquisition of assets or Capital Stock (including the incurrence of any
Indebtedness in connection with any such acquisition and the application of the
proceeds thereof) took place on the first day of such period. Consolidated Cash
Flow of such Person shall be determined for any period without regard to changes
in Working Capital of such Person and its Subsidiaries during such period.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the (a) consolidated Interest Expense, whether paid or accrued, to the
extent such expense was deducted in computing Adjusted Consolidated Net Income
(including amortization of original issue discount and non-cash interest
payments) and (b) the amount of all cash dividend payments on all series of
preferred stock other than cash dividends on preferred stock of Unrestricted
Subsidiaries and cash dividends paid to such Person or its Subsidiaries;
provided that with respect to Partially Owned Restricted Subsidiaries, only the
Pro Rata Portion of any amounts covered by clauses (a) and (b) above shall be
included in calculating Consolidated Fixed Charges; provided further that if,
during such period, (i) such Person or any of its Subsidiaries shall have made
any Asset Sales (other than in the case of the Company and its Restricted
Subsidiaries, sales of the Capital Stock of or any assets of Unrestricted
Subsidiaries which constitute asset sales), Consolidated Fixed Charges of such
Person for such period shall be reduced by an amount equal to the Consolidated
Fixed Charges directly attributable to the assets which are the subject of such
Asset Sales for such period and (ii) such Person or any of its Subsidiaries
(other than in the case of the Company and its Restricted Subsidiaries,
Unrestricted Subsidiaries) has made any acquisition of assets or Capital Stock
(occurring by merger or otherwise), including, without limitation, any
acquisition of assets or Capital Stock occurring in connection with the
transaction causing a calculation to be made hereunder, Consolidated Fixed
Charges of such Person shall be calculated as if such acquisition of assets or
Capital Stock (including the incurrence of any Indebtedness in connection with
any such acquisition and the application of the proceeds thereof) took place on
the first day of such period.
"Consolidated Net Cash Flow" means, with respect to any Person for any
period, the aggregate Consolidated Cash Flow of such Person for such period,
minus (a) capital expenditures of such Person and its Subsidiaries (and in the
case of the Company and its Restricted Subsidiaries, excluding Unrestricted
Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries,
including only the Pro Rata Portion thereof), minus (b) the aggregate amount of
all cash dividends paid by such Person and its Subsidiaries (and in the case of
the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof) to holders of its Capital Stock other than to such
Person or its Subsidiaries, minus (c) the aggregate amount of all taxes based on
income or profits paid by such Person and its Subsidiaries (and in the case of
the Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof) other than to such Person or its Subsidiaries, minus
(d) cash Interest Expense of such Person and its Subsidiaries (and in the case
of the Company and its Restricted Subsidiaries, excluding Unrestricted
Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries,
including only the Pro Rata Portion thereof), minus (e) repayments of principal
of Indebtedness by such Person and its Subsidiaries (and in the case of the
Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof), minus (f) any increases in Working Capital of such
Person and its Subsidiaries (and in the case of the Company and its Restricted
Subsidiaries, excluding Unrestricted Subsidiaries and, in the case of Partially
Owned Restricted Subsidiaries, including only the Pro Rata Portion thereof), and
plus (g) any decreases in Working Capital of such Person and its Subsidiaries
(and in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, in the case of Partially Owned Restricted
Subsidiaries, including only the Pro Rata Portion thereof), in each case, for
such period and determined in accordance with GAAP; provided that in calculating
the amount referred to in clause (f) or (g) above, as the case may be, for any
period during which the Company or any of its Restricted Subsidiaries has
consummated an Asset Sale (other than, the case of the Company and its
Restricted Subsidiaries, sales of Capital Stock of, cash or any assets of
Unrestricted
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Subsidiaries which constitute Asset Sales), the portion of the change in Working
Capital for such period attributable to the entity or business sold or purchased
shall be based (x) in the case of such an Asset Sale, on the change in Working
Capital attributable to the entity or business sold from the first day of such
period to the date of the consummation of such sale and (y) in the case of an
acquisition, on the change in Working Capital attributable to the entity or
business acquired from the date of consummation of such acquisition to the last
day of such period.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate net income (or loss) of such Person and its Subsidiaries
(and in the case of the Company and its Restricted Subsidiaries, excluding
Unrestricted Subsidiaries and, with respect to any Partially Owned Restricted
Subsidiary, including only the Pro Rata Portion of the net income (or loss) of
such Partially Owned Restricted Subsidiary as of any date of determination of
Consolidated Net Income for the Company and its Restricted Subsidiaries) for
such period, on a consolidated basis, determined in accordance with GAAP,
provided that (i) the net income (or loss) of any Person which is not a
Subsidiary or is accounted for by the equity method of accounting shall be
included only to the extent of the amount of cash dividends or distributions
(including tax sharing payments and loans or advances which are junior in right
of payment to the Securities and have a longer Average Life than the Securities)
paid to the referent Person or a Subsidiary of the referent Person, (ii) except
to the extent includable pursuant to the foregoing clause (i), the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of such
Person or is merged into or consolidated with such Person or any of its
Subsidiaries or that Person's assets are acquired by such Person or any of its
Subsidiaries shall be excluded, (iii) any gains or losses attributable to Asset
Sales net of related tax costs or tax benefits, as the case may be, shall be
excluded and (iv) the net income of any Unrestricted Subsidiary (and, solely for
purposes of Section 4.07 hereof, the net income of any Partially Owned
Restricted Subsidiary) shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Unrestricted Subsidiary
(or, solely for the purposes of Section 4.07 hereof, any Partially Owned
Restricted Subsidiary) of that net income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders that, in each such
case, has not been legally waived or otherwise satisfied.
"Consolidated Net Worth" means, for purposes of this Indenture, at any
date of determination, the sum of the Capital Stock and additional paid-in
capital plus retained earnings (or minus accumulated deficit) of the referent
Person and its Subsidiaries on a consolidated basis, less amounts attributable
to Redeemable Stock, each item to be determined in conformity with GAAP
(excluding the effects of foreign currency exchange adjustments under Financial
Accounting Standards Board Statement of Financial Accounting Standards No. 52),
except that all effects of the application of Accounting Principles Board
Opinions Nos. 16 and 17 and related interpretations shall be disregarded.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Indenture is located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency
Group.
"Credit Facilities" means, collectively, the Bank Credit Facility and the
New Credit Facility, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, in each
case as amended, modified, renewed, refunded or refinanced from time to time, as
permitted in clause (i) of the second paragraph of Section 4.09 hereof.
"Currency Agreement" means the obligations of any Person pursuant to any
foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect such Person or any of its subsidiaries against
fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Debt to Consolidated Cash Flow Ratio" means the ratio of all Indebtedness
of the Company and its Restricted Subsidiaries to Consolidated Cash Flow.
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"Default" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of the
Holder thereof and issued in accordance with Section 2.06 hereof, in the form of
Exhibit A hereto except that such Note shall not bear the Global Note Legend and
shall not have the "Schedule of Exchanges of Interests in the Global Note"
attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Equity Interests" means Capital Stock, warrants, options or other rights
to acquire Capital Stock (but excluding any debt security which is convertible
into, or exchangeable for, Capital Stock).
"Euroclear" means Xxxxxx Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer which may be made by the Company pursuant
to the Registration Rights Agreement to exchange Series A Notes for the Series B
Notes.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than the Credit Facilities and the Outstanding Notes) in
existence on the date of this Indenture, until such amounts are repaid.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated Cash Flow to
Consolidated Fixed Charges.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of this Indenture.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, in the form of
Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv),
2.06(d)(ii) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii),
which is required to be placed on all Global Notes issued under this Indenture.
"Guarantee" means, individually and collectively, the guarantees given by
the Guarantors pursuant to Article 10 hereof, including a notation in the
Securities substantially in the form attached hereto as Exhibit A-1.
"Guarantee Date" means the date upon which a Guarantor executes a
Guarantee.
"Guarantor" means each domestic Restricted Subsidiary of the Company (or
successor of such Restricted Subsidiary) which executes a Guarantee.
"Holder" means a Person in whose name a Security is registered.
6
"IAI Global Note" means the global Note in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited
with or on behalf of and registered in the name of the Depositary or its nominee
that will be issued in a denomination equal to the outstanding principal amount
of the Notes sold to Institutional Accredited Investors.
"Indebtedness" of any Person means any indebtedness, contingent or
otherwise, 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), or evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement obligations with respect thereto) or
representing the balance deferred and unpaid of the purchase price of any
property (including pursuant to financing leases), if and to the extent any of
the foregoing indebtedness would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP (except that any such balance that
constitutes a trade payable and/or an accrued liability arising in the ordinary
course of business shall not be considered Indebtedness), and shall also
include, to the extent not otherwise included, any Capital Lease Obligations,
the maximum fixed repurchase price of any Redeemable Stock, indebtedness secured
by a Lien to which the property or assets owned or held by such Person is
subject, whether or not the obligations secured thereby shall have been assumed,
guarantees of items that would be included within this definition to the extent
of such guarantees (exclusive of whether such items would appear upon such
balance sheet), and net liabilities in respect of Currency Agreements and
Interest Rate Agreements. For purposes of the preceding sentence, the maximum
fixed repurchase price of any Redeemable Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock as if such Redeemable Stock were repurchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Indenture, provided that if such Redeemable Stock is not then permitted to be
repurchased, the repurchase price shall be the book value of such Redeemable
Stock. The amount of Indebtedness of any Person at any date shall be without
duplication (i) the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any such contingent
obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the Indebtedness
secured. For the purpose of determining the aggregate Indebtedness of the
Company and its Restricted Subsidiaries, such Indebtedness shall exclude (a) the
Indebtedness of any Unrestricted Subsidiary of the Company or any Unrestricted
Subsidiary of a Restricted Subsidiary and (b) with respect to any Partially
Owned Restricted Subsidiary, the Pro Rata Portion of any Indebtedness of any
Partially Owned Restricted Subsidiary of the Company or any Partially Owned
Restricted Subsidiary of a Restricted Subsidiary pursuant to which the lender
thereunder does not have recourse to any of the assets of the Company or any of
its Restricted Subsidiaries.
"Indenture" means this Indenture as amended from time to time.
"Indirect Participant" means a Person who holds a beneficial interest in a
Global Note through a Participant.
"Initial Purchaser" means Salomon Brothers Inc or Xxxxxx Xxxxxxx & Co.
Incorporated.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Interest Expense" means, with respect to any Person, for any period, the
aggregate amount of interest in respect of Indebtedness (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and the net cost (benefit)
associated with Interest Rate Agreements, and excluding amortization of deferred
finance fees and interest recorded as accretion in the carrying value of
liabilities (other than Indebtedness) recorded at a discounted value) and all
but the principal component of rentals in respect of Capital Lease Obligations,
paid, accrued or scheduled to be paid or accrued by such Person during such
period.
"Interest Payment Date" has the meaning assigned to such term in the
Securities.
"Interest Rate Agreements" means the obligations of any Person pursuant to
any interest rate swap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect such Person or any of its
subsidiaries against fluctuations in interest rates.
7
"Investment" means any direct or indirect advance, loan (other than
advances to customers in the ordinary course of business, which are recorded as
accounts receivable on the balance sheet of any Person or its Subsidiaries) or
other extension of credit or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services for
the account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other securities issued by any other Person. For the
purposes of Sections 4.07 and 4.14 hereof, (i) "Investment" shall include and be
valued at the fair market value of the net assets of any Restricted Subsidiary
at the time that such Restricted Subsidiary is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the net assets of any
Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary and (ii) any property transferred to or from
an Unrestricted Subsidiary shall be valued at fair market value at the time of
such transfer, in each case as determined by the Board of Directors of the
Company in good faith.
"KKR" means Kohlberg Kravis Xxxxxxx & Co., L.P.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give any security interest in and any filing or other agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Liquidated Damages" means, with respect to any Securities, all unpaid
liquidated damages owing by the Company pursuant to Section 5 of the
Registration Rights Agreement for such Securities.
"Net Cash Flow Unrestricted Subsidiary" means an Unrestricted Subsidiary
which is not a Restricted Payment Unrestricted Subsidiary.
"Net Proceeds" means, with respect to any Asset Sale, the aggregate cash
proceeds (including any cash received by way of deferred payment pursuant to a
note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, and including any
amounts received as disbursement or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Subsidiaries in respect of such Asset Sale, net of (i) the cash expenses of such
sale (including, without limitation, the payment of principal, premium, if any,
and interest on Indebtedness required to be paid as a result of such Asset Sale
(other than the Securities and amounts repaid pursuant to the Credit Facilities)
and legal, accounting and investment banking fees and sales commissions), (ii)
taxes paid or payable as a result thereof, (iii) any portion of cash proceeds
which the Company determines in good faith should be reserved for post-closing
adjustments, it being understood and agreed that on the day that all such
post-closing adjustments have been determined, the amount (if any) by which the
reserved amount in respect of such Asset Sale exceeds the actual post-closing
adjustments payable by the Company or any of its Subsidiaries shall constitute
Net Proceeds on such date and (iv) any relocation expenses and pension,
severance and shutdown costs incurred as a result thereof.
"New Credit Facility" means the $150 million credit facility with The
Chase Manhattan Bank, The Bank of New York, Bankers Trust Company and The Bank
of Nova Scotia, as agents.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers" means the President, the Treasurer, any Assistant Treasurer,
Controller, Secretary or any Vice President of the Company or any Guarantor, as
applicable.
9
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the Company's chief executive officer, chief financial officer or
controller financial accounting.
"Opinion of Counsel" means a written opinion prepared in accordance with
Section 11.05 hereof and acceptable in form and substance to the Trustee, from
legal counsel who is acceptable to the Trustee. The counsel may be an employee
of or counsel to the Company or any Guarantor, if applicable, or the Trustee.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Outstanding Notes" means the 10 1/4% Senior Notes due 2004 and the 8 1/2%
Senior Notes due 2006, as each may be amended, supplemented or otherwise
modified from time to time.
"Outstanding Note Indentures" means the Indenture, dated as of May 31,
1994, among the Company, the guarantors listed therein and Bankers Trust
Company, as trustee, relating to the 10 1/4% Senior Notes due 2004, and the
Indenture, dated as of January 24, 1996, among the Company, the guarantors
listed therein and The Bank of New York, as trustee, relating to the 8 1/2%
Senior Notes due 2006, as each may be amended, supplemented or otherwise
modified from time to time.
"Partially Owned Restricted Subsidiary" means any Restricted Subsidiary
other than a wholly-owned Restricted Subsidiary.
"Participant" means, with respect to the Depositary, Euroclear or Cedel, a
Person who has an account with the Depositary, Euroclear or Cedel, respectively
(and, with respect to The Depository Trust Company, shall include Euroclear and
Cedel).
"Participating Broker-Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (ii) statutory Liens of landlords and carriers',
warehousemen's, mechanics', suppliers', materialmen's, repairmen's, or other
like Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor; (iii) Liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; (iv) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (v) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
business of the Company or any of its Subsidiaries incurred in the ordinary
course of business; (vi) Liens (including extensions and renewals thereof) upon
real or tangible personal property acquired after the date of this Indenture,
provided that (a) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including the cost of construction) of the item of property subject thereto,
(b) the principal amount of the Indebtedness secured by such Lien does not
exceed 100% of such cost, (c) such Lien does not extend to or cover any other
property other than such item of property and any improvements on such item and
(d) the incurrence of such Indebtedness is permitted by Section 4.09 hereof;
(vii) Liens securing reimbursement obligations with respect to letters of credit
which encumber documents and other property relating to such letters of credit
and the products and proceeds thereof; (viii) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (ix) judgment and attachment
Liens not giving rise to an Event of Default; (x) leases or subleases granted to
others not interfering in any material respect with the business of the Company
or any of its Subsidiaries; (xi) Liens encumbering customary initial deposits
and margin deposits, and other Liens incurred in the ordinary course of business
and which are within the general parameters customary in the industry, in each
case securing Indebtedness
9
under Interest Rate Agreements and Currency Agreements; (xii) Liens encumbering
deposits made to secure obligations arising from statutory, regulatory,
contractual or warranty requirements of the Company or its Subsidiaries; (xiii)
Liens arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or any of its Subsidiaries in the ordinary course of
business of the Company and its Subsidiaries; (xiv) any interest or title of a
lessor in the property subject to any Capital Lease Obligation or operating
lease; (xv) Liens arising from filing Uniform Commercial Code financing
statements regarding leases; (xvi) Liens permitted by the Credit Facilities as
in effect on the date of this Indenture; (xvii) Liens securing Indebtedness
described in clause (xii) of the second paragraph of Section 4.09 hereof;
(xviii) Liens between the Company and any Restricted Subsidiary or between
Restricted Subsidiaries; (xix) Liens securing letters of credit in an amount not
to exceed $75 million in the aggregate at any one time; (xx) Liens in an amount
not to exceed $50 million in the aggregate at any one time and (xxi) Liens
incurred by Partially Owned Restricted Subsidiaries which do not exceed 10% of
Total Assets in the aggregate at any one time.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Pro Rata Portion" means, with respect to any Partially Owned Restricted
Subsidiary, the percentage of such Partially Owned Restricted Subsidiary's
outstanding Equity Interests beneficially owned by the Company and its
Restricted Subsidiaries.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redeemable Stock" means any Equity Interest which, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable before the stated maturity of the Securities), or upon the
happening of any event, matures or is mandatorily redeemable, in whole or in
part, prior to the stated maturity of the Securities, or is, by its terms or
upon the happening of any event, redeemable at the option of the holder thereof,
in whole or in part, at any time prior to the stated maturity of the Securities
except for Equity Interests of the Company issued to present and former members
of management of the Company and its Subsidiaries pursuant to subscription and
option agreements in effect on the date hereof and common stock and options of
the Company issued to future members of management of the Company and its
Subsidiaries pursuant to subscription agreements executed subsequent to the date
hereof containing provisions for the repurchase of such common stock and options
upon death, disability or termination of employment of such persons which are
substantially identical to those contained in the subscription agreements in
effect on the date hereof; provided that for purposes of Section 4.07 hereof and
that for purposes of the definition of Indebtedness, Redeemable Stock does not
include the Series B Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock and the Series G Preferred Stock.
