ADVANTICA RESTAURANT GROUP, INC.
AND
FIRST TRUST NATIONAL ASSOCIATION, Trustee
Indenture
Dated as of January 7, 1998
------------------------------------
$592,005,000
11-1/4% Senior Notes Due 2008
TABLE OF CONTENTS
Page
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PARTIES........................................................................1
RECITALS
Authorization of Indenture............................................1
Form of Face of Security..............................................1
Form of Reverse of Security...........................................3
Form of Trustee's Certificate of Authentication.......................7
Compliance with Legal Requirements....................................7
Purpose of and Consideration for Indenture............................7
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined....................................8
Acquisition Indebtedness...................8
Adjusted Consolidated Net Worth............8
Affiliate..................................8
Agent ...................................8
Asset Segment..............................8
Bankruptcy Law.............................9
Board of Directors.........................9
Business Day...............................9
Business Segment...........................9
Capital Stock..............................9
Cash Equivalents...........................9
Code ..................................10
Commission................................10
Consolidated Fixed Charges................10
Consolidated Net Income...................10
Consolidated Net Worth....................11
Controlled Corporation EBITDA Amount......11
Corporate Trust Office....................11
Credit Agent..............................11
Credit Agreement..........................11
Default ..................................11
Disqualified Stock........................11
EBITDA ..................................12
Equity Interests..........................12
Event of Default..........................12
Excluded Property.........................12
Existing Indebtedness.....................12
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Fixed Charge Coverage Ratio...............12
FRD ..................................12
FRD Investment............................12
Xxxxxx, holder of Securities,
securityholder........................13
Indebtedness..............................13
Indenture.................................13
Interest Rate Agreement...................13
Investment................................13
Issuer ..................................13
Lien ..................................13
Mortgage Financing........................13
Mortgage Financing Proceeds...............13
Mortgage Refinancing......................14
Mortgage Refinancing Proceeds.............14
Net Income................................14
Net Proceeds..............................14
Obligations...............................14
OECD ..................................14
Officers' Certificate.....................15
Opinion of Counsel........................15
Outstanding...............................15
Permitted Investments.....................15
Plan ..................................15
Preferred Stock...........................16
principal.................................16
Remaining Section 355 Amount..............16
Responsible Officer.......................16
Restricted Investments....................16
Section 355 Percentage....................16
Section 355 Transaction...................16
Security or Securities....................17
Senior Indebtedness.......................17
Significant Subsidiary....................17
Specified Issuer EBITDA...................17
Subsidiary................................17
Trustee ..................................17
Trust Indenture Act of 1939...............17
Unrestricted Subsidiary...................18
Weighted Average Life to Maturity.........18
ARTICLE TWO
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities..........18
SECTION 2.2 Execution of Securities............................18
SECTION 2.3 Certificate of Authentication......................19
ii
SECTION 2.4 Form, Denomination and Date of Securities; Payments
of Interest....................................19
SECTION 2.5 Registration, Transfer and Exchange................20
SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities.....................................21
SECTION 2.7 Cancellation of Securities; Destruction Thereof....21
SECTION 2.8 Temporary Securities...............................21
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.1 Payment of Principal and Interest..................22
SECTION 3.2 Offices for Payments, etc..........................22
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee........................................22
SECTION 3.4 Paying Agents......................................22
SECTION 3.5 Certificates to Trustee............................23
SECTION 3.6 Securityholder Lists...............................23
SECTION 3.7 Reports by the Issuer..............................24
SECTION 3.8 Reports by the Trustee.............................24
SECTION 3.9 Limitation on Restricted Payments..................24
SECTION 3.10 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries........... 27
SECTION 3.11 Limitation on Additional Indebtedness and Issuance
of Disqualified Stock..........................28
SECTION 3.12 Limitation on Transactions with Affiliates.........29
SECTION 3.13 Sale of Assets.....................................30
SECTION 3.14 Corporate Existence................................31
SECTION 3.15 Limitation on Liens................................32
SECTION 3.16 Issuer to Cause Certain Subsidiaries to Become
Guarantors.....................................33
SECTION 3.17 Investments in Unrestricted Subsidiaries...........34
SECTION 3.18 Offer to Redeem Upon Change of Control.............34
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.1 Events of Default..................................35
SECTION 4.2 Acceleration.......................................37
SECTION 4.3 Other Remedies.....................................38
SECTION 4.4 Waiver of Defaults.................................38
SECTION 4.5 Control by Majority................................38
SECTION 4.6 Limitation on Suits................................38
SECTION 4.7 Rights of Holders to Receive Payment...............39
SECTION 4.8 Collection Suit by Trustee.........................39
SECTION 4.9 Trustee May File Proofs of Claim...................39
SECTION 4.10 Priorities.........................................40
SECTION 4.11 Undertaking for Costs..............................40
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ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default......................40
SECTION 5.2 Certain Rights of the Trustee......................41
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds
Thereof........................................42
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc...............................42
SECTION 5.5 Moneys Held by Trustee.............................42
SECTION 5.6 Compensation and Indemnification of Trustee and
Its Prior Claim................................43
SECTION 5.7 Right of Trustee to Rely on Officers'
Certificate, etc...............................43
SECTION 5.8 Persons Eligible for Appointment as Trustee........43
SECTION 5.9 Resignation and Removal; Appointment of Successor
Trustee........................................43
SECTION 5.10 Acceptance of Appointment by Successor Trustee.....44
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business of Trustee.........................45
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Securityholders........45
SECTION 6.2 Proof of Execution of Instruments and of Holding
of Securities: Record Date.....................46
SECTION 6.3 Holders to Be Treated as Owners....................46
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding..46
SECTION 6.5 Right of Revocation of Action Taken................47
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders................................47
SECTION 7.2 Supplemental Indentures With Consent of
Securityholders................................48
SECTION 7.3 Effect of Supplemental Indenture...................49
SECTION 7.4 Documents to Be Given to Trustee...................49
SECTION 7.5 Notation on Securities in Respect of Supplemental
Indentures.....................................49
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 When Issuer May Merge, etc.........................49
SECTION 8.2 Successor Corporation Substituted..................50
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ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS; DEFEASANCE
SECTION 9.1 Satisfaction and Discharge of Indenture............51
SECTION 9.2 Application by Trustee of Funds Deposited for
Payment of Securities..........................51
SECTION 9.3 Repayment of Moneys Held by Paying Agent...........51
SECTION 9.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years......................51
SECTION 9.5 Defeasance.........................................52
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and Directors
of Issuer Exempt from Individual Liability.....53
SECTION 10.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders....................53
SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture......................................53
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders................................53
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein.............54
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays....55
SECTION 10.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939..........................55
SECTION 10.8 New York Law to Govern.............................55
SECTION 10.9 Counterparts.......................................55
SECTION 10.10 Effect of Headings.................................55
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption.......................55
SECTION 11.2 Notice of Redemption; Partial Redemptions..........56
SECTION 11.3 Payment of Securities called for Redemption........56
SECTION 11.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption...................57
SECTION 11.5 Offer to Redeem by Application of Net Proceeds.....57
SECTION 11.6 Provisions Governing Redemption Pursuant to
Change of Control Offer........................58
v
THIS INDENTURE, dated as of January 7, 1998 between Advantica
Restaurant Group, Inc., a Delaware corporation (the "Issuer"), and First Trust
National Association, as Trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue of its
11-1/4% Senior Notes Due 2008 (the "Securities") and, to provide, among other
things, for the authentication, delivery and administration thereof, the Issuer
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Securities and the Trustee's certificate of
authentication shall be in substantially the following form:
[FORM OF FACE OF SECURITY]
No. $
------ --------------------
ADVANTICA RESTAURANT GROUP, INC.
11-1/4% Senior Notes Due 2008
Advantica Restaurant Group, Inc., a Delaware corporation (the
"Issuer"), for value received hereby promises to pay to or registered assigns
the principal sum of Dollars at the Issuer's office or agency for said purpose
on January 15, 2008 in such coin or currency of the United States of America as
at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest, semi-annually on January 15 and July 15 of
each year, on said principal sum in like coin or currency at the rate per annum
set forth above at said office or agency from the January 15 or the July 15, as
the case may be, next preceding the date of this Security to which interest on
the Securities has been paid or duly provided for, unless the date hereof is a
date to which interest on the Securities has been paid or duly provided for, in
which case from the date of this Security, or unless no interest has been paid
or duly provided for on the Securities, in which case from January 8, 1998 until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after January 1 or July 1,
as the case may be, and before the following January 15 or July 15 this Security
shall bear interest from such January 15 or July 15; provided that if the Issuer
shall default in the payment of interest due on such January 15 or July 15, then
this Security shall bear interest from the next preceding January 15 or July 15
to which interest on the Securities has been paid or duly provided for, or, if
no interest has been paid or duly provided for on the Securities, from January
8, 1998. The interest so payable on any January 15 or July 15 will, except as
otherwise provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Security is registered at the close of business
on the January 1 or July 1 preceding such January 15 or July 15, whether or not
such day is a business day; provided that interest may be paid, at the option of
the Issuer, by mailing a check therefor payable to the registered holder
entitled thereto at his last address as it appears on the Security register or
by wire transfer to such holder.