"Registration Rights Agreement" means the Registration Rights Agreement
dated February 17, 1998, between the Initial Purchasers, the Company and the
subsidiaries of the Company listed on the signature page thereto, as such
agreement may be amended, modified or supplemented from time to time.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
"Responsible Officer" means, when used with respect to the Trustee, any
officer within the Corporate Trust and Agency Group (or any successor group
thereto) of the Trustee, including any Vice President, Assistant Vice President,
Secretary, Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and, with respect to a particular matter, any other officer to whom
such matter is referred because of such officer's knowledge and familiarity with
the particular subject.
10
"Restricted Definitive Note" means a Definitive Note bearing the Private
Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private Placement
Legend.
"Restricted Payment Unrestricted Subsidiary" means an Unrestricted
Subsidiary which was capitalized exclusively with a permitted Restricted Payment
or the proceeds from the issuance of an Equity Interest by the Company or with
the proceeds of the sale of stock or substantially all of the assets of any
other Unrestricted Subsidiary which was capitalized with such funds to the
extent that a liquidating dividend is paid to the Company or any Restricted
Subsidiary from the proceeds of such sale.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" means, for the purposes of this Indenture, a
Subsidiary of the Company which at the time of determination is not an
Unrestricted Subsidiary. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that immediately after giving
effect to such designation, the Company could incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.09 hereof, on a pro
forma basis taking into account such designation.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Series D Preferred Stock" means the Company's $10.00 Series D
Exchangeable Preferred Stock Redeemable 2008, par value $.01 per share.
"Series E Preferred Stock" means the Company's $9.20 Series E Exchangeable
Preferred Stock Redeemable 2009, par value $.01 per share.
"Series F Preferred Stock" means the Company's $9.20 Series F Exchangeable
Preferred Stock Redeemable 2009, issuable in exchange for the Series E Preferred
Stock and containing terms identical to the Series E Preferred Stock.
"Series G Preferred Stock" means the Company's $8.625 Series G
Exchangeable Preferred Stock Redeemable 2010, par value $.01 per share.
"Series H Preferred Stock" means the Company's $8.625 Series H
Exchangeable Preferred Stock Redeemable 2010 issuable in exchange for the Series
G Preferred Stock and containing terms identical to the Series G Preferred
Stock.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in the Registration Rights Agreement.
11
"Subordinated Debentures" means the Company's 10% Class D Subordinated
Exchange Debentures due 2008, the 9.20% Class E Subordinated Exchange Debentures
due 2009, the 9.20% Class F Subordinated Exchange Debentures due 2009, the 8e%
Class G Subordinated Exchange Debentures due 2010, and the 8e% Class H
Subordinated Exchange Debentures due 2010.
"Subsidiary" of any Person means any corporation, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more of
the other Subsidiaries of such Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. xx.xx.
77aaa-77bbbb).
"Total Assets" means the total consolidated assets of the Company and its
Restricted Subsidiaries.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.06(b) hereof.
"Transfers" means (i) any payment of interest on Indebtedness, dividends
or repayments of loans or advances and (ii) any other transfers of assets, in
each case from an Unrestricted Subsidiary to the Company or any of its
Restricted Subsidiaries.
"Treasury Rate" means, for the purposes of this Indenture, the yield to
maturity at the time of computation of United States Treasury securities with a
constant maturity (as compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (519) which has become publicly available at
least two Business Days prior to the date fixed for prepayment (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the then remaining Average Life of
the Securities; provided that if the Average Life of the Securities is not equal
to the constant maturity of a United States 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 a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the Average Life of the Securities is less than one year,
the weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes that do
not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form of
Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means, for the purposes of this Indenture, (i)
any Subsidiary of the Company which at the time of determination is an
Unrestricted Subsidiary (as designated by the Board of Directors, as provided
below) and (ii) any subsidiary of an Unrestricted Subsidiary. The Board of
Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns, or holds any Lien on, any
property of, any other Subsidiary of the Company which is not a Subsidiary of
the Subsidiary to be so designated; provided that (a) the Company certifies that
such designation complies with Section 4.07 and 4.14 hereof, and (b) the
Subsidiary to be so designated has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided that immediately
12
after giving effect to such designation, the Company could incur at least $1.00
of additional Indebtedness pursuant to the first paragraph of Section 4.09
hereof, on a pro forma basis taking into account such designation.
"U.S. Government Obligations" means direct noncallable obligations of or
guaranteed by the United States of America.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under the
Securities Act.
"Working Capital" means, with respect to any Person for any period, the
current assets of such Person and its Subsidiaries (and in the case of the
Company and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries
and, in the case of Partially Owned Restricted Subsidiaries, including only the
Pro Rata Portion thereof) on a consolidated basis, after excluding therefrom
cash and cash equivalents and deferred income taxes, less the current
liabilities of such person and its Subsidiaries (and in the case of the Company
and its Restricted Subsidiaries, excluding Unrestricted Subsidiaries and, in the
case of Partially Owned Restricted Subsidiaries, including only the Pro Rata
Portion thereof) on a consolidated basis, after excluding therefrom, in each
case to the extent otherwise included therein, all short-term Indebtedness for
borrowed money, the current portion of any long-term Indebtedness, liabilities
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn
against insufficient funds in the ordinary course of business, provided that
such liabilities are extinguished within three business days of this incurrence,
and deferred income taxes of such Person and its Subsidiaries (and in the case
of the Company and its Restricted Subsidiaries, excluding Unrestricted
Subsidiaries and, in the case of Partially Owned Restricted Subsidiaries,
including only the Pro Rata Portion thereof).
SECTION 1.02 OTHER DEFINITIONS
Defined in
Term Section
---- -------
"Affiliate Transaction".......................................... 4.12
"Change of Control Offer"........................................ 4.10
"Change of Control Payment"...................................... 4.10
"Change of Control Payment Date"................................. 4.10(2)
"Event of Default"............................................... 6.01
"Legal Holiday".................................................. 11.07
"Paying Agent"................................................... 2.03
"Registrar"...................................................... 2.03
"Refinancing Indebtedness"....................................... 4.09
"Restricted Payments"............................................ 4.07
"Retired Capital Stock".......................................... 4.07
"Refunding Capital Stock"........................................ 4.07
"Successor"...................................................... 5.01(i)
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities and the Guarantees.
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
13
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Company, any other obligor upon the
Securities or any successor obligor upon the Securities or any Guarantor.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04 RULES OF CONSTRUCTION
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural include
the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01 FORM AND DATING
(a)General. The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby. However, to the
extent any provision of any Note conflicts with the express provisions of this
Indenture, the provisions of this Indenture shall govern and be controlling.
(b)Global Notes. Notes issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Note Legend thereon and
the "Schedule of Exchanges of Interests in the Global Note" attached thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without the Global Note Legend thereon and without the
"Schedule of Exchanges of Interests in the Global Note" attached thereto). Each
Global Note shall represent such of the outstanding Notes as shall be specified
therein and each shall provide that it shall represent the aggregate principal
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from
time to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
14
(c)Euroclear and Cedel Procedures Applicable. The provisions of the
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel Bank shall be applicable to transfers of
beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION
One Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and may be in
facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by two
Officers (an "Authentication Order"), authenticate Notes for original issue.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee shall serve as Paying Agent for the Notes.
15
SECTION 2.05. HOLDER LISTS
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE
(a)Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global
Notes will be exchanged by the Company for Definitive Notes if (i) the
Company delivers to the Trustee notice from the Depositary that it is
unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either
case, a successor Depositary is not appointed by the Company within 90
days after the date of such notice from the Depositary or (ii) the Company
in its sole discretion determines that the Global Notes (in whole but not
in part) should be exchanged for Definitive Notes and delivers a written
notice to such effect to the Trustee. Upon the occurrence of either of the
preceding events in (i) or (ii) above, Definitive Notes shall be issued in
such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections
2.07 and 2.11 hereof. Every Security authenticated and delivered in
exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.11 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may
not be exchanged for another Security other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f)
hereof.
(b)Transfer and Exchange of Beneficial Interests in the Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Notes also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs as
applicable:
(i)Transfer of Beneficial Interests in the Same Global Note. Beneficial
interests in any Restricted Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth
in the Private Placement Legend; provided, that prior to the expiration of
the Restricted Period transfers of beneficial interests in the Regulation S
Global Note may not be made to a U.S. Person or for the account or benefit of
a U.S. Person (other than an Initial Purchaser). Beneficial interests in any
Unrestricted Global Note may be transferred only to Persons who take delivery
thereof in the form of a beneficial interest in an Unrestricted Global Note.
No written orders or instructions shall be required to be delivered to the
Registrar to effect the transfers described in this Section 2.06(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Notes. In connection with all transfers and exchanges of beneficial interests
(other than a transfer of a beneficial interest in a Global Note to a Person
who takes delivery thereof in the form of a beneficial interest in the same
Global Note), the transferor of such beneficial interest must deliver to the
Registrar either (A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions given
in accordance with the Applicable Procedures containing information regarding
the Participant account to be credited with such increase or (B) (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the
Depositary
16
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the transfer or
exchange referred to in (1) above; provided, that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial
interests in the Regulation S Global Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903 under the Securities Act. Upon an Exchange
Offer by the Company in accordance with Section 2.06(f) hereof, the
requirements of this Section 2.06(b)(ii) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions conta4ined in the
Letter of Transmittal delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of the requirements for
transfer or exchange of beneficial interests in Global Notes contained in
this Indenture, the Securities and otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements
of clause (ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a beneficial
interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications
in item (1) thereof; and
(B) if the transferee will take delivery in the form of a beneficial
interest in the Regulation S Global Note, then the transferor must deliver
a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof;
(C) if the transferee will take delivery in the form of a beneficial
interest in the IAI Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications
and certificates and Opinion of Counsel required by item (3) thereof, if
applicable, and the tansferee must deliver a certificate in the form of
Exhibit D hereto.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global
Note for Beneficial Interests in the Unrestricted Global Note. A beneficial
interest in any Restricted Global Note may be exchanged by any holder thereof
for a beneficial interest in an Unrestricted Global Note or transferred to a
Person who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with the
requirements of clause (ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of the beneficial interest to be transferred, in the case of an exchange,
or the transferee, in the case of a transfer, is not (1) a broker-dealer,
(2) a Person participating in the distribution of the Securities or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item (1)(a)
thereof;
17
(2)if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof; and
(3)in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Registrar to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note or to
transfer such beneficial interest to a Person who takes delivery thereof in the
form of a Definitive Note, then, upon receipt by the Registrar of the following
documentation:
(A) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Definitive Note,
a certificate from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable, and a
certificate in the form of Exhibit D hereto;
(F) if such beneficial interest is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
18
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from
the Depositary and the Participant or Indirect Participant. The Trustee
shall make available for delivery such Definitive Notes to the Persons in
whose names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall
be subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global
Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement
Legend, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in the form of a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest in
an Unrestricted Global Note proposes to exchange such beneficial interest
for a Definitive Note or to transfer such beneficial interest to a Person
who takes delivery thereof in the form of a Definitive Note, then, upon
satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof,
the Trustee shall cause the aggregate principal amount of the applicable
Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof,
and the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note
issued in exchange for a beneficial interest pursuant to this Section
2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
make available for delivery
19
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this section 2.06(c)(iii) shall not bear the Private
Placement Legend. A beneficial interest in an Unrestricted Global Note
cannot be exchanged for a Definitive Note bearing the Private Placement
Legend or transferred to a Person who takes delivery thereof in the form
of a Definitive Note bearing the Private Placement Legend.
(d)Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i)Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Definitive Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (2)(b) thereof;
(B) if such Definitive Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such Definitive Note is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Definitive Note is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(b) thereof;
(F) if such Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof; or
(G) if such Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration
requirements of the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, and a certificate in the
form of Exhibit D hereto,
the Trustee shall cancel the Definitive Note, increase or cause to be increased
the aggregate principal amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the 144A
Global Note, in the case of clause (C) above, the Regulation S Global Note and
in the case of clause (G) above, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
20
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1)if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(c) thereof;
(2)if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof; and
(3)in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the Securities
Act, that the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act, and such Definitive Notes are being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and
increase or cause to be increased the aggregate principal amount of the
Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global Note
or transfer such Definitive Notes to a Person who takes delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note at any time.
Upon receipt of a request for such an exchange or transfer, the Trustee shall
cancel the applicable Unrestricted Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the Unrestricted Global
Notes.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
beneficial interests transferred pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above.
(e)Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Restricted
Definitive Notes may be transferred to and registered in the name of Persons
who take delivery thereof if the Registrar receives the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
21
(B) if the transfer will be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof;
(C) if the transfer will be made pursuant to an exemption from the
registration requirements of the Securities Act to an Institutional
Accredited Investor, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications and certificates
and Opinion of Counsel required by item (3) thereof, if applicable, and
the transferee must deliver a certificate in the form of Exhibit D hereto;
and
(D) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver (x) a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any
Restricted Definitive Note may be exchanged by the Holder thereof for an
Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
is not (1) a broker-dealer, (2) a Person participating in the distribution
of the Exchange Notes or (3) a Person who is an affiliate (as defined in
Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Participating Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with
the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1)if the Holder of such Restricted Definitive Notes proposes
to exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof;
(2)if the Holder of such Restricted Definitive Notes proposes
to transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in item (4)
thereof; and
(3)in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company to the
effect that such exchange or transfer is in compliance with the Securities
Act, that the restrictions on transfer contained herein and in the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act, and such Restricted Definitive Note is being exchanged or
transferred in compliance with any applicable blue sky securities laws of
any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such Notes to
a Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request for such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions from
the Holder thereof. Unrestricted Definitive Notes cannot be exchanged for or
transferred to Persons who take delivery thereof in the form of a Restricted
Definitive Note.
22
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an authentication order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by persons that
are not (x) broker-dealers, (y) Persons participating in the distribution of the
Exchange Notes or (z) Persons who are affiliates (as defined in Rule 144) of the
Company and accepted for exchange in the Exchange Offer and (ii) Definitive
Notes in an aggregate principal amount equal to the principal amount of the
Restricted Definitive Notes accepted for exchange in the Exchange Offer.
Concurrent with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company shall execute and the Trustee shall
authenticate and make available for delivery to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the appropriate
principal amount.
(g) Legends. The following legends shall appear on the face of all Global
Notes and Definitive Notes issued under this Indenture unless specifically
stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (b) below, each Global Note
and each Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear the legend in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR
REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii),
(d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the
Private Placement Legend.
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(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE Trustee MAY MAKE SUCH NOTATIONS HEREON
AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS
GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION
2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND
(IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH
THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee or by the Depositary at the direction of the Trustee, to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note, by the Trustee or by the
Depositary at the direction of the Trustee, to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Global Notes and Definitive Notes
upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a beneficial interest
in a Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections
2.10, 3.06, 4.08, and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of or
exchange any Security selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any registration of
transfer or exchange of Global Notes or Definitive Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Global Notes or Definitive Notes
surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Securities during a period beginning at the
opening of business 15 days before the day of mailing of a notice of
redemption under Section 3.02 hereof and ending at the close of business on
the day of selection, (B) to register the transfer of or to exchange any
Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part or (C) to register
the transfer of or to exchange a Security between a record date and the next
succeeding Interest Payment Date.
(vi) Prior to due presentment for the registration of a transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and interest on
such Securities and for all other purposes, and none of the Trustee, any
Agent or the Company shall be affected by notice to the contrary.