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Reference is made to the further provisions set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Security shall not be valid or obligatory until the
certificate of authentication hereon shall have been duly signed by the Trustee
acting under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be duly executed under its corporate seal.
Dated:
[Seal]
--------------------------------------
--------------------------------------
2
[FORM OF REVERSE OF SECURITY]
Advantica Restaurant Group, Inc.
11-1/4% Senior Notes Due 2008
This Security is one of a duly authorized issue of debt
securities of the Issuer, limited to the aggregate principal amount of
$592,005,000 (except as otherwise provided in the Indenture mentioned below),
issued or to be issued pursuant to an indenture dated as of January 7, 1998 (the
"Indenture"), duly executed and delivered by the Issuer to First Trust National
Association, as Trustee (herein called the "Trustee"). Reference is hereby made
to the Indenture and all indentures supplemental thereto for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Securities.
If an Event of Default, as defined in the Indenture, shall
have occurred and be continuing, the Trustee or the holders of at least 30% (or
25% in the case of a default with respect to payment of principal of, premium,
if any, or interest on the Securities) in principal amount of the then
outstanding Securities may declare the principal amount of the Securities to be
due and payable immediately; provided, however, that if any Senior Indebtedness
(as defined in the Indenture) is outstanding pursuant to the Credit Agreement
(as defined in the Indenture), upon a declaration of acceleration, such
principal and interest shall be payable upon the earlier of (x) the day that is
five Business Days after the provision to the Issuer and the Credit Agent (as
defined in the Indenture) of such written notice unless such Event of Default
has been cured or waived prior to such date and (y) the date of acceleration of
any Senior Indebtedness under the Credit Agreement. 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.
The Indenture provides that in certain events a declaration of acceleration and
its consequences may be waived by the holders of a majority in aggregate
principal amount of the Securities then outstanding and that the holders of a
majority in aggregate principal amount of the Securities then outstanding may
waive any default under the Indenture and its consequences except a default in
the payment of principal of, premium, if any, or interest on any of the
Securities. Any such consent or waiver by the holder of this Security (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Security and any Security
which may be issued in exchange or substitution herefor, whether or not any
notation thereof is made upon this Security or such other Securities.
The Indenture permits the Issuer and the Trustee, with the
consent of the holders of not less than a majority in aggregate principal amount
of the Securities at the time outstanding, evidenced as in the Indenture
provided, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
holders of the Securities; provided that no such supplemental indenture shall
(a) extend the final maturity of any Security, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce the premium, if any, payable thereon, or reduce any amount payable on
the redemption thereof or impair or affect the rights of any securityholder to
institute suit for the payment thereof, or waive a default in the payment of
principal of, premium, if any, or interest on any Security, change the currency
of payment of principal of, premium, if any, or interest on any Security, or
modify any provision in the Indenture with respect to the priority
3
of the Securities in right of payment without the consent of the holder of each
Security so affected; or (b) reduce the aforesaid percentage of Securities, the
consent of the holders of which is required for any such supplemental indenture,
without the consent of the holders of all Securities then outstanding.
The Securities are senior unsecured obligations of the Issuer
and will rank pari passu in right of payment to all Senior Indebtedness.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Security at the place, times, and rate, and in the
currency, herein prescribed.
The Securities are issuable only as registered Securities
without coupons in denominations of $1,000 and any multiple of $1,000 except as
otherwise required in order to effect the issuance of the Securities pursuant to
the Indenture in accordance with the terms of the Plan (as defined in the
Indenture).
At the office or agency of the Issuer referred to on the face
hereof and in the manner and subject to the limitations provided in the
Indenture, Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations.
Upon due presentment for registration of transfer of this
Security at the above-mentioned office or agency of the Issuer, a new Security
or Securities of authorized denominations, for a like aggregate principal
amount, will be issued to the transferee as provided in the Indenture.
Securities may be presented for registration of transfer in part only in
multiples of $1,000. No service charge shall be made for any such transfer, but
the Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
The Securities may not be redeemed, either in whole or in
part, prior to January 15, 2003. On and after January 15, 2003, the Securities
will be redeemable, in whole or in part, at the option of the Issuer, at the
redemption prices (expressed as percentages of the principal amount) set forth
below, plus accrued and unpaid interest, if any, to the redemption date, if
redeemed during the 12-month period beginning January 15 of the years indicated
below:
Year Percentage
2003..........................................................105.625%
2004..........................................................103.750%
2005..........................................................101.875%
2006 and thereafter...........................................100.000%
provided that, if the dated fixed for redemption is January 15 or July 15, then
the interest payable on such date shall be paid to the holder of record on the
next preceding January 1 or July 1.
Notwithstanding the foregoing, from January 15, 1998 until
January 15, 2001, the Issuer may redeem up to 35% of the aggregate principal
amount of Securities outstanding on the date of the Indenture at a redemption
price (expressed as a percentage of the principal amount) of 110%, plus
4
accrued and unpaid interest, if any, to the redemption date from the net
proceeds of any public offering for cash of any equity securities of the Issuer
or any subsidiary thereof.
Notice of redemption shall be mailed at least 30 and not more
than 60 days prior to the date fixed for redemption to each holder of Securities
to be redeemed at his registered address. Securities may be redeemed in part
only in multiples of $1,000.
Subject to the terms of the Indenture, if the Issuer
consummates any Asset Sale or sells a Business Segment (as such terms are
defined in the Indenture), the Issuer shall be obligated to apply the net
proceeds thereof to one or more of the following in such combination as the
Issuer may choose: (i) an investment in another asset or business in the same
line of business as, or a line of business similar to that of, the Issuer and
its Subsidiaries, provided such investment occurs within 366 days of such Asset
Sale or sale of a Business Segment, (ii) an offer, expiring within 366 days of
such Asset Sale or such sale of a Business Segment, to redeem Securities at a
redemption price not less than 100% of the principal amount thereof plus accrued
and unpaid interest, if any, to the redemption date (a "Net Proceeds Offer") or
(iii) the prepayment of outstanding Senior Indebtedness within 366 days of such
Asset Sale or sale of a Business Segment; provided, however, that if the net
amount not invested pursuant to clause (i) or applied pursuant to clause (iii)
above to the prepayment of Senior Indebtedness is less than $15,000,000, the
Issuer shall not be further obligated to offer to redeem Securities pursuant to
clause (ii) above. Holders of Securities which are the subject of an offer to
redeem shall receive an offer to redeem from the Issuer prior to any related
redemption date, and may elect to have such Securities redeemed by completing
the form entitled "Option of Holder to Elect to Have Security Redeemed"
appearing below. Notwithstanding any provision of the Indenture to the contrary,
the Issuer may, for a period of 120 days after the last date on which holders of
Securities are permitted to elect to have their Securities redeemed in a Net
Proceeds Offer, use any Net Proceeds that were available to make such Net
Proceeds Offer but not used to redeem Securities pursuant thereto, to purchase,
redeem or otherwise acquire or retire for value securities of the Issuer ranking
junior in right of payment to the Securities at a price, stated as a percentage
of the principal or face amount of such junior securities, not greater than the
price, stated as a percentage of the principal amount of the Securities, offered
in the Net Proceeds Offer; provided that if the Net Proceeds Offer is for a
principal amount (the "Net Proceeds Offer Amount") of the Securities less than
the aggregate principal amount of the Securities then outstanding, then the Net
Proceeds available for use by the Issuer for such a purchase, redemption or
other acquisition or retirement for value of junior securities shall not exceed
the Net Proceeds Offer Amount.
Subject to payment by the Issuer (by deposit with the Trustee
or otherwise) of a sum sufficient to pay the amount due on redemption, interest
on this Security (or portion hereof if this Security is redeemed in part) shall
cease to accrue upon the date duly fixed for redemption of this Security (or
portion hereof if this Security is redeemed in part) and all rights of the
holder with respect to such redeemed Security (or portion thereof if this
Security is redeemed in part) hereunder or under the Indenture, except the right
to payment of amounts payable on such redemption, shall cease.