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(vii) The Trustee shall authenticate Global Notes and Definitive Notes in
accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel required
to be submitted to the Registrar pursuant to this Section 2.06 to effect a
transfer or exchange may be submitted by facsimile.
SECTION 2.07. REPLACEMENT NOTES
If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES .
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES .
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES .
Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may
25
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION .
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation. The Company may not
issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST .
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13 CUSIP NUMBERS
The Company in issuing the Notes 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 Notes or as contained in any notice of redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, 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 3
OPTIONAL REDEMPTION AND
OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
SECTION 3.01 NOTICES TO TRUSTEE
(a) If the Company elects to redeem Securities pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth that such redemption shall occur pursuant to
Section 3.07 hereof and setting forth the redemption date, the principal amount
of Securities to be redeemed and the redemption price.
(b) If the Company elects to redeem Securities pursuant to the provisions
of Section 3.08 hereof, it shall furnish to the Trustee, at least 45 days but
not more than 60 days before the redemption date, an Officers' Certificate
setting forth that a Change of Control has occurred and the date of such Change
of Control and that such redemption shall occur pursuant to Section 3.08 hereof,
and further setting forth the principal amount of Securities to be redeemed, the
redemption price of such Securities and the intended redemption date.
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SECTION 3.02 SELECTION OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any time,
selection of the Securities for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Securities are listed, or, if the Securities are not listed
on a national securities exchange, on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate; provided that no Security in
denominations of $1,000 or less shall be redeemed in part. The Trustee may
select for redemption any portion (equal to $1,000 or any integral multiple
thereof) of the principal of Securities that have denominations larger than
$1,000. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption.
The Trustee shall promptly notify the Company 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. The particular
Securities to be redeemed shall be selected, unless otherwise provided herein,
not less than 30 nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Securities not previously called for redemption.
SECTION 3.03 NOTICES TO HOLDERS
(a) If the Company elects to redeem Securities pursuant to either of
Section 3.07 or 3.08 hereof, notice of redemption shall be mailed by first class
mail at least 30 days but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at its registered address.
The notice shall identify the Securities to be redeemed (including CUSIP
number) and shall state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that,
after the redemption date, upon surrender of such Security, a
new Security or Securities in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent at the address specified in such notice to
collect the redemption price;
(6) that interest on Securities or portions of them called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities are being redeemed; and
(8) the aggregate principal amount of Securities that are being
redeemed.
(b) At the Company's timely request, the Trustee shall give the notice
required in Section 3.03(a) hereof above in the Company's name and at its
expense and setting forth the information to be stated in such notice as
provided in Section 3.03(a) hereof.
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SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION
Once notice of redemption is mailed (after the Trustee has received the
notice provided for in Section 3.01 hereof), Securities called for redemption
become due and payable on the redemption date at the redemption price and shall
cease to bear interest from and after the redemption date (unless the Company
shall fail to make payment of the redemption price or accrued interest on the
redemption date). Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price, plus premium and Liquidated Damages, if any, plus
accrued interest, if any, to the redemption date, but interest installments
whose maturity is on the redemption date and Liquidated Damages which become
payable on the redemption date will be payable to the Holder of record at the
close of business on the relevant record dates referred to in the Securities.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE OR PURCHASE PRICE
Prior to 10:00 a.m. on the redemption date, the Company shall deposit with
the Trustee or with the Paying Agent money (in same-day funds) sufficient to pay
the redemption price of, premium and Liquidated Damages, if any, and accrued
interest on, all Securities to be redeemed on that date other than Securities or
portions thereof called for redemption on that date which previously have been
delivered by the Company to the Trustee for cancellation. The Trustee or the
Paying Agent shall return to the Company any such money not required for that
purpose.
If the Company complies with the preceding paragraph, interest on the
Securities or portions thereof to be redeemed, whether or not such Securities
are presented for payment, will cease to accrue on the applicable redemption
date. If any Security called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Company to comply with the
preceding paragraph, then interest will be paid on the unpaid principal from the
redemption date until such principal is paid and on any interest not paid on
such unpaid principal, in each case, at the rate provided in the Securities and
in Section 4.01 hereof.
SECTION 3.06 SECURITIES REDEEMED IN PART
Upon surrender of a Security that is redeemed in part, the Company shall
issue and the Trustee, upon the written order of the Company, shall authenticate
for the Holder at the expense of the Company a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
SECTION 3.07 OPTIONAL REDEMPTION
The Company may redeem all or any of the Securities, in whole or in part,
at any time on or after April 1, 2003 at the redemption prices (expressed as
percentages of the principal amount) set forth in the immediately succeeding
paragraph, plus accrued and unpaid interest thereon to the applicable redemption
date.
The redemption price as a percentage of the principal amount shall be as
follows, if the Securities are redeemed during the twelve-month period beginning
April 1 of the year indicated below:
Year Percentage
---- ----------
2003 103.813%
2004 102.542%
2005 101.271%
2006 and thereafter 100.000%
Notwithstanding the foregoing, upon the occurrence at any time of a Change
in Control, the Securities will be redeemable, at the option of the Company, in
whole or in part, pursuant to the provisions of Section 3.08 hereof.
28
Any redemption pursuant to this Section 3.07 shall be made, to the extent
applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.08 OPTIONAL REDEMPTION UPON CHANGE OF CONTROL
In addition to any redemption pursuant to Section 3.07 hereof, the
Securities will be redeemable, at the option of the Holders, in whole or in
part, at any time within 160 days after a Change of Control upon not less than
30 nor more than 60 days' prior notice to the Company of Securities to be
redeemed, at a redemption price equal to the sum of (i) the then outstanding
principal amount of the Securities being redeemed plus Liquidated Damages for
such Securities, if any, plus (ii) accrued and unpaid interest, if any, to the
redemption date plus (iii) the Applicable Premium.
Any redemption pursuant to this Section 3.08 shall be made, to the extent
applicable, pursuant to the provisions of Sections 3.01 through 3.06 hereof.
SECTION 3.09 SINKING FUND
The Securities will not be entitled to any sinking fund payments.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF SECURITIES
The Company shall pay the principal of and interest on the Securities on
the dates and in the manner provided in the Securities, and shall pay Liquidated
Damages, if any, on the dates and in the manner provided in the Registration
Rights Agreement. Principal and interest shall be considered paid on the date
due if the Paying Agent, other than the Company or a Subsidiary of the Company,
holds on that date money deposited by the Company in available funds and
designated for and sufficient to pay all principal and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
at the same rate per annum on the Securities to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY
The Company shall maintain, in the Borough of Manhattan, The City of New
York, an office or agency (which may be an office of the Trustee or the
Registrar) where Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.
The Company 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 of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
29
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03 hereof.
SECTION 4.03 SEC REPORTS; FINANCIAL STATEMENTS
(a) The Company and the Guarantors shall file with the Trustee, within 15
days after it files the same with the SEC, copies of the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that the
Company and/or the Guarantors are required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. If the Company is not subject to the
requirements of such Section 13 or 15(d), the Company shall file with the
Trustee, within 15 days after it would have been required to file the same with
the SEC, financial statements, including any notes thereto (and with respect to
annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," both comparable to that which the Company would have
been required to include in such annual reports, information, documents or other
reports if the Company had been subject to the requirements of such Section 13
or 15(d). Any Guarantor not required to file with the SEC pursuant to Section 13
or 15(d) of the Exchange Act shall not be required to file such reports with the
SEC or Trustee. The Company and the Guarantors shall also comply with the other
provisions of TIA ss.314(a).
(b) If the Company is required to furnish annual or quarterly reports to
its stockholders pursuant to the Exchange Act, the Company shall cause any
annual report furnished to its stockholders generally and any quarterly or other
financial reports furnished by it to its stockholders generally to be filed with
the Trustee and mailed to the Holders at their addresses appearing in the
register of Securities maintained by the Registrar. If the Company is not
required to furnish annual or quarterly reports to its stockholders pursuant to
the Exchange Act, so long as at least 5% of the original principal amount of the
Securities remain outstanding, the Company shall cause its financial statements
referred to in Section 4.03(a) hereof, including any notes thereto (and with
respect to annual reports, an auditors' report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" to be so mailed to the Holders within 90 days after
the end of each of the Company's fiscal years and within 60 days after the end
of each of the Company's first three fiscal quarters. The Company will cause to
be disclosed in a statement accompanying any annual report or comparable
information as of the date of the most recent financial statements in each such
report or comparable information the amount available for payments pursuant to
Section 4.07 hereof. As of the date hereof, the Company's fiscal year ends on
December 31. Any Guarantor not required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act shall not be required to file such reports with
the SEC or Trustee.
SECTION 4.04 COMPLIANCE CERTIFICATE
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries 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, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge and what action the
Company is taking or proposes to take with respect thereto) and that to the best
of his knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the
Securities are prohibited or, if such event has occurred, a description of the
event and what action the Company is taking or proposes to take with respect
thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 hereof shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Articles 4 or 5 of this Indenture or, if any such violation
has occurred, specifying the nature and period of existence
30
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Securities are outstanding,
(i) deliver to the Trustee, forthwith upon any Officer becoming aware of any
Default or Event of Default under this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto and (ii) promptly notify the
Trustee of any Change of Control.
SECTION 4.05 COMPLIANCE WITH LAWS, TAXES
The Company shall, and shall cause each of its Subsidiaries to, comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, noncompliance with which would materially adversely affect
the business, earnings, properties, assets or condition, financial or otherwise,
of the Company and its Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Subsidiaries to, pay prior
to delinquency all taxes, assessments, and governmental levies except as
contested in good faith and by appropriate proceedings.
SECTION 4.06 STAY, EXTENSION AND USURY LAWS
The Company 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, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the Company's
obligation to pay the Securities; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
insofar as such law applies to the Securities, and covenants that it shall not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.07 LIMITATIONS ON RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Capital Stock or other Equity Interests (other than (A) dividends
or distributions payable in Equity Interests (other than Redeemable Stock) of
the Company or such Restricted Subsidiary or (B) dividends or distributions
payable to the Company or any of its Restricted Subsidiaries), (ii) (A)
voluntarily purchase, redeem or otherwise acquire or retire for value any
preferred stock of the Company or any of its Restricted Subsidiaries, which by
its terms, is exchangeable for any Indebtedness that is pari passu with or
subordinated in right of payment to the Securities or (B) purchase, redeem or
otherwise acquire or retire for value any Equity Interests (other than
Exchangeable Preferred Stock) of the Company or any of its Restricted
Subsidiaries (other than any such Equity Interests purchased from the Company or
any of its Restricted Subsidiaries), (iii) voluntarily purchase, repay, redeem,
defease (including, but not limited to, covenant or legal defeasance) or
otherwise acquire or retire for value any Indebtedness (other than (A) the
Securities, (B) Indebtedness under the Credit Facilities, (C) Indebtedness
permitted under clause (v) or (vi) of the second paragraph of Section 4.09
hereof, and any extension, refinancing, renewal, replacement, substitution or
refunding thereof permitted under clause (vii) of the second paragraph of
Section 4.09 hereof or (D) Indebtedness between and among the Company and its
Restricted Subsidiaries) that is pari passu with or subordinated in right of
payment to the Securities (other than in connection with the refunding or
refinancing of such Indebtedness) or (iv) make Investments in Restricted Payment
Unrestricted Subsidiaries (the foregoing actions set forth in clauses (i)
through (iv) being referred to as "Restricted Payments"), if, at the time of
such Restricted Payment:
(a) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(b) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.09 hereof
(without giving effect to clauses (i) through (xv) of the second paragraph
thereof), which calculation shall be made on a pro
31
forma basis deducting from Adjusted Consolidated Net Income the amount of
any Investment the Company has made in an Unrestricted Subsidiary during
the relevant period and any Investment the Company intends to make in an
Unrestricted Subsidiary, to the extent that such Investment is made with
amounts included in Adjusted Consolidated Net Income as a result of
Transfers described in clause (c)(x) of this Section 4.07 or clause (c)(y)
of Section 4.14 hereof; or
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made after May 13, 1992 exceeds the sum of the
following: (w) 50% of the amount of the Adjusted Consolidated Net Income
(other than amounts included in the next succeeding clause (c)(x)) of the
Company for the period (taken as one accounting period) from the beginning
of the first quarter commencing immediately after May 13, 1992 through the
end of the Company's fiscal quarter ending immediately prior to the time
of such Restricted Payment (or, if Adjusted Consolidated Net Income for
such period is a deficit, 100% of such deficit); plus (x) 100% of the
amount of all Transfers from a Restricted Payment Unrestricted Subsidiary
up to the aggregate amount of the Investment (after taking into account
all prior Transfers from such Restricted Payment Unrestricted Subsidiary)
in such Restricted Payment Unrestricted Subsidiary (valued in each case as
provided in the definition of "Investment"); plus (y) in the event of a
designation of a Restricted Payment Unrestricted Subsidiary as a
Restricted Subsidiary, 100% of an amount equal to the greater of (A) the
fair market value of such Subsidiary as determined by the Board of
Directors in good faith (or, if such fair market value may exceed $25.0
million, as determined in writing by an independent investment banking
firm of nationally recognized standing) at the time of the redesignation
of such Restricted Payment Unrestricted Subsidiary as a Restricted
Subsidiary and (B) the Consolidated Net Cash Flow generated by such
Subsidiary for the period (taken as one accounting period) from the
beginning of its first fiscal quarter commencing immediately after the
date of its designation as a Restricted Payment Unrestricted Subsidiary
through such Subsidiary's fiscal quarter ending immediately prior to its
designation as a Restricted Subsidiary (or if such Consolidated Net Cash
Flow for such period is a deficit, 100% of such deficit); plus (z) 100% of
the aggregate net cash proceeds received by the Company from (i) the
issuance or sale of Equity Interests of the Company (other than such
Equity Interests issued or sold to a Restricted Subsidiary of the Company
and other than Redeemable Stock) or (ii) the sale of the stock of an
Unrestricted Subsidiary or the sale of all or substantially all of the
assets of an Unrestricted Subsidiary to the extent that a liquidating
dividend is paid to the Company or any Restricted Subsidiary from the
proceeds of such sale;
provided, however, that for purposes of making Investments in Unrestricted
Subsidiaries, if the amount determined in accordance with clauses (w) or (y)
above is a deficit, such deficit shall be excluded from the computation of this
clause (c); and provided, further, that all such amounts applied pursuant to
this clause (c) shall not be available for application under clause (c) of
Section 4.14 hereof.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) (A) the retirement of any shares of the Company's Capital Stock
(the "Retired Capital Stock") either (1) in exchange for or (2) out of the net
proceeds of the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of other shares of the Company's Capital Stock (the
"Refunding Capital Stock") other than any Redeemable Stock, and (B) if
immediately prior to such retirement of such Retired Capital Stock the
declaration and payment of dividends thereon was permitted under either clause
(iii) or (vii) of this paragraph, the declaration and payment of dividends on
the Refunding Capital Stock in an aggregate amount per year no greater than the
aggregate amount of dividends per year that was declarable and payable on such
Retired Capital Stock immediately prior to such retirement; (iii) the
declaration and payment of dividends to the holders of the Series D Preferred
Stock, Series E Preferred Stock, Series F Preferred Stock and the Series G
Preferred Stock; (iv) the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company issued to present
and former members of management of the Company and its Subsidiaries pursuant to
subscription and option agreements in effect on the date hereof and Equity
Interests of the Company issued to future members of management pursuant to
subscription agreements executed subsequent to the date hereof, containing
provisions for the repurchase of such Equity Interests upon death, disability or
termination of employment of such persons which are substantially identical to
those contained in the subscription agreements in effect on the date hereof; (v)
the declaration and payment of dividends on the Company's Common Stock of up to
$25.0 million per annum plus 6% per annum of the net proceeds received at any
time by the Company from (a) the issue or sale of Common Stock or (b) (1) the
issuance of securities convertible into Common Stock (other than any such
convertible securities issued to (A) members of the Company's management or its
Board of Directors and (B) any Subsidiary of the Company) and (2) the conversion
of such convertible securities into Common Stock, in both cases at the time of
such conversion into Common Stock; (vi) the repurchase, redemption or other
acquisition or retirement for value
32
of Indebtedness of the Company which is subordinated in right of payment to the
Securities either (A) in exchange for or (B) with the proceeds of the issuance
of, Equity Interests (other than Redeemable Stock) of the Company; (vii) the
declaration and payment of dividends to holders of any class or series of the
Company's preferred stock issued after the date hereof (including, without
limitation, the declaration and payment of dividends on Refunding Capital Stock
in excess of the dividends declarable and payable thereon pursuant to clause
(ii) of this paragraph), provided that at the time of such issuance the
Company's Fixed Charge Coverage Ratio, after giving effect to such issuance,
would be greater than 1.25 to 1; (viii) the redemption, repurchase or other
acquisition or retirement for value of any Indebtedness of the Company which is
subordinated in right of payment to the Securities (A) with the proceeds of, or
in exchange for, Indebtedness incurred pursuant to clause (vii) of the second
paragraph of Section 4.09 hereof or (B) if, after giving effect to such
redemption, repurchase or retirement, the Company could incur at least $1.00 of
Indebtedness under the first paragraph of Section 4.09 hereof (without giving
effect to clauses (i) through (xv) of the second paragraph thereof); (ix) the
retirement of the Series B Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock, Series F Preferred Stock and Series G Preferred Stock in
exchange for the issuance of the Class B Subordinated Debentures, Class D
Subordinated Debentures, Class E Subordinated Debentures, Class F Subordinated
Debentures and Class G Subordinated Debentures, respectively, pursuant to the
respective certificates of designations relating thereto, (x) the purchase of
Class B Subordinated Debentures, Class D Subordinated Debentures, Class E
Subordinated Debentures, Class F Subordinated Debentures and Class G
Subordinated Debentures in accordance with the Change of Control covenants in
the Class B Debenture Indenture, the Class D Debenture Indenture, the Class E
Debenture Indenture, the Class F Debenture and the Class G Debenture Indenture,
respectively; (xi) Investments in Unrestricted Subsidiaries having an aggregate
fair market value, when taken together with all other Investments made pursuant
to this clause (xi) that are at that time outstanding, not to exceed $50.0
million at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value); (xii) the repurchase, retirement or other
acquisition for value of Equity Interests of the Company which are not held by
KKR or any of its Affiliates; provided, that (A) the aggregate Restricted
Payments made under this clause (xii) shall not exceed $75 million and (B)
immediately after giving effect to each Restricted Payment made pursuant to this
clause (xii) on a pro forma basis, the Company could incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof
and (xiii) other Restricted Payments in an aggregate amount not to exceed $25
million; provided that in determining the aggregate amount expended for
Restricted Payments in accordance with paragraph (c) above, (1) no amounts
expended under clauses (ii)(A)(1), (vi)(A), (viii) and (ix) of this paragraph
will be included, (2) 100% of the amounts expended under clauses (ii)(A)(2),
(iv), (v), (vi)(B), (vii), (x), (xi), (xii) and (xiii) of this paragraph will be
included, (3) 50% of the amounts expended under clause (iii) of this paragraph
will be included, (4) amounts expended under clause (ii)(B) of this paragraph
will be included to the extent previously included for the Retired Capital Stock
and (5) 100% of the amounts expended under clause (i) to the extent not included
under subclauses (1) through (4) of this proviso will be included. For the
purposes of determining compliance with this Section 4.07, in the event that a
Restricted Payment meets the criteria of more than one of the categories of
permitted Restricted Payments described in clauses (i) through (xiii) above or
is entitled to be incurred pursuant to the first paragraph of this Section 4.07
(including clauses (a), (b) and (c) thereof), the Company shall, in its sole
discretion, classify such Restricted Payment in any manner that complies with
the covenants described above and such Restricted Payment will be treated as
having been made pursuant to only one of such clauses or pursuant to the first
paragraph of this Section 4.07.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officer's Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 4.07 were computed, which calculations may
be based on the Company's latest available internal financial statements.
SECTION 4.08 DIVIDENDS AND PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock, or any other interest or participation in, or measured by,
its profits, owned by the Company or any of its Restricted Subsidiaries, or pay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries, (ii)
make loans or advances to the Company or any of its Restricted Subsidiaries or
(iii) transfer any of its properties or assets to the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of: (A) the terms (as in effect on the date hereof) of the
Existing Indebtedness, (B) the terms (as in effect on the date hereof) of the
Credit Facilities and the Outstanding
33
Notes and Outstanding Note Indentures, (C) the terms of Indebtedness of the
Company incurred in accordance with Section 4.09 hereof; provided that such
terms of any such Indebtedness constitute no greater encumbrance or restriction
on the ability of any Restricted Subsidiary to pay dividends or make
distributions, make loans or advances or transfer properties or assets than is
permitted by this Section 4.08, (D) the terms of this Indenture and the
Securities, (E) applicable law, (F) customary non-assignment provisions entered
into in the ordinary course of business and consistent with past practices, (G)
the terms of purchase money obligations for property acquired in the ordinary
course of business, but only to the extent that such purchase money obligations
restrict or prohibit the transfer of the property so acquired, (H) the terms of
the Class B Subordinated Debentures, the Class B Debenture Indenture, the Class
D Subordinated Debentures, the Class D Debenture Indenture, the Class E
Subordinated Debentures, the Class E Debenture Indenture, the Class F
Subordinated Debentures, the Class F Debenture Indenture, the Class G
Subordinated Debentures and the Class G Debenture Indenture, (I) any encumbrance
or restriction with respect to a Subsidiary of the Company that is not a
Subsidiary of the Company on the date of this Indenture, which encumbrance or
restriction is in existence at the time such Person becomes a Subsidiary of the
Company or is created on the date it becomes a Subsidiary of the Company, (J)
any encumbrance or restriction with respect to a Subsidiary of the Company
imposed pursuant to an agreement which has been entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of such
Subsidiary, (K) customary provisions in joint venture agreements and other
similar agreements entered into in the ordinary course of business, (L)
customary provisions contained in leases and other agreements entered into in
the ordinary course of business, (M) the terms of any Indebtedness for borrowed
money of any Partially Owned Restricted Subsidiary or (N) any encumbrance or
restriction existing under any agreement which refinances or replaces the
agreements described in clauses (A), (B), (D), (H), (K), (L) and (M), provided
that the terms and conditions of any such encumbrances or restrictions contained
in any such agreement constitute no greater encumbrance or restriction on the
ability of any Restricted Subsidiary to pay dividends or make distributions,
make loans or advances or transfer properties or assets than those under or
pursuant to the agreement evidencing the Indebtedness or obligations refinanced.
Nothing contained in this Section 4.08 shall prevent the Company or a Restricted
Subsidiary from entering into any agreement permitting or providing for the
incurrence of Liens otherwise permitted by Section 4.13 hereof.
SECTION 4.09 INCURRENCE OF INDEBTEDNESS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to any
Indebtedness unless the Company's Debt to Consolidated Cash Flow Ratio for its
four full fiscal quarters ending immediately prior to the date such additional
Indebtedness is created, incurred, issued, assumed or guaranteed would have been
no greater than 6 to 1, and such Indebtedness is not senior in right of payment
to the Securities; provided that such calculation shall give effect to (A) the
incurrence of any Indebtedness (after giving effect to the application of the
proceeds thereof) in connection with the simultaneous acquisition of any person,
business, property or assets and (B) the Consolidated Cash Flow generated by
such acquired person, business, property or assets, giving effect in each case
to such incurrence of Indebtedness, application of proceeds and Consolidated
Cash Flow as if such acquisition had occurred at the beginning of such four
quarter period. For purposes of the foregoing provision, cash flow generated by
any acquired person, business, property or asset shall be determined on the same
basis as the definition of Consolidated Cash Flow and shall be based on the
actual earnings before interest, taxes, depreciation and amortization of such
acquired person, business, property or asset during the immediately preceding
four full fiscal quarters plus (y) (i) the savings in cost of goods sold that
would have resulted during that period from the effect of using the Company's
actual costs for comparable goods and services during that period and (ii) other
savings in cost of goods sold or eliminations of selling, general and
administrative expenses as determined by the Company in good faith in its
consideration of such acquisitions and consistent with the Company's experiences
in acquisitions of similar businesses minus (z) the incremental expenses that
would be included in cost of goods sold and selling, general and administrative
expenses that would have been incurred by the Company in the operation of such
acquired person, business, property or assets during such period.
The foregoing limitations shall not apply to the incurrence of (i)
Indebtedness pursuant to the Credit Facilities (provided that the principal
amount of such Indebtedness shall not exceed $1.65 billion, less the amount of
all repayments made in respect of term loans and of all permanent commitment
reductions with respect to revolving loans (except to the extent, and only to
the extent, that any required repayments of principal in connection with such
commitment reduction are not made) made under the Credit Agreements (excluding
such repayments and commitment reductions which occur substantially
contemporaneously with a refinancing or a refunding thereof)), plus any amounts
then available under clause (vi) of this paragraph; (ii) Existing Indebtedness;
(iii) Indebtedness represented by the Outstanding
34
Notes; (iv) Indebtedness represented by the Class B Subordinated Debentures
issued in exchange for all of the outstanding Series B Preferred Stock, the
Class D Subordinated Debentures issued in exchange for all the outstanding
Series D Preferred Stock, the Class E Subordinated Debentures issued in exchange
for all the outstanding Series E Preferred Stock, the Class F Subordinated
Debentures issued in exchange for all the outstanding Series F Preferred Stock
and the Class G Subordinated Debentures issued in exchange for all the
outstanding Series G Preferred Stock; (v) Capital Lease Obligations in an
aggregate principal amount which, when aggregated with the principal amount of
all other Capital Lease Obligations then outstanding and incurred pursuant to
this clause (v) and including all Refinancing Indebtedness (as defined below)
incurred to refund, refinance or replace any other Indebtedness incurred
pursuant to this clause (v), does not exceed 5% of Total Assets; (vi)
Indebtedness in an aggregate principal amount equal to the greater of (A) $225
million in the aggregate at any one time outstanding for the Company and its
Restricted Subsidiaries or (B) Indebtedness created, incurred, issued, assumed
or guaranteed (x) by the Company at any one time outstanding not in excess of 7%
of the Consolidated Net Worth of the Company at the time of such creation,
incurrence, issuance, assumption or guarantee or (y) by any Restricted
Subsidiary of the Company at any one time outstanding not in excess of 7% of the
Consolidated Net Worth of such Restricted Subsidiary at the time of such
creation, incurrence, issuance, assumption or guarantee; (vii) Indebtedness
created, incurred, issued, assumed or guaranteed in exchange for or the proceeds
of which are used to extend, refinance, renew, replace, substitute or refund
Indebtedness referred to in clauses (i) through (vi) above, including additional
Indebtedness incurred to pay premiums and fees in connection therewith (the
"Refinancing Indebtedness"); provided, that (A) the principal amount of such
Refinancing Indebtedness shall not exceed the principal amount of Indebtedness
(including unused commitments and additional Indebtedness incurred to pay
premiums and fees in connection therewith) so extended, refinanced, renewed,
replaced, substituted or refunded plus any amounts then available under clause
(vi) of this paragraph, (B) in the case of Refinancing Indebtedness for
Indebtedness permitted under clauses (ii) and (iv) of this paragraph, the
Refinancing Indebtedness permitted under clauses (ii) and (iv) of this paragraph
shall have an Average Life equal to or greater than the Average Life of the
Indebtedness being extended, refinanced, renewed, replaced, substituted or
refunded and (C) the Refinancing Indebtedness for Indebtedness permitted under
clauses (ii) and (iv) of this paragraph shall rank, in right of payment, no more
senior than such Indebtedness being extended, refinanced, renewed, replaced,
substituted or refunded and the Refinancing Indebtedness for Indebtedness
permitted under clauses (i), (iii), (v) and (vi) of this paragraph shall rank,
in right of payment, pari passu with or junior to the Securities; (viii)
intercompany Indebtedness incurred in connection with Investments in
Unrestricted Subsidiaries; provided that such Investments are permitted by
Section 4.07 or Section 4.14 hereof; (ix) Indebtedness under Currency Agreements
and Interest Rate Agreements, provided that in the case of Currency Agreements
which relate to other Indebtedness, such Currency Agreements do not increase the
Indebtedness of the Company outstanding other than as a result of fluctuations
in foreign currency exchange rates; (x) Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any Restricted
Subsidiary of the Company pursuant to such agreements, incurred or assumed by
the acquired Subsidiary in connection with the acquisition or disposition of any
business, assets or Restricted Subsidiary of the Company, other than guarantees
or similar credit support by the Company of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Restricted Subsidiary
for the purpose of financing such acquisition; provided that the maximum
aggregate liability in respect of all such Indebtedness in the nature of such
guarantees shall at no time exceed the gross proceeds actually received from the
sale of such business, assets or Restricted Subsidiary; (xi) Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts, which will not be, and will not be deemed to be, inadvertent) drawn
against insufficient funds in the ordinary course of business, provided that
such Indebtedness is extinguished within three Business Days of its incurrence;
(xii) Indebtedness of an entity at the time it is acquired as a Restricted
Subsidiary, provided that such Indebtedness was not incurred or assumed by such
entity in connection with or in anticipation of such acquisition; (xiii)
Indebtedness between the Company and any Restricted Subsidiary; (xiv)
Non-Compete Notes, not to exceed $50.0 million in aggregate principal amount
less the amount of all principal repayments made in respect thereof; and (xv)
the Company's Obligations arising from the repurchase, redemption or other
acquisitions of Capital Stock from management investors to the extent permitted
by Section 4.07 hereof. For the purposes of determining the aggregate
Indebtedness of any referent Person, Indebtedness shall not include guarantees
by any other Person of such Indebtedness. For the purposes of determining
compliance with this Section 4.09, in the event that an item of Indebtedness
meets the criteria of more than one of the categories of permitted Indebtedness
described in clauses (i) through (xv) of this Section 4.09 or is entitled to be
incurred pursuant to the first paragraph of this Section 4.09, the Company
shall, in its sole discretion, classify such item of Indebtedness in any manner
that complies with the covenants described above and such item of Indebtedness
will be treated as having been incurred pursuant to only one of such clauses or
pursuant to the first paragraph of this Section 4.09. Accrual of interest, the
accretion of
35
accreted value and the payment of interest in the form of additional
Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes
of this Section 4.09.
SECTION 4.10 CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each Holder shall have the
right to require the repurchase of such Holder's Securities pursuant to the
offer described below (the "Change of Control Offer") at a purchase price equal
to 101% of the aggregate principal amount of such Securities plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Within 40 days following any Change of Control, the Company shall
mail a notice to each Holder stating:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.10 and that all Securities tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier
than 30 days nor later than 40 days from the date such notice is mailed (the
"Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in the payment of the Change of
Control Payment, all Securities accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date;
(5) that Holders electing to have any Securities purchased pursuant to a
Change of Control Offer will be required to surrender the Securities, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day preceding the
Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the Paying
Agent receives, not later than the close of business on the third Business
Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Securities delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Securities
purchased; and
(7) that Holders whose Securities are being purchased only in part will be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered; provided that each Holder shall tender
Securities, and each Security purchased and each such new Security issued by
the Company shall be in a principal amount of $1,000 or integral multiples
thereof.
The Change of Control Offer shall be deemed to have commenced upon mailing
of notice described in this paragraph and shall terminate 20 Business Days after
its commencement, unless a longer offering period is required by law. If the
Change of Control Payment Date is on the related interest payment date, any
accrued interest will be paid to the person in whose name a Security is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the Change
of Control Offer.
On the Change of Control Payment Date, the Company shall, to the extent
lawful, (1) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Offer, (2) deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Securities or portions
thereof so tendered and (3) deliver or cause to be delivered to the Trustee, the
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof were tendered to the Company. The Paying Agent
shall promptly mail to each Holder of Securities so accepted, payment in an
amount equal to the purchase price for such Securities, and the Trustee shall
promptly authenticate and mail to such Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered; provided that
each such new Security shall be in a principal amount of $1,000 or integral
multiples thereof.
36
The Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
SECTION 4.11 LIMITATIONS ON ASSET SALES
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale (including the
sale of any of the stock of any Subsidiary) unless at least 100% of the Net
Proceeds from such Asset Sale (or, in the case of a Partially Owned Restricted
Subsidiary, the Company's Pro Rata Portion thereof, after repayment by such
Partially Owned Restricted Subsidiary of its Indebtedness) are applied first to
repay Obligations or reduce commitments under the Credit Facilities in
accordance with the terms thereof, second to offer to redeem at par the
Outstanding Notes and third to offer to redeem at par the Securities. The
foregoing application of Net Proceeds from Asset Sales is not required in the
case of (i) sales or dispositions generating cash proceeds of less than, with
respect to the Company, its Restricted Subsidiaries, $2.5 million and (ii) sales
and dispositions as to which the Company delivers a reinvestment notice and the
proceeds are so reinvested in one or more communications, publishing,
information, education or media assets or businesses within twelve months of the
date the relevant Asset Sale is consummated. Notwithstanding the foregoing
provisions of this Section 4.11, neither the Company nor its Subsidiaries shall
be required to apply the Net Proceeds from any Asset Sale (i) to the extent that
the aggregate Net Proceeds from such Asset Sale, together with the Net Proceeds,
if any, of any other Asset Sale which have not been previously applied, are less
than $25 million or (ii) to the extent that, and for so long as, such Net
Proceeds cannot be so applied as a result of an encumbrance or restriction
permitted pursuant to Section 4.13 hereof.