The Issuer, the Trustee, and any authorized agent of the
Issuer or the Trustee, may deem and treat the registered holder hereof as the
absolute owner of this Security (whether or not this Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Issuer or the Trustee or any authorized agent of the
Issuer or the Trustee), for the purpose of receiving payment of, or on account
of, the principal hereof and premium, if any, and, subject to the provisions on
the face hereof, interest hereon and for all other purposes, and neither the
Issuer nor the
5
Trustee nor any authorized agent of the Issuer or the Trustee shall be affected
by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or premium, if any, or the interest on this Security, for any claim based
hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Issuer or of any successor corporation, either directly or through the Issuer or
any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
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[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities described in the
within-mentioned Indenture.
First Trust National Association, as Trustee
--------------------------------------
Authorized Signatory
OPTION OF HOLDER TO ELECT TO HAVE SECURITY REDEEMED
If you have received a Net Proceeds Offer from the Issuer and
want to elect to have this Security redeemed by the Issuer pursuant to Section
11.5 of the Indenture, check the box: [ ]
If you have received a Change of Control Offer from the Issuer
and want to elect to have this Security redeemed by the Issuer pursuant to
Section 3.18 of the Indenture, check the box: [ ]
If you want to elect to have any part of this Security
redeemed by the Issuer pursuant to Section 3.18 of the Indenture, state the
amount: $_______________
Date:_________________ Your Signature: ______________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:_____________________________
AND WHEREAS, all things necessary to make the Securities, when
executed by the Issuer and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of the Issuer, and
to constitute these presents a valid indenture and agreement according to its
terms, have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the respective holders from
time to time of the Securities as follows:
7
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following terms (except
as otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section. All other
terms used in this Indenture which are defined in the Trust Indenture Act of
1939 or the definitions of which in the Securities Act of 1933 are referred to
in the Trust Indenture Act of 1939 (except as herein otherwise expressly
provided or unless the context otherwise clearly requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of this Indenture. All accounting terms
used herein and not expressly defined shall have the meanings given to them in
accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" shall mean such accounting principles
which are generally accepted at the date or time of any computation or at the
date hereof. The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The terms defined in this Article include
the plural as well as the singular.
"Acquisition Indebtedness" means Indebtedness of any person
existing at the time such person becomes a Subsidiary of the Issuer (or at the
time such person is merged with or into a Subsidiary of the Issuer), excluding
Indebtedness of any Subsidiary of the Issuer (other than such person) incurred
in connection with, or in contemplation of, such person becoming a Subsidiary of
the Issuer.
"Adjusted Consolidated Net Worth" with respect to the Issuer
means, as of any date, the Consolidated Net Worth of the Issuer plus (i) the
respective amounts reported on the Issuer's most recent consolidated balance
sheet with respect to any preferred stock (other than Disqualified Stock) that
by its terms is not entitled to the payment of dividends unless such dividends
may be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by the
Issuer upon issuance of such preferred stock or of securities converted into
such preferred stock, excluding (ii) any amount reflecting any equity adjustment
resulting from a foreign currency translation on a consolidated balance sheet of
the Issuer, but only to the extent not excluded in calculating Consolidated Net
Worth of the Issuer, plus (iii) any gain realized upon the sale or other
disposition of any Business Segments to the extent such gains do not exceed the
sum of the aggregate amount of any losses included (on a net after tax basis) in
the computation of Consolidated Net Worth, plus (iv) transaction fees and
expenses related to the Plan or any related transactions including amortization
thereof, but only to the extent such fees and expenses were included in
calculating Consolidated Net Worth of the Issuer.
"Affiliate" means any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer. For the purposes of this definition, beneficial ownership of 10% or more
of the voting common equity of a person shall be deemed to be control unless
ownership of a lesser amount may be deemed to be control under the Trust
Indenture Act.
"Agent" means any registrar, paying agent or co-registrar for
the Securities.
"Asset Segment" means (i) Denny's Holdings, Inc., (ii) Spartan
Holdings, Inc., (iii) FRD, or (iv) any Subsidiary, group of Subsidiaries or
group of assets (other than inventory held for sale in the
8
ordinary course of business) of the Issuer or its Subsidiaries which (A)
accounts for at least 20 percent of the total assets of the Issuer and its
Subsidiaries on a consolidated basis as of the end of the last fiscal quarter
immediately preceding the date for which such determination is being made or (B)
accounts for at least 20 percent of the income from continuing operations before
income taxes, extraordinary items and cumulative effects of changes in
accounting principles of the Issuer and its Subsidiaries on a consolidated basis
for the four full fiscal quarters immediately preceding the date for which such
calculation is being made.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means either the Board of Directors of
the Issuer or any committee of such Board duly authorized to act hereunder.