(b) At least 15 days prior to the Company's mailing of a notice of a Net
Proceeds Offer, the Company shall notify the Trustee of the Company's obligation
to make such Net Proceeds Offer. Notice of a Net Proceeds Offer shall be mailed
by the Company not less than 30 Business Days nor more than 40 days before the
Net Proceeds Payment Date to the Holders of the Securities at their last
registered addresses with a copy to the Trustee and the Paying Agent. The Net
Proceeds Offer shall remain open from the time of mailing until the close of
business on the Business Day prior to the Net Proceeds Payment Date. The notice
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Net Proceeds Offer. The notice, which shall
govern the terms of the Net Proceeds Offer, shall state:
(1) that the Net Proceeds Offer is being made pursuant to this
Section 4.11 and that the Securities will be accepted for payment on a pro
rata basis (rounded down to the nearest $1,000), if necessary;
(2) the Purchase Price and the Net Proceeds Payment Date;
(3) that any Security not tendered or accepted for payment will
continue to accrue interest;
(4) that any Security accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Net Proceeds
Payment Date;
(5) that each Holder of a Security electing to have such Security
purchased pursuant to a Net Proceeds 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 Trustee at the address
specified in the notice prior to the close of business on the Business Day
prior to the Net Proceeds Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Trustee receives, not later than the close of business on the fifth
Business Day next preceding the Net Proceeds Payment Date, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Securities the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Securities
purchased; and
(7) 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.
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The Trustee shall notify the Company at the opening of business on the Net
Proceeds Payment Date as to the principal amount of each of the Securities or
portions thereof which have been surrendered to the Trustee in connection with
the Net Proceeds Offer. On the Net Proceeds Payment Date, the Company shall (i)
accept for payment on a pro rata basis (if necessary) Securities or portions
thereof tendered pursuant to the Net Proceeds Offer, (ii) deposit with the
Paying Agent money sufficient to pay the purchase price of all Securities or
portions thereof so accepted and (iii) deliver or cause to be delivered to the
Trustee all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company
and any other information that the Trustee may reasonably request in order to
make the payments required to be made on the Net Proceeds Payment Date. The
Paying Agent shall promptly mail to Holders of Securities so accepted, payment
in an amount equal to the Purchase Price, and the Trustee shall promptly
authenticate and mail to such Holders a new Security equal in principal amount
to any unpurchased portion of the Security surrendered. Any Securities not so
accepted shall be promptly mailed by the Trustee to the Holder thereof. The
Company will publicly announce the results of the Net Proceeds Offer on or as
soon as practicable after the Net Proceeds Payment Date. For purposes of this
Section 4.11, the Trustee shall act as the Paying Agent.
SECTION 4.12 TRANSACTIONS WITH AFFILIATES
Neither the Company nor any of its Restricted Subsidiaries shall make any
loan, advance, guarantee or capital contribution to, or for the benefit of, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or for the benefit of, or purchase or lease any property or assets from, or
enter into or amend any contract, agreement or understanding with, or for the
benefit of, (i) any Person (or any Affiliate of such Person) holding 10% or more
of any class of Capital Stock of the Company or any of its Restricted
Subsidiaries or (ii) any Affiliate of the Company or any of its Restricted
Subsidiaries (each an "Affiliate Transaction") involving aggregate payments or
consideration in excess of $5.0 million, unless (a) such Affiliate Transaction
is on terms that are not materially less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (b) the Company delivers to the Trustee with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution adopted by the
majority of the Board of Directors approving such Affiliate Transaction and set
forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (a) of this Section 4.12.
The foregoing restriction shall not apply to (i) the payment of an annual
fee to KKR for the rendering of management consulting and financial services to
the Company and its Restricted Subsidiaries in an aggregate amount which is
reasonable in relation thereto, (ii) the payment of transaction fees to KKR in
amounts which are in accordance with past practices for the rendering of
financial advice and services in connection with acquisitions, dispositions and
financings by the Company and its Subsidiaries, (iii) loans to officers,
directors and employees of the Company and its Subsidiaries for business or
personal purposes and other loans and advances to such officers, directors and
employees for travel, entertainment, moving and other relocation expenses made
in the ordinary course of business of the Company and its Subsidiaries, (iv) any
Restricted Payments not prohibited by Section 4.07 hereof, covenant or any
Investment not prohibited by Section 4.14 hereof, (v) transactions between or
among any of the Company and its Restricted Subsidiaries, (vi) allocation of
corporate overhead to Unrestricted Subsidiaries on a basis not materially less
favorable to the Company than such allocations to Restricted Subsidiaries or
(vii) the payment of reasonable and customary fees paid to, and indemnity
provided on behalf of, officers, directors, employees or consultants of the
Company or any Restricted Subsidiary.
SECTION 4.13 LIMITATIONS ON LIENS
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien (other than Permitted Liens) on any of its assets or any income
or profits therefrom or assign or convey any right to receive income therefrom
unless the Securities are equally and ratably secured.
SECTION 4.14 INVESTMENTS IN UNRESTRICTED SUBSIDIARIES
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, make any Investment in any Unrestricted Subsidiary, if
at the time of such Investment:
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(a)a Default or Event of Default shall have occurred and be continuing or
shall occur as a consequence thereof; or
(b)immediately before such Investment, the Company would not be permitted
to incur at least $1.00 of Indebtedness pursuant to the first paragraph of
Section 4.09 hereof (without giving effect to clauses (i) through (xv) of the
second paragraph thereof), which calculation shall be made on a pro forma
basis deducting from Adjusted Consolidated Net Income the amount of any
Investment the Company has made in an Unrestricted Subsidiary during the
relevant period and any Investment the Company intends to make in an
Unrestricted Subsidiary, to the extent that such Investment is made with
amounts included in Adjusted Consolidated Net Income as a result of Transfers
described in clause (c)(x) of Section 4.07 hereof or clause (c)(y) of this
Section 4.14; or
(c)such Investment, together with the aggregate of all other Investments
in Unrestricted Subsidiaries made after May 13, 1992, exceeds (w) the
aggregate Consolidated Net Cash Flow of the Company for the period (taken as
one accounting period) from the beginning of the first quarter immediately
after May 13, 1992 to the end of the Company's most recently ended fiscal
quarter at the time of such Investment; plus (x) 100% of the aggregate net
cash proceeds received by the Company from (i) the issue or sale of Equity
Interests of the Company (other than such Equity Interests issued or sold to
a Restricted Subsidiary of the Company and other than Redeemable Stock) or
(ii) the sale of the stock of an Unrestricted Subsidiary or the sale of all
or substantially all of the assets of an Unrestricted Subsidiary to the
extent that a liquidating dividend is paid to the Company or any Restricted
Subsidiary from the proceeds of such sale; plus (y) 100% of the amount of all
Transfers from a Net Cash Flow Unrestricted Subsidiary up to the aggregate
Investment (after taking into account all prior Transfers from such Net Cash
Flow Unrestricted Subsidiary) in such Net Cash Flow Unrestricted Subsidiary
resulting from such payments or transfers of assets (valued in each case as
provided in the definition of "Investment"); plus (z) in the event of a
designation of a Net Cash Flow Unrestricted Subsidiary as a Restricted
Subsidiary, 100% of an amount equal to the greater of (A) the fair market
value of such Subsidiary as determined by the Board of Directors in good
faith (or, if such fair market value may exceed $25.0 million, as determined
in writing by an independent investment banking firm of nationally recognized
standing) at the time of the redesignation of such Net Cash Flow Unrestricted
Subsidiary as a Restricted Subsidiary and (B) the Consolidated Net Cash Flow
generated by such Subsidiary for the period (taken as one accounting period)
from the beginning of its first fiscal quarter commencing immediately after
the date of its designation as Net Cash Flow an Unrestricted Subsidiary
through such Subsidiary's fiscal quarter ending immediately prior to its
designation as a Restricted Subsidiary (or if such Consolidated Net Cash Flow
for such period is a deficit, 100% of such deficit);
provided, that all such amounts applied pursuant to this clause (c) shall not be
available for application under clause (c) of Section 4.07 hereof.
The foregoing limitations shall not apply to an Investment to the extent
that it is (i) to capitalize a Restricted Payment Unrestricted Subsidiary
permitted pursuant to Section 4.07 hereof; (ii) funded by the issuance of Equity
Interests of the Company to the extent net proceeds are not used to fund an
optional redemption of Notes and (iii) Investments in Unrestricted Subsidiaries
having an aggregate fair market value, when taken together with all other
Investments made pursuant to this clause (iii) that are at that time
outstanding, not to exceed $50.0 million at the time of such Investment (with
the fair market value of each Investment being measured at the time made and
without giving effect to subsequent changes in value). For the purposes of
determining compliance with this Section 4.14, in the event that the making of
an Investment in an Unrestricted Subsidiary meets the criteria of more than one
of the categories of permitted Investments in Unrestricted Subsidiaries
described in clauses (i) through (iii) above or is entitled to be incurred
pursuant to the first paragraph of this Section 4.14 (including clauses (a), (b)
and (c) thereof), the Company shall, in its sole discretion, classify such
Investment in an Unrestricted Subsidiary in any manner that complies with this
Section 4.14 and Investment in an Unrestricted Subsidiary will be treated as
having been made pursuant to only one of such clauses or pursuant to the first
paragraph of this Section 4.14.
All Net Cash Flow Unrestricted Subsidiaries of the Company shall at all
times remain wholly-owned, directly or indirectly, by the Company or a
wholly-owned Restricted Subsidiary of the Company.
Not later than the date of making any Investment described above, the
Company shall deliver to the Trustee an Officer's Certificate stating that such
Investment is permitted (including, without limitation, whether such Investment
is capitalizing a Net Cash Flow
39
Unrestricted Subsidiary or a Restricted Payment Unrestricted Subsidiary) and
setting forth the basis upon which the calculations required by this Section
4.14 were computed, which calculations may be based on the Company's latest
available internal financial statements.
SECTION 4.15 PAYMENTS FOR CONSENT
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or agreed to be paid to all Holders of the Securities which so consent,
waive or agree to amend in the time frame set forth in solicitation documents
relating to such consent, waiver or agreement.
SECTION 4.16 CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Restricted
Subsidiary in accordance with the respective organizational documents of each
Restricted Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Restricted Subsidiaries; provided that the
Company shall not be required to preserve any such right, license or franchise,
or the corporate, partnership or other existence of any Restricted Subsidiary,
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries taken as a whole and that the loss thereof is not
adverse in any material respect to the Holders.
SECTION 4.17 SUBSIDIARY OWNERSHIP.
All Restricted Subsidiaries and all Net Cash Flow Unrestricted
Subsidiaries shall at all times remain wholly-owned, directly or indirectly, by
the Company or a Restricted Subsidiary except if sold, leased, conveyed,
disposed of or transferred in accordance with Section 4.11 hereof.
SECTION 4.18 RULE 144A INFORMATION REQUIREMENT .
The Company will furnish to the Holders or beneficial holders of the
Securities and prospective purchasers of the 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 the Company consummates the Exchange Offer or has registered
the Securities for resale under the Securities Act.
ARTICLE 5
SUCCESSORS
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not consolidate with, merge with or into, or transfer all
or substantially all of its assets (as an entirety or substantially as an
entirety in one transaction or a series of related transactions), to any Person
(except a wholly-owned Restricted Subsidiary, provided that in connection with
any merger of the Company with a Restricted Subsidiary of the Company, no
consideration (other than common stock in the surviving corporation or the
Company) shall be issued or distributed to the shareholders of the Company) or
permit any person to merge with or into it unless:
(i) the Company shall be the continuing Person, or the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or to which the properties and assets of the Company are transferred
(collectively, the "Successor") shall be a corporation organized and existing
under the laws of the United States or any State thereof or the District of
Columbia and shall
40
expressly assume, by a supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction on a pro forma
basis, (a) no Default and no Event of Default under this Indenture shall have
occurred and be continuing and (b) the Company could incur at least $1.00 of
additional Indebtedness pursuant to the first paragraph of Section 4.09 hereof;
and
(iii) immediately after giving effect to such transaction on a pro forma
basis, the Fixed Charge Coverage Ratio of the surviving entity is at least 1:1;
provided that if the Fixed Charge Coverage Ratio of the Company before giving
effect to such transaction is within the range set forth in column (A) below,
then the pro forma Fixed Charge Coverage Ratio of the surviving entity shall be
at least equal to the lesser of (x) the ratio determined by multiplying the
percentage set forth in Column B by the Fixed Charge Coverage Ratio of the
Company prior to such transaction, and (y) the ratio set forth in Column C
below:
(A) (B) (C)
--- --- ---
1.11:1 to 1.99:1.......................... 90% 1.5:1
2.00:1 to 2.99:1.......................... 80% 2.1:1
3.00:1 to 3.99:1.......................... 70% 2.4:1
4.00:1 or more............................ 60% 2.5:1
and provided, further, that if the pro forma fixed Charge Coverage Ratio of the
surviving entity is 3:1 or more, the calculation in the preceding provision
shall be inapplicable and such transaction shall be deemed to have complied with
the requirements of clause (iv) of this Section 5.01.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED
Upon any consolidation or merger, or any sale, lease, conveyance or other
disposition of all or substantially all of the assets of the Company or any
assignment of its obligations under this Indenture or the Securities in
accordance with Section 5.01 hereof, the Successor formed by such consolidation
or into or with which the Company is merged or to which such sale, lease,
conveyance or other disposition or assignment is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such Successor has been named as the
Company herein and the predecessor Company, in the case of a sale, lease,
conveyance or other disposition or assignment, shall be released from all
obligations under this Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT
Each of the following constitutes an "Event of Default":
(1) the Company fails to make any payment of interest on any Security when
the same shall become due and payable and the Default continues for a period
of 30 days;
(2) the Company fails to make any payment of the principal or premium of
any Security when the same shall become due and payable at maturity, or upon
acceleration, redemption or otherwise;
(3) the Company fails to comply with any of its other agreements or
covenants in, or provisions of, the Securities or this Indenture and such
failure continues for the period and after the notice specified below;
41
(4) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any Indebtedness
for money borrowed by the Company or any of its Restricted Subsidiaries (or
the payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee is now existing or
thereafter created in the future, if either (A) such default is the failure
to pay the final scheduled principal installment in an amount of at least $10
million in respect of any such Indebtedness on the stated maturity date
thereof (after giving effect to any extension of such maturity date by the
holder of such Indebtedness and after the expiration of any grace period in
respect of such final scheduled principal installment contained in the
instrument under which such Indebtedness is outstanding) or (B) as a result
of such default the maturity of such Indebtedness has been accelerated prior
to its express maturity and the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness the
maturity of which has been accelerated, aggregates $20 million or more;
provided that an Event of Default shall not be deemed to occur with respect
to any accelerated Indebtedness which is repaid or prepaid within 20 days
after such declaration;
(5) a final judgment that exceeds $15 million individually, or final
judgments that exceed $25 million in the aggregate, for the payment of money
are entered by a court or courts of competent jurisdiction against the
Company, or any of its Restricted Subsidiaries and such judgment or judgments
shall not be discharged, satisfied, stayed, annulled or rescinded within 60
days of being entered;
(6) the Company or any of the Restricted Subsidiaries pursuant to or
within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against it in an
involuntary case,
(c) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(d) makes a general assignment for the benefit of its creditors;
or
(7) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(a) is for relief against the Company, or any of its Restricted
Subsidiaries as debtor in an involuntary case,
(b) appoints a Custodian of the Company, or any of its Restricted
Subsidiaries or a Custodian for all or substantially all of
the property of the Company, or any of its Restricted
Subsidiaries, or
(c) orders the liquidation of the Company, or any of its
Restricted Subsidiaries,
and the order or decree remains unstayed and in effect for 60 days.
(8)except as permitted by this Indenture and the Securities, the
Guarantees shall be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect with
respect to any Guarantor or any Guarantor shall deny or disaffirm its
obligations under its Guarantee.
The Company is required, pursuant to Section 4.04(a) hereof, to deliver to
the Trustee annually a statement regarding compliance with this Indenture, and
the Company is required, pursuant to Section 4.04(c) hereof, upon becoming aware
of any Default or Event of Default to deliver a statement to the Trustee
specifying such Default or Event of Default. The Trustee shall not be deemed to
know of a Default unless a Responsible Officer has actual knowledge of such
Default or receives written notice of such Default with specific reference to
such Default.
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In the case of any Event of Default pursuant to the provisions of this
Section 6.01 occurring by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding payment
of the premium, if any, which the Company would have had to pay if the Company
then had elected to redeem the Securities pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law, anything in this Indenture or in the Securities
contained to the contrary notwithstanding.
A Default under clause (3) is not an Event of Default until the Trustee
notifies the Company, or the Holders of at least 30% in principal amount of the
then outstanding Securities notify the Company and the Trustee, in writing, of
the Default and the Company does not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default."
SECTION 6.02 ACCELERATION
If an Event of Default (other than an Event of Default with respect to the
Company specified in clauses (6) or (7) of Section 6.01 hereof) occurs and is
continuing, the Trustee by written notice to the Company, or the Holders of at
least 30% in principal amount of the then outstanding Securities by written
notice to the Company and the Trustee, may and the Trustee at the request of
such Holders shall, declare all unpaid principal of, premium and Liquidated
Damages, if any, and accrued interest on the Securities to be due and payable
immediately. Upon such declaration of acceleration such principal of, premium
and Liquidated Damages, if any, and accrued interest, due and payable on the
Securities, as determined in the next succeeding paragraph, shall be due and
payable immediately. If an Event of Default with respect to the Company
specified in clause (6) or (7) of Section 6.01 hereof occurs, all unpaid
principal of, premium and Liquidated Damages, if any, and accrued interest on
the Securities then outstanding shall ipso facto become and be immediately due
and payable without any declaration, notice or other act on the part of the
Trustee or any Holder. The Holders of at least 51% in aggregate principal amount
of the then outstanding Securities by written notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default (except nonpayment
of principal, premium and Liquidated Damages, if any, or interest on the
Securities that has become due solely as a result of such acceleration) have
been cured or waived.
In the event that the maturity of the Securities is accelerated pursuant
to this Section 6.02, 100% of the principal amount thereof and premium or
Liquidated Damages, if any, plus accrued interest to the date of payment shall
become due and payable.
SECTION 6.03 OTHER REMEDIES
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium and Liquidated
Damages, if any, or interest then due on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. All remedies are cumulative
to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS
The Holders of at least 51% in principal amount of the then outstanding
Securities by notice to the Trustee may waive an existing Default or Event of
Default and its consequences (including waivers obtained in connection with a
tender offer or exchange offer for Securities), except a continuing Default or
Event of Default (i) in the payment of the principal of, premium or Liquidated
Damages, if any, or interest on any Security (including, without limitation,
pursuant to any mandatory or optional redemption obligation hereunder) or (ii)
that resulted from the failure to comply with Section 4.10 or 4.11 hereof. Upon
any such waiver, such Default shall cease to exist,
43
and any Event of Default arising therefrom shall be deemed to have been cured
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.05 CONTROL BY MAJORITY
The Holders of a majority in principal amount of the then outstanding
Securities may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of other Holders, or that may involve the Trustee in
personal liability.
SECTION 6.06 LIMITATIONS ON SUITS
A Holder may not pursue a remedy with respect to this Indenture, the
Securities or any Guarantee unless:
(1) the Holder gives to the Trustee written notice of a continuing Event
of Default;
(2) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense (including, without
limitation, fees and expenses of counsel);
(4) the Trustee does not comply with the request within 30 days after
receipt of the request and the offer of indemnity; and
(5) during such 30-day period the Holders of a majority in principal
amount of the then outstanding Securities do not give the Trustee a direction
which is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of, premium and Liquidated
Damages, if any, and interest on the Security, on or after the respective due
dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, shall not be impaired or
affected without the consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE
If an Event of Default specified in Section 6.01(1) or (2) or (3) (with
respect to the Company's obligations under Section 4.10 or 4.11 hereof) hereof
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company or any Guarantor
for the amount of principal, premium, if any, and interest remaining unpaid on
the Securities, determined in accordance with Section 6.02 hereof and interest
on overdue principal, premium and Liquidated Damages, if any, and, to the extent
lawful, interest, and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the
44
Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company, its creditors or its property and shall be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties which the Holders of the
Securities may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10 PRIORITIES
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 hereof;
Second: to Holders for amounts due and unpaid on the Securities for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, premium, if any, and interest,
respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Article 6.
SECTION 6.11 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE
(1) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in such exercise, as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(2) Except during the continuance of an Event of Default:
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(a) the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(b) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
pursuant to and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine whether
or not, on their face, they appear to conform to the requirements of this
Indenture.
(3) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(a) this paragraph does not limit the effect of paragraph (2) of
this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or other officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts;
and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02 or 6.05 hereof.
(4) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (1),
(2), (3) and (5) of this Section 7.01.
(5) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee is not obligated to
perform any duty or exercise any right or power under this Indenture at the
request of the Holders of the Securities unless it receives an offer from such
Holders of security and indemnity satisfactory to it against any loss, liability
or expense (including, without limitation, fees of counsel).
(6) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02 RIGHTS OF TRUSTEE
(1) The Trustee may rely 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 the document.
(2) Before the Trustee acts or refrains from acting, it may require
receipt of an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel of its selection and the advice of such counsel
(to be promptly confirmed in writing) or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder and in reliance thereon.
(3) The Trustee may act through agents, attorneys, custodians and nominees
and shall not be responsible for the misconduct or negligence of any such agent,
attorney, custodian or nominee appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers conferred upon it by this Indenture.
(5) Unless otherwise specifically provided 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.
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SECTION 7.03 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 or any of its
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 is subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04 TRUSTEE'S DISCLAIMER
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, 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 direction under any provision hereof, it shall not be responsible for
the use or application of any money received by any Paying Agent other than the
Trustee and it shall not be responsible for any statement or recital herein or
any statement in the Securities other than its certificate of authentication.
SECTION 7.05 NOTICE OF DEFAULTS
If a Default or Event of Default occurs and is continuing and if it is
actually known to a Responsible Officer of the Trustee, the Trustee shall mail
to each Holder a notice of the Default or Event of Default within 90 days after
it occurs or, if later, within ten days after such Default or Event of Default
becomes so known to the Trustee unless such Default or Event of Default has been
cured. Except in the case of a Default or Event of Default in payment of
principal of, premium and Liquidated Damages, if any, or interest on any
Security or that resulted from a failure to comply with Section 4.10 or 4.11
hereof, the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers determines in good faith that withholding the notice is in
the interests of the Holders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS
Within 60 days after each June 1 beginning with June 1, 1998, the Trustee
shall mail to Holders a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA ss. 313(b). The Trustee
also shall transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each stock exchange on which the Securities are listed. The
Company shall notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 7.07 COMPENSATION AND INDEMNITY
The Company shall pay to the Trustee from time to time such compensation
for its acceptance of this Indenture and services hereunder as the parties shall
agree from time to time. The Trustee's compensation shall not be limited by any
law relating to compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred by it. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee and its
directors, officers, employees and agents against any loss, liability or expense
(including without limitation fees and expenses of counsel) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture including, without limitation, costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of its powers and duties hereunder, except as set forth in the
next paragraph. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
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The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of,
premium and Liquidated Damages, if any, and interest on particular Securities.
Such Lien shall survive the satisfaction and discharge of the Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(6) or (7) hereof occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF TRUSTEE
The Trustee may resign and be discharged from the trust hereby created by
so notifying the Company. The Holders of a majority in principal amount of the
then outstanding Securities may remove the Trustee by so notifying the Trustee
and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy
Law;
(3) a Custodian or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
The foregoing notwithstanding, a resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this Section 7.08,
and thereafter the Trustee shall have no liability for any acts or omissions of
any successor Trustee.
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.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then 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 Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to the Holders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the Lien provided for in Section 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the
Company's obligations under Section 7.07 hereof shall continue for the benefit
of the retiring Trustee.
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SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC .
Subject to Section 7.10 hereof, if the Trustee consolidates, merges or
converts into, or transfers all or substantially all of its corporate trust
business to, another corporation or national banking association, the successor
entity without any further act shall be the successor Trustee. In case any
Securities have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation of such
authenticating trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor trustee had itself
authenticated such Securities.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia authorized under such
laws to exercise corporate trust powers, shall be subject to supervision or
examination by Federal or state (or the District of Columbia) authority and
shall have a combined capital and surplus of at least $50 million as set forth
in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1). The Trustee is subject to TIA ss. 310(b).
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01 TERMINATION OF COMPANY'S AND GUARANTORS' OBLIGATIONS
This Indenture shall cease to be of further effect (except that the
Company's obligations under Section 7.07 hereof and the Trustee's and Paying
Agent's obligations under Section 8.03 hereof 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 has paid all sums payable
hereunder. In addition, the Company may terminate all of its obligations under
this Indenture if:
(1) the Company irrevocably deposits, or causes to be deposited, in trust
with the Trustee or the Paying Agent, or, at the option of the Trustee, with
a trustee satisfactory to the Trustee and the Company under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, money or U.S. Government Obligations in an amount sufficient
(without reinvestment thereof) to pay principal and interest on the
Securities to maturity or redemption, as the case may be, as such amounts
become due, and to pay all other sums payable by it hereunder; provided that
(i) the trustee of the irrevocable trust shall have been irrevocably
instructed to pay such money or the proceeds of such U.S. Government
Obligations to the Trustee and (ii) the Trustee shall have been irrevocably
instructed to apply such money or the proceeds of such U.S. Government
Obligations to the payment of said principal, premium and Liquidated Damages,
if any, and interest with respect to the Securities;
(2) the Company delivers to the Trustee an Officers' Certificate stating
that all conditions precedent to satisfaction and discharge of this Indenture
have been complied with, and an Opinion of Counsel to the same effect;
(3) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit; and
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(4) the Company shall have delivered to the Trustee an Opinion of Counsel
from nationally recognized counsel acceptable to the Trustee or a tax ruling
from the Internal Revenue Service to the effect that the Holders of the
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of the Company's exercise of its option under this
Section 8.01 and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
option had not been exercised.
In such event, this Indenture shall cease to be of further effect (except as
provided in the next succeeding paragraph), and the Trustee, on demand of the
Company, shall execute proper instruments acknowledging confirmation of and
discharge under this Indenture.
However, the Company's and the Guarantors' obligations in Sections 2.03,
2.04, 2.05, 2.06, 2.07, 4.01, 4.06, 7.07, 7.08 and 8.04 hereof and the
Company's, the Guarantors', the Trustee's and Paying Agent's obligations in
Section 8.03 hereof, and the Trustee's rights under Article 7 hereof, shall
survive until the Securities are no longer outstanding. Thereafter, only the
Company's obligations in Section 7.07 hereof and the Trustee's and Paying
Agent's obligations in Section 8.03 hereof shall survive.
After such irrevocable deposit made pursuant to this Section 8.01 and
satisfaction of the other conditions set forth herein, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
this Indenture except for those surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the issuer's option.
SECTION 8.02 APPLICATION OF TRUST MONEY
The Trustee or a trustee satisfactory to the Trustee and the Company shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
Section 8.01 hereof. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.03 REPAYMENT TO COMPANY
The Trustee and the Paying Agent shall promptly pay to the Company upon
written request any excess money or securities held by them at any time,
provided that nothing remains owed to the Trustee pursuant to this Indenture.
The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal or interest that
remains unclaimed for two years after the date upon which such payment shall
have become due; provided that the Company shall have either caused notice of
such payment to be mailed to each Holder entitled thereto no less than 30 days
prior to such repayment or within such period shall have published such notice
in a financial newspaper of widespread circulation published in The City of New
York. After payment to the Company, Holders entitled to the money must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
SECTION 8.04 REINSTATEMENT
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 8.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Securities
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.01 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with
Section 8.01 hereof; provided, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated
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to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01 WITHOUT CONSENT OF HOLDERS
The Company and the Trustee may amend this Indenture, the Securities or
the Guarantee or waive any provision hereof or thereof without the consent of
any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in place
of certificated Securities;
(3) to comply with Section 5.01 hereof;
(4) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the rights
hereunder of any Holder; or
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 9.06 hereof,
the Trustee shall join with the Company in the execution of any supplemental
indenture authorized or permitted by the terms of this Indenture and make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into any supplemental indenture
that, in its reasonable discretion, affects its own rights, duties or immunities
under this Indenture or otherwise. After an amendment or waiver under this
Section 9.01 becomes effective, the Company shall mail to the Holders of each
Security affected thereby a notice briefly describing the amendment 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.
SECTION 9.02 WITH CONSENT OF HOLDERS
Except as provided below in this Section 9.02, this Indenture, the
Securities or the Guarantee may be amended or supplemented, with the written
consent of the Holders of at least 51% in principal amount of the then
outstanding Securities (including consents obtained in connection with a tender
offer or exchange offer for Securities).
Upon the request of the Company, accompanied by a resolution of the Board
of Directors authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of the Holders as
aforesaid, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of such
supplemental indenture unless, in the Trustee's reasonable discretion, such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
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The Holders of at least 51% in principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities (including waivers obtained in
connection with a tender offer for Securities) or any existing default. However,
without the consent of each Holder affected, an amendment or waiver under this
Section may not (with respect to any Securities held by a non-consenting
Holder):
(1) reduce the principal amount of Securities whose Holders must consent
to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Security
or alter the provisions with respect to the redemption or purchase
price in connection with repurchases under Sections 3.07, 3.08, 4.10
or 4.11 hereof;
(3) reduce the rate of or change the time for payment of interest on any
Security;
(4) waive a Default or Event of Default in the payment of principal of
or premium and Liquidated Damages, if any, or interest on the
Securities or that resulted from a failure to comply with Sections
4.10 or 4.11 hereof (except a rescission of acceleration of the
Securities by the Holders of at least 51% in aggregate principal
amount of the Securities as provided in Section 6.02 hereof);
(5) make any Securities payable in money other than that stated in the
Securities;
(6) make any change in Section 6.04 or 6.07 hereof or in this sentence
of this Section 9.02; or
(7) waive a redemption payment with respect to any Security.
The right of any Holder to participate in any consent required or sought
pursuant to any provision of this Indenture (and the obligation of the Company
to obtain any such consent otherwise required from such Holder) may be subject
to the requirement that such Holder shall have been the Holder of record of any
Securities with respect to which such consent is required or sought as of a date
identified by the Trustee in a notice furnished to Holders in accordance with
the terms of this Indenture.
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT
Every amendment to this Indenture or the Securities shall comply in form
and substance with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS
Until an amendment (which includes any supplement) or waiver becomes
effective, a consent to it by a Holder of a Security is a continuing consent by
the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same 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 or her Security or portion of
a Security if the Trustee receives written notice of revocation before the date
the amendment or waiver becomes effective. An amendment or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
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 or
waiver. If the Company elects to fix a record date for such purpose, the record
date shall be fixed at (i) the later of 30 days prior to the first solicitation
of such consent or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 2.05 hereof, or (ii) such
other date as the Company shall designate. If a record date is fixed, then
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment or waiver
or to revoke any consent previously given, whether or not such Persons continue
to be Holders after such record date. No consent shall be valid or effective for
more than 90
52
days after such record date unless consents from Holders of the principal amount
of Securities required hereunder for such amendment or waiver to be effective
shall have also been given and not revoked within such 90-day period.
After an amendment or waiver becomes effective it shall bind every Holder,
unless it is of the type described in any of clauses (1) through (7) of Section
9.02 hereof. In such case, the amendment or waiver shall bind each Holder of a
Security who has consented to it and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 9.05 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. The
Trustee may place an appropriate notation about the changed terms and return it
to the Holder and the Trustee may place an appropriate notation on any Security
thereafter authenticated. Alternatively, if the Company or Trustee so
determines, the Company in exchange for all Securities shall issue and the
Trustee shall authenticate new Securities that reflect the changed terms.
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture authorized
pursuant to this Article 9 if the amendment does not, in the Trustee's
reasonable discretion, adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing or refusing to sign such amendment or supplemental indenture, the
Trustee shall be entitled to receive and, subject to Section 7.01 hereof, shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that such amendment or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Company in accordance with its
terms.
ARTICLE 10
GUARANTEE
SECTION 10.01 SUBSIDIARY GUARANTEE
Each of the Guarantors hereby, jointly and severally, fully and
unconditionally guarantees 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 of this Indenture, the
Securities or the obligations of the Company hereunder or thereunder, that: (a)
the principal of, and premium and Liquidated Damages, if any, and interest on
the Securities will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of,
premium and Liquidated Damages, if any, and interest on the Securities, if any,
if lawful, and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Securities or any of such other
obligations, the same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise; provided, however, that the maximum
liability of a Guarantor pursuant to this Guarantee shall in no event exceed the
Maximum Guaranteed Amount (as defined below). Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
The Guarantors hereby agree that their obligations hereunder shall be absolute
and unconditional, irrespective of the validity, regularity or enforceability of
the Securities or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder of the Securities with respect to any
provisions hereof or thereof, the recovery of any judgment against the Company,
any action to enforce the same or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor other than
the defense that payment has been made or that the other relevant obligations
have been paid or performed. Each Guarantor hereby waives diligence,
presentment, demand of payment, claim of fraud, filing of claims with a court in
the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities and this Indenture.
If any Holder or the Trustee is required by any court or otherwise to return to
the Company or
53
Guarantors, or any Custodian, trustee, liquidator or other similar official
acting in relation to either the Company or Guarantors, any amount paid by
either 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 shall 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 the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of this Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.
The "Maximum Guaranteed Amount" means, with respect to any Guarantor, the
amount which allows the Guarantee to be enforceable to the fullest extent
permitted by law, limited only to the extent necessary for the Guarantee to not
constitute a fraudulent conveyance.
The "Adjusted Net Worth" of a Guarantor as of the Guarantee Date shall
mean the excess of (a) the amount of the fair saleable value of the assets of
such Guarantor as of such date determined in accordance with applicable federal
and state laws governing determinations of the insolvency of debtors over (b)
the amount of all liabilities of such Guarantor, contingent or otherwise, as of
the Guarantee Date, determined on the basis provided in clause (a) above
(excluding all liabilities under this Guarantee).
Each Guarantor shall be subrogated to all rights of each Holder of any
Securities against the Company in respect of any amounts paid to the Holders by
such Guarantor pursuant to the provisions of this Guarantee; provided that the
Guarantors shall not be entitled to enforce, or to receive, any payments arising
out of or based upon, such right of subrogation until the principal of, premium
and Liquidated Damages, if any, and interest on all the Securities shall have
been paid in full and nothing remains owed to the Trustee pursuant to this
Indenture.
The Guarantee set forth in this Section 10.01 shall not be valid or become
obligatory for any purpose with respect to a Security until the certificate of
authentication on such Security shall have been signed by or on behalf of the
Trustee.
No Unrestricted Subsidiary or Partially Owned Restricted Subsidiary shall
become a guarantor of any Indebtedness of the Company or any Restricted
Subsidiaries unless such Unrestricted Subsidiary or Partially Owned Restricted
Subsidiary becomes a guarantor of the Notes.
SECTION 10.02 EXECUTION AND DELIVERY OF GUARANTEE
To evidence its Guarantee set forth in Section 10.01 hereof, each
Guarantor hereby agrees that a notation of such Guarantee substantially in the
form of Exhibit A-1 shall be endorsed by an officer of such Guarantor on each
Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of such Guarantor by its President or one of its
Vice Chairmen or Vice Presidents.
Each Guarantor hereby agrees that its Guarantee set forth in Section 10.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Security a notation of such Guarantee.
If an officer or Officer whose signature is on this Indenture of on the
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which a Guarantee is endorsed, the Guarantee shall be valid, binding
and enforceable nevertheless.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of the Guarantors.
54
SECTION 10.03 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to the Company or another Guarantor. Upon any such
consolidation, merger, sale or conveyance, the Guarantee given by such Guarantor
shall no longer have any force or effect.
(b) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Guarantor with or into a corporation or corporations other than the
Company or another Guarantor (whether or not affiliated with the Guarantor), or
successive consolidations or mergers in which a Guarantor or its successor or
successors shall be a party or parties, or shall prevent any sale or conveyance
of the property of a Guarantor as an entirety or substantially as an entirety,
to a corporation other than the Company or another Guarantor (whether or not
affiliated with the Guarantor) authorized to acquire and operate the same;
provided that each such Guarantor is sold or disposed of for fair market value,
evidenced by a resolution of the Board of Directors set forth in an Officer's
Certificate delivered to the Trustee; and provided, further, that the foregoing
proviso shall not apply to the sale or disposition of a Guarantor in a
foreclosure proceeding to the extent that such proviso would be inconsistent
with the Uniform Commercial Code. Upon any such consolidation, merger, sale or
conveyance, the Guarantee given by such Guarantor shall no longer have any force
or effect.
SECTION 10.04 RELEASES FOLLOWING SALE OF ASSETS
Concurrently with any sale of assets (including, if applicable, all of the
capital stock of any Guarantor), any Liens in favor of the Trustee in the assets
sold thereby shall be released; provided that any such assets are sold or
disposed of for fair market value, evidenced by a resolution of the Board of
Directors set forth in an Officer's Certificate delivered to the Trustee and,
provided, further, that, the foregoing proviso shall not apply to the sale or
disposition of a Guarantor in a foreclosure proceeding to the extent that such
proviso would be inconsistent with the Uniform Commercial Code. If the assets
sold in such sale or other disposition include all or substantially all of the
assets of any Guarantor or all of the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition of all of the capital
stock of such Guarantor) or the corporation acquiring the property and such
Guarantor (in the event of a sale or other disposition of all or substantially
all of the assets of a Guarantor) shall automatically be released and relieved
of its obligations under this Article 10, provided that any such sale or
disposition of all or substantially all of the assets of a Guarantor is sold or
disposed of for fair market value, evidenced by a resolution of the Board of
Directors set forth in an Officer's Certificate delivered to the Trustee and,
provided, further, that the foregoing proviso shall not apply to the sale or
disposition of a Guarantor in a foreclosure proceeding to the extent that such
proviso would be inconsistent with the Uniform Commercial Code. Upon delivery by
the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, the Trustee shall execute any
documents reasonably required in order to evidence the release of any Guarantor
from its obligations under its Guarantee. Any Guarantor not released from its
obligations under its Guarantee shall remain liable for the full amount of
principal of and interest on the Securities and for the other obligations of any
Guarantor under the Indenture as provided in this Article 10.
SECTION 10.05 "TRUSTEE" TO INCLUDE PAYING AGENT
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
55
SECTION 10.06 ADDITIONAL SUBSIDIARY GUARANTEES
The Company shall (a) cause each Subsidiary which, after the date of this
Indenture (if not then a Guarantor), becomes a Restricted Subsidiary to execute
a Guarantee of the Obligations of the Company hereunder in the form set forth in
this Article 10 hereof and Exhibit A-1 hereto, provided that no Subsidiary
organized outside of the United States of America and no Unrestricted Subsidiary
shall be required to be a Guarantor, and (b) deliver to the Trustee an Opinion
of Counsel, in form reasonably satisfactory to the Trustee, that such Subsidiary
Guarantee is a valid, binding and enforceable obligation of such Restricted
Subsidiary, subject to customary exceptions for bankruptcy, fraudulent
conveyance and equitable principles and the implied covenant of good faith and
fair dealing.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included herein by any of Sections 310
to 317 inclusive of the TIA, such required provisions shall control.
SECTION 11.02 NOTICES
Any notice or communication by the Company, the Guarantors or the Trustee
to the other is duly given if in writing and delivered in person or mailed by
first-class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
other's address:
If to the Company or the Guarantors:
PRIMEDIA, INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx -- 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000/5917
56
The Company, the Guarantors or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail, certified or registered, return receipt requested, to the Holder's address
shown on the register kept by the Registrar. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS
Holders may communicate pursuant to TIA ss. 312(b) with other Holders with
respect to their rights under this Indenture or the Securities. The Company, the
Guarantors, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss. 312(c).
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT
Upon any request or application by the Company and/or any Guarantors to
the Trustee to take any action under this Indenture, the Company and/or such
Guarantor as the case may be shall furnish to the Trustee:
(1) an Officers' Certificate (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (which shall include the statements set forth in
Section 11.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.
SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall include:
(1) a statement that the Person making such certificate or opinion has
read and understands 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
complied with; and
57
(4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with; provided that with respect to
matters of fact Opinions of Counsel may rely on an Officers' Certificate or
certificates of public officials.
SECTION 11.06 RULES BY TRUSTEE AND AGENTS
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07 LEGAL HOLIDAYS
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
obligated by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
SECTION 11.08 NO RECOURSE AGAINST OTHERS
No director, officer, employee, incorporator or shareholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Securities, this Indenture or the Guarantees or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of the Securities by accepting the Securities waives and releases all
such liability. The waiver and release are part of the consideration for
issuance of the Securities.
SECTION 11.09 GOVERNING LAW
This Indenture, the Securities and the Guarantee shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law.
SECTION 11.10 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 11.11 SUCCESSORS
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 11.12 SEVERABILITY
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.13 COUNTERPART ORIGINALS
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
58
SECTION 11.14 TRUSTEE AS PAYING AGENT AND REGISTRAR
The Company initially appoints the Trustee as Paying Agent and Registrar.
The provisions regarding the indemnification of the Trustee set forth in Section
7.07 shall also apply to the Trustee in its capacity as Paying Agent and
Registrar hereunder.
SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 11.16 BANK OF NEW YORK NOT ACTING IN INDIVIDUAL CAPACITY
Notwithstanding anything to the contrary contained herein, this Indenture
has been accepted by The Bank of New York not in its individual capacity but
solely as Trustee and in no event shall The Bank of New York have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Company herein or in any of the certificates, notices or agreements
delivered by the Company pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Company, and under no circumstances shall The
Bank of New York be personally liable for the payment of any indebtedness or
expenses of the Company.
SECTION 11.17 ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders of Securities under the
Indenture, Holders of Transfer Restricted Securities shall have all the rights
set forth in the Registration Rights Agreement.
[Signatures on Following Pages]
59
SIGNATURES
PRIMEDIA INC.
Dated as of February 17, 1998 By:
----------------------------------------
Name:
Title:
THE APARTMENT GUIDE OF NASHVILLE, INC.
ARGUS PUBLISHERS CORPORATION
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
ASTN, INC.
A WEP COMPANY
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
CARDINAL BUSINESS MEDIA, INC.
CARDINAL BUSINESS MEDIA HOLDINGS, INC.
CHANNEL ONE COMMUNICATIONS
CORPORATION
COVER CONCEPTS MARKETING SERVICES, LLC
CSK PUBLISHING COMPANY INCORPORATED
DAILY RACING FORM, INC.
DATA BOOK, INC.
DRF FINANCE, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FUNK & WAGNALLS YEARBOOK CORPORATION
XXXXXX XXXXXXX, INC.
GO LO ENTERTAINMENT, INC.
XXXXX COMMUNICATIONS, INC.
XXXX PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS CORPORATION
INTELLICHOICE, INC.
INTERMODAL PUBLISHING COMPANY, LTD.
INTERTEC MARKET REPORTS, INC.
INTERTEC PRESENTATIONS, INC.
INTERTEC PUBLISHING CORPORATION
K-III HPC, INC.
K-III PRIME CORPORATION
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LIFETIME LEARNING SYSTEMS, INC.
LITTLE ROCK APARTMENT GUIDE, INC.
XXXXXXX XXXXXXX & ASSOCIATES, INC.
XXXXXXXX ARGUS PUBLISHING, INC.
MEMPHIS APARTMENT GUIDE, INC.
MUSICAL AMERICA PUBLISHING, INC.
XXXXXX INFORMATION, INC.
NEWBRIDGE COMMUNICATIONS, INC.
PARK AVENUE PUBLISHING, INC.
PICTORIAL, INC.
PLAZA COMMUNICATIONS, INC.
PRIMEDIA HOLDINGS III INC.
PRIMEDIA INFORMATION INC.
PRIMEDIA MAGAZINES INC.
PRIMEDIA MAGAZINES FINANCE INC.
PRIMEDIA REFERENCE INC.
PRIMEDIA SPECIAL INTEREST
PUBLICATIONS INC.
QWIZ, INC.
R.E.R. PUBLISHING CORPORATION
STRAIGHT DOWN, INC.
SYMBOL OF EXCELLENCE
PUBLISHERS, INC.
TEL-A-TRAIN, INC.
TI-IN ACQUISITION CORPORATION
WEEKLY READER CORPORATION
XXXXXXXX COMMUNICATIONS, INC.
XXXXXXXX COMMUNICATIONS MICHIGAN, INC.
XXXXXXXX ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
Dated as of February 17, 1998 By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
Dated as of February 17, 1997 By:
----------------------------------------
Vice President
EXHIBIT A
7 5/8 SENIOR NOTES DUE 2008
No. _________________ CUSIP _________________
$______________________
PRIMEDIA Inc., a Delaware corporation (herein called the "Company"), for value
received hereby promises to pay to
_________________________________________________________
or registered assigns,
the principal sum of _________________________________________________________
on April 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Reference is hereby made to the further provisions of this Senior Note due 2008
set forth on the reverse side hereof and such further provisions shall for all
purposes have the same effect as if set forth on the front side hereof.
IN WITNESS WHEREOF, the Company has caused this certificate to be signed
manually or by facsimile.
Dated: February 17, 1998
CERTIFICATE OF AUTHENTICATION:
This is one of the Securities referred
to in the within mentioned Indenture.
THE BANK OF NEW YORK, PRIMEDIA INC.
as Trustee
By: By:
----------------------- --------------------------------
Authorized Signatory Name:
Title:
7 5/8 SENIOR NOTES DUE 2008
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A OR
REGULATION S THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF THE
SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED INVESTOR") THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES LESS THAN $100,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
Capitalized terms used herein have the meaning assigned to them in the
Indenture unless otherwise indicated.
1. INTEREST; LIQUIDATED DAMAGES. The Company promises to pay
interest on the principal amount of this Security at 7 5/8 per annum from
the date of issuance until maturity and shall pay the Liquidated Damages
payable pursuant to Section 5 of the Registration Rights Agreement. The
Company will pay interest and Liquidated Damages, if any, semi-annually on
April 1 and October 1 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Securities will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the
payment of interest, and if this Security is authenticated between a
record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding
Interest Payment Date; provided, further, that the first Interest Payment
Date shall be October 1, 1998. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at the
same rate per annum on the Securities to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law)
A-2
on overdue installments of interest (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of twelve
30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the
Securities (except defaulted interest) and premium and Liquidated Damages,
if any, to the Persons who are registered Holders of Securities at the
close of business on the March 15 or September 15 next preceding the
Interest Payment Date, even if such Securities are cancelled after such
record date and on or before such Interest Payment Date. The Securities
will be payable as to principal, premium, interest and Liquidated Damages
at the office or agency of the Company maintained for such purpose within
or without the City and State of New York, or, at the option of the
Company, payment of interest, premium and Liquidated Damages may be made
by check mailed to the Holders of the Securities at their addresses set
forth in the register of Holders of Securities.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent, Registrar or co-registrar without
notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. INDENTURE. The Company issued the Securities under an Indenture
dated as of February 17, 1998 (the "Indenture") among the Company, the
Guarantors and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference
to the TIA (15 U.S. Code xx.xx. 77aaa-77bbbb). The Securities are subject
to all such terms, and Holders are referred to the Indenture and such Act
for a statement of such terms. The Securities are senior obligations of
the Company initially limited to $250.0 million in aggregate principal
amount, plus premiums and Liquidated Damages, if any, plus amounts, if
any, sufficient to pay interest on outstanding Securities as set forth in
Paragraph 2 hereof. Additional Notes may be issued from time to time
subject to Section 4.09 of the Indenture. The Notes and any additional
Notes subsequently issued would be treated as a single class for all
purposes under the Indenture, including, without limitation, waivers,
amendments, redemptions and offers to purchase.
5. OPTIONAL REDEMPTION.
The Company may redeem all or any of the Securities, in whole or in
part, at any time on or after April 1, 2003 at the redemption prices
(expressed as percentages of the principal amount) set forth in the
immediately succeeding paragraph, plus accrued and unpaid interest thereon
to the applicable redemption date.
The redemption price as a percentage of the principal amount shall
be as follows, if the Securities are redeemed during the twelve-month
period beginning April 1 of the year indicated below:
Year Percentage
---- ----------
2003 ................................ 103.813%
2004 ................................ 102.542%
2005 ................................ 101.271%
2006 and thereafter ................. 100.000%
Notwithstanding the foregoing, upon the occurrence at any time of a
Change of Control, the Securities will be redeemable, at the option of the
Company, in whole or in part, pursuant to the provisions of Section 3.08
of the Indenture.
6. MANDATORY OFFERS TO REPURCHASE; ASSET SALES.
(a) Upon the occurrence of a Change of Control, the Company will be
required to offer (a "Change of Control Offer") to purchase all
outstanding Securities at a purchase price equal to 101% of the aggregate
principal amount of
A-3
such Securities, plus premium, Liquidated damages and accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control
Payment"). The Change of Control Offer shall remain open for a period of
20 Business Days after its commencement unless a longer offering period is
required by law. No earlier than 30 days nor later than 40 days after the
notice of the Change of Control Offer has been mailed (the "Change of
Control Payment Date"), the Company shall deposit, to the extent lawful,
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Securities or portions thereof tendered by Holders. The
Paying Agent shall promptly mail or deliver payment for all Securities
tendered in the Change of Control Offer.
A Holder of Securities may tender all or any portion of his
Securities at his discretion by completing the form entitled "OPTION OF
HOLDER TO ELECT PURCHASE" appearing on this Security. Any portion of
Securities tendered must be in integral multiples of $1,000.
(b) The Company is required to apply 100% of the Net Proceeds of any
Asset Sale (including the sale of stock of any Subsidiary) first to repay
Obligations or reduce commitments under the Credit Facilities, second to
offer to redeem at par the Outstanding Notes and third to offer to redeem
at par the Securities.
7. NOTICE OF REDEMPTION. Notice of any redemption pursuant to
Section 3.07 or 3.08 of the Indenture will be mailed by first class mail
at least 30 days but not more than 60 days before the redemption date to
each Holder whose Securities are to be redeemed at its registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Securities held by a
Holder are to be redeemed. On and after the redemption date interest
ceases to accrue on Securities or portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar
and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted by
the Indenture. The Company need not exchange or register the transfer of
any Security or portion of a Security selected for redemption, except the
unredeemed portion of any Security being redeemed in part. Also, it need
not exchange or register the transfer of any Securities for a period of 15
days before the mailing of a Notice of Redemption and ending on the date
of such mailing or during the period between a record date and the
corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Security may be
treated as its owner for all purposes.
10. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Indenture, the Securities or the Guarantee may be amended or supplemented
and any existing Default under, or compliance with any provision of, the
Indenture may be waived with the consent of the Holders of at least 51% in
principal amount of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange offer for
Securities). Without the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure
any ambiguity, defect or inconsistency; to provide for uncertificated
Securities in addition to or in place of certificated Securities; to
comply with Section 5.01 of the Indenture; to make any change that would
provide any additional rights or benefits to the Holders of the Securities
or that does not adversely affect the legal rights under the Indenture of
any such Holder; or to comply with requirements of the SEC in order to
effect or maintain the qualification of the Indenture under the TIA.
A-4
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any Securities held by a non-consenting Holder of
Securities) (i) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver, (ii) reduce the
principal of or change the fixed maturity of any Security or alter the
provisions with respect to the redemption or purchase price in connection
with repurchases under Sections 3.07, 3.08, 4.10 or 4.11 of the Indenture,
(iii) reduce the rate of or change the time for payment of interest on any
Security, (iv) waive a Default or Event of Default in the payment of
principal of or premium or Liquidated Damages, if any, or interest on the
Securities or that resulted from a failure to comply with Sections 4.10 or
4.11 of the Indenture (except a rescission of acceleration of the
Securities by the Holders of at least 51% in aggregate principal amount of
the Securities as provided in Section 6.02 of the Indenture), (v) make any
Securities payable in money other than that stated in the Securities, (vi)
make any change in Section 6.04 or 6.07 of the Indenture or this sentence,
and or (vii) waive a redemption payment with respect to any Security.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture or this Security (and
the obligation of the Company to obtain any such consent otherwise
required from such Holder) may be subject to the requirement that such
Holder shall have been the Holder of record of any Securities with respect
to which such consent is required or sought as of a date identified by the
Trustee in a notice furnished to Holders in accordance with the terms of
the Indenture.
11. DEFAULTS AND REMEDIES. Events of Default include: default in
payment of interest or Liquidated Damages on the Securities for 30 days;
default in payment of the principal or premium of any Security at
maturity, or upon acceleration, redemption or otherwise; failure by the
Company for 30 days after written notice to it from the Trustee, or after
written notice to it and the Trustee from Holders of at least 30% in
principal amount of the then outstanding Securities, to comply with any of
its other agreements in the Indenture or the Securities; certain defaults
under other Indebtedness; certain final judgments that remain undischarged
for 60 days after being entered; certain events of bankruptcy or
insolvency; and, except as permitted by the Indenture and the Securities,
the Guarantees are held in any judicial proceeding to be unenforceable or
invalid or otherwise cease for any reason to be in full force and effect
with respect to any Guarantor or any Guarantor denies or disaffirms its
obligations under its Guarantee. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 30% in principal amount
of the then outstanding Securities may declare all the Securities to be
immediately due and payable for an amount equal to 100% of the principal
amount of the Securities plus premium and Liquidated Damages, if any, and
accrued interest to the date of payment, except that in the case of an
Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Securities become due and payable immediately without
further action or notice. Holders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, Holders of a majority in
principal amount of the then outstanding Securities may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default or Event of Default (except a
Default or an Event of Default in payment of principal, premium or
Liquidated Damages, if any, or interest or that resulted from a failure to
comply with Section 4.10 or 4.11 of the Indenture) if and so long as a
committee of its Responsible Officers determines in good faith that
withholding notice is in their interests. The Company must furnish an
annual compliance certificate to the Trustee.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.
13. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or shareholder of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, this
Indenture or the Guarantees or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each
A-5
Holder of the Securities by accepting the Securities waives and releases
all such liability. The waiver and release are part of the consideration
for issuance of the Securities.
14. AUTHENTICATION. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN
ENT (= tenants by the 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).
16. GUARANTORS. Payment of principal, premium and Liquidated
Damages, if any, and interest (including interest on overdue principal of,
premium, if any, and interest, if lawful) is unconditionally guaranteed by
each of the Guarantors.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
PRIMEDIA INC.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Treasurer
A-6
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and transfer
this Security to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Security on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:__________________
Your Signature:________________________________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee.*
----------------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section or 4.10 or 4.11 of the Indenture, check the appropriate box:
|_| Section 4.10 |_| Section 4.11
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 4.10 or 4.11 of the Indenture, state the amount you
elect to have purchased: $______________
Date:__________ Your Signature:________________________________________
(Sign exactly as your name appears on the face of this Security)
Signature Guarantee.*
----------------------------------------
*Signature must be guaranteed by a financial institution that is a member of the
Securities Transfer Agent Medallion Program in accordance with the Securities
Exchange Act of 1934, as amended.
A-8
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
Amount of Amount of Principal Amount
decrease in increase in of this
Principal Principal Global Note
Amount of Amount of following such Signature of
Date of this this decrease Authorized
Exchange Global Note Global Note (or increase) Signatory
X-0
XXXXXXX X-0
[FORM OF NOTATION ON NOTE RELATING TO GUARANTEE]
GUARANTEE
Each of the corporations listed below (hereinafter referred to as the
"Guarantors", which term includes any successor or additional Guarantor under
the Indenture (the "Indenture") referred to in the Security upon which this
notation is endorsed) (i) has jointly and severally, unconditionally guaranteed
that (a) the principal of, and premium, if any, and interest on the Securities
will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of, premium, if
any, and interest on the Securities, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee will be promptly paid
in full or performed, all in accordance with the terms hereof and as set forth
in the Indenture; and (b) in case of any extension of time of payment or renewal
of any Securities or any of such other obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, by acceleration, or otherwise; provided,
however, that the maximum liability of a Guarantor pursuant to this Guarantee
shall in no event exceed the Maximum Guaranteed Amount (as defined below).
Capitalized terms used herein have the meanings assigned to them in the
Indenture unless otherwise indicated.
The "Maximum Guaranteed Amount" means, with respect to any Guarantor, the
amount which allows this Guarantee to be enforceable to the fullest extent
permitted by law, limited only to the extent necessary for this Guarantee to not
constitute a fraudulent conveyance.
The Adjusted Net Worth of a Guarantor as of the Guarantee Date shall mean
the excess of (a) the amount of the fair saleable value of the assets of such
Guarantor as of such date determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors over (b) the
amount of all liabilities of such Guarantor, contingent or otherwise, as of the
Guarantee Date, determined on the basis provided in clause (a) above (excluding
all liabilities under this Guarantee).
No stockholder, officer, director, employer or incorporator, past, present
or future, of the Guarantors, as such, shall have any personal liability under
this Guarantee by reason of his or its status as such stockholder, officer,
director, employer or incorporator.
This Guarantee shall be binding upon each Guarantor and its successors and
assigns and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.
This Guarantee shall not be valid or obligatory for any purpose with
respect to a Security until the certificate of authentication on the Security
upon which this Guarantee is noted shall have been executed by or on behalf of
the Trustee under the Indenture by the manual signature of one of its authorized
signatories.
THE APARTMENT GUIDE OF NASHVILLE, INC.
ARGUS PUBLISHERS CORPORATION
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
ASTN, INC.
A WEP COMPANY
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
CARDINAL BUSINESS MEDIA, INC.
CARDINAL BUSINESS MEDIA HOLDINGS, INC.
CHANNEL ONE COMMUNICATIONS CORPORATION
COVER CONCEPTS MARKETING SERVICES, LLC
A-1-1
CSK PUBLISHING COMPANY INCORPORATED
DAILY RACING FORM, INC.
DATA BOOK, INC.
DRF FINANCE, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FUNK & WAGNALLS YEARBOOK CORPORATION
XXXXXX XXXXXXX, INC.
GO LO ENTERTAINMENT, INC.
XXXXX COMMUNICATIONS, INC.
XXXX PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS CORPORATION
INTELLICHOICE, INC.
INTERMODAL PUBLISHING COMPANY, LTD.
INTERTEC MARKET REPORTS, INC.
INTERTEC PRESENTATIONS, INC.
INTERTEC PUBLISHING CORPORATION
K-III HPC, INC.
K-III PRIME CORPORATION
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LIFETIME LEARNING SYSTEMS, INC.
LITTLE ROCK APARTMENT GUIDE, INC.
XXXXXXX XXXXXXX & ASSOCIATES, INC.
XXXXXXXX ARGUS PUBLISHING, INC.
MEMPHIS APARTMENT GUIDE, INC.
MUSICAL AMERICA PUBLISHING, INC.
XXXXXX INFORMATION, INC.
NEWBRIDGE COMMUNICATIONS, INC.
PARK AVENUE PUBLISHING, INC.
PICTORIAL, INC.
PLAZA COMMUNICATIONS, INC.
PRIMEDIA HOLDINGS III INC.
PRIMEDIA INFORMATION INC.
PRIMEDIA MAGAZINES INC.
PRIMEDIA MAGAZINES FINANCE INC.
PRIMEDIA REFERENCE INC.
PRIMEDIA SPECIAL INTEREST PUBLICATIONS INC.
QWIZ, INC.
R.E.R. PUBLISHING CORPORATION
STRAIGHT DOWN, INC.
SYMBOL OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
TI-IN ACQUISITION CORPORATION
WEEKLY READER CORPORATION
XXXXXXXX COMMUNICATIONS, INC.
XXXXXXXX COMMUNICATIONS MICHIGAN, INC.
A-1-2
XXXXXXXX ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
Name:
Title:
A-1-3
SCHEDULE I
THE APARTMENT GUIDE OF NASHVILLE, INC.
ARGUS PUBLISHERS CORPORATION
AMERICAN HEAT VIDEO PRODUCTIONS, INC.
ASTN, INC.
A WEP COMPANY
BACON'S INFORMATION, INC.
BANKERS CONSULTING COMPANY
CARDINAL BUSINESS MEDIA, INC.
CARDINAL BUSINESS MEDIA HOLDINGS, INC.
CHANNEL ONE COMMUNICATIONS CORPORATION
COVER CONCEPTS MARKETING SERVICES, LLC
CSK PUBLISHING COMPANY INCORPORATED
DAILY RACING FORM, INC.
DATA BOOK, INC.
DRF FINANCE, INC.
THE ELECTRONICS SOURCE BOOK, INC.
EXCELLENCE IN TRAINING CORPORATION
FUNK & WAGNALLS YEARBOOK CORPORATION
XXXXXX XXXXXXX, INC.
GO LO ENTERTAINMENT, INC.
XXXXX COMMUNICATIONS, INC.
XXXX PUBLISHING COMPANIES, INC.
HEALTH & SCIENCES NETWORK, INC.
IDTN LEASING CORPORATION
INDUSTRIAL TRAINING SYSTEMS CORPORATION
INTELLICHOICE, INC.
INTERMODAL PUBLISHING COMPANY, LTD.
INTERTEC MARKET REPORTS, INC.
INTERTEC PRESENTATIONS, INC.
INTERTEC PUBLISHING CORPORATION
K-III HPC, INC.
K-III PRIME CORPORATION
LAW ENFORCEMENT TELEVISION NETWORK, INC.
LIFETIME LEARNING SYSTEMS, INC.
LITTLE ROCK APARTMENT GUIDE, INC.
XXXXXXX XXXXXXX & ASSOCIATES, INC.
XXXXXXXX ARGUS PUBLISHING, INC.
MEMPHIS APARTMENT GUIDE, INC.
MUSICAL AMERICA PUBLISHING, INC.
XXXXXX INFORMATION, INC.
NEWBRIDGE COMMUNICATIONS, INC.
PARK AVENUE PUBLISHING, INC.
PICTORIAL, INC.
PLAZA COMMUNICATIONS, INC.
PRIMEDIA HOLDINGS III INC.
PRIMEDIA INFORMATION INC.
PRIMEDIA MAGAZINES INC.
PRIMEDIA MAGAZINES FINANCE INC.
PRIMEDIA REFERENCE INC.
PRIMEDIA SPECIAL INTEREST PUBLICATIONS INC.
QWIZ, INC.
R.E.R. PUBLISHING CORPORATION
STRAIGHT DOWN, INC.
SYMBOL OF EXCELLENCE PUBLISHERS, INC.
TEL-A-TRAIN, INC.
TI-IN ACQUISITION CORPORATION
WEEKLY READER CORPORATION
XXXXXXXX COMMUNICATIONS, INC.
XXXXXXXX COMMUNICATIONS MICHIGAN, INC.
XXXXXXXX ECI, INC.
WESTERN EMPIRE PUBLICATIONS, INC.
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 7 5/8 Senior Notes Due 2008
Reference is hereby made to the Indenture, dated as of February 17, 1998
(the "Indenture"), between PRIMEDIA Inc., as issuer (the "Company"), and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. |_| Check if Transferee will take delivery of a beneficial interest in the
144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is
being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. |_| Check if Transferee will take delivery of a beneficial interest in the
Regulation S Global Note or a Definitive Note pursuant to Regulation S. The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and, accordingly, the Transferor hereby further
certifies that (i) the Transfer is not being made to a person in the United
States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf
reasonably believed and believes that the Transferee was outside the United
States or (y) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither such Transferor nor any Person
acting on its behalf knows that the transaction was prearranged with a buyer in
the United States, (ii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S
under the Securities Act and, (iii) the transaction is not part of a plan or
scheme to evade the registration requirements of the Securities Act and (iv) if
the proposed transfer is being made prior to the expiration of the Restricted
Period, the transfer is not being made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of
the proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to the
restrictions on Transfer enumerated in the Private Placement Legend printed
B-1
on the Regulation S Global Note, the Temporary Regulation S Global Note and/or
the Definitive Note and in the Indenture and the Securities Act.
3. |_| Check and complete if Transferee will take delivery of a beneficial
interest in a Definitive Note pursuant to any provision of the Securities Act
other than Rule 144A or Regulation S. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Notes and Restricted Definitive Notes and pursuant to and in
accordance with the Securities Act and any applicable blue sky securities laws
of any state of the United States, and accordingly the Transferor hereby further
certifies that (check one):
(a) |_| such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b) |_| such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) |_| such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) |_| such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that the Transfer complies with the transfer
restrictions applicable to Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $100,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on Definitive Notes and in the Indenture and the Securities Act.
4. |_| Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) |_| Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) |_| Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(c) |_| Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Definitive Note will not be subject to the restrictions on transfer enumerated
in the Private Placement Legend printed on the Restricted Global Notes or
Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------
[Insert Name of Transferor]
By:
----------------------------
Name:
Title:
Dated:__________ ,____
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP _____), or
(ii) |_| Regulation S Global Note (CUSIP _____), or
(iii) |_| IAI Global Note (CUSIP_____), or
(b) |_| a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) |_| a beneficial interest in the:
(i) |_| 144A Global Note (CUSIP _____), or
(ii) |_| Regulation S Global Note (CUSIP _____), or
(iii) |_| Unrestricted Global Note (CUSIP _____); or
(b) |_| a Restricted Definitive Note; or
(c) |_| an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 7 5/8 Senior Notes 2008
(CUSIP ________)
Reference is hereby made to the Indenture, dated as of February 17,
1998 (the "Indenture"), between PRIMEDIA Inc., as issuer (the "Company"), and
The Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
____, (the "Owner") owns and proposes to exchange the Note[s] or
interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to beneficial interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the United States Securities Act of
1933, as amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the beneficial
interest in an Unrestricted Global Note is being acquired in compliance with any
applicable blue sky securities laws of any state of the United States.
(b) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) |_| Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and
C-1
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(d) |_| Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a) |_| Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) |_| Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
|_| 144A Global Note, |_| Regulation S Global Note or |_| IAI Global Note with
an equal principal amount, the Owner hereby certifies (i) the beneficial
interest is being acquired for the Owner's own account without transfer and (ii)
such Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
-------------------------------
[Insert Name of Owner]
By:
----------------------------
Name:
Title:
Dated:__________ ,____
C-2
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
PRIMEDIA Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: 7 5/8 Senior Notes Due 2008
Reference is hereby made to the Indenture, dated as of February 17, 1998
(the "Indenture"), between PRIMEDIA Inc., as issuer (the "Company"), and The
Bank of New York, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) |_| a beneficial interest in a Global Note, or
(b) |_| a Definitive Note, we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $100,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the
D-1
proposed sale complies with the foregoing restrictions. We further understand
that the Notes purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein purchased by
us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion and we are acquiring the Notes for investment purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act or other applicable securities law.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
-------------------------------
[Insert Name of Accredited Investor]
By:
----------------------------
Name:
Title:
Dated:__________ ,____
D-2