"Business Day" means a day which, in the city (or in any of
the cities if more than one) where amounts are payable in respect of the
Securities, as specified on the face of the form of Security recited above, is
neither a legal holiday nor a day on which banking institutions are authorized
by law or regulation to close.
"Business Segment" means (i) each of the Issuer's Significant
Subsidiaries, (ii) the capital stock of any of the Issuer's Subsidiaries or
(iii) any group of assets of the Issuer or any Subsidiary whether now owned or
hereafter acquired, provided, in each case, that the sale (other than the sale
of inventory in the ordinary course of business), lease, conveyance or other
disposition of such Significant Subsidiary, capital stock or group of assets, as
the case may be, either in a single transaction or group of related transactions
that are part of a common plan, results in Net Proceeds to the Issuer and its
Subsidiaries of $50 million or more.
"Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit with a maturity date not more than one year from the
date of acquisition issued by any domestic commercial bank of recognized
standing having capital and surplus in excess of $500,000,000 or a commercial
bank organized under the laws of any other country that is a member of the OECD
and having total assets in excess of $500,000,000 with a maturity date of not
more than one year from the date of acquisition, (iii) repurchase obligations
with a term of not more than 7 days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
the parent corporation of any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 and commercial paper issued
by others rated at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. and in each case maturing within one year after the date of
acquisition and (v) investments in money market funds substantially all of whose
assets comprise securities of the types described in clauses (i) through (iv)
above.
9
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time.
"Commission" means the Securities and Exchange Commission.
"Consolidated Fixed Charges" means, with respect to any person
for a given period, consolidated interest expense of such person and its
consolidated Subsidiaries to the extent deducted in computing Consolidated Net
Income (including, without limitation, amortization of original issue discount
and non-cash interest payments, all net payments and receipts in respect of
Interest Rate Agreements and the interest component of capital leases, but
excluding deferred financing costs existing immediately after the date hereof or
incurred in connection with the Plan and amortization thereof) plus the amount
of all cash dividend payments on any series of preferred stock of such person;
provided 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 Issuer and its
Subsidiaries, sales of the Capital Stock of, or any assets of, Unrestricted
Subsidiaries), Consolidated Fixed Charges of such person and its Subsidiaries
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 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 and its Subsidiaries shall
be calculated on a pro forma basis 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; and provided further, that in the case of the Issuer, if the
closing of any aspect of the Plan occurred during such period, Consolidated
Fixed Charges of the Issuer and its Subsidiaries for such period shall be
calculated on a pro forma basis as if such closing (including the incurrence of
any Indebtedness in connection with such closing and the application of the
proceeds thereof) took place on the first day of such period.
"Consolidated Net Income" with respect to any person (the
"Subject Person") means, for a given period, the aggregate of the Net Income of
such Subject Person and its Subsidiaries for such period, on a consolidated
basis, determined in accordance with generally accepted accounting principles,
provided that (i) the Net Income of any person that is not a Subsidiary of the
Subject Person or is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid to
the Subject Person and its Subsidiaries, (ii) the Net Income of any person that
is a Subsidiary (other than a Subsidiary of which at least 80% of the capital
stock having ordinary voting power for the election of directors or other
governing body of such Subsidiary is owned by the Subject Person directly or
indirectly through one or more Subsidiaries) shall be included only to the
extent of the lesser of (a) the amount of dividends or distributions paid to the
Subject Person and its Subsidiaries and (b) the Net Income of such person, (iii)
the Net Income of any person acquired by the Subject Person and its Subsidiaries
in a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded and (iv) the Net Income (if positive) of any
person that becomes a Subsidiary of the Issuer after the date hereof shall be
included only to the extent that the declaration or payment of dividends on
Capital Stock or similar distributions by that Subsidiary to the Issuer or to
any other consolidated Subsidiary of the Issuer of such Net Income is at the
time permitted under the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations binding
upon or applicable to that Subsidiary, provided that if the exclusion
10
from an otherwise positive Net Income of certain amounts pursuant to this clause
(iv) would cause such Net Income to be negative, then such Net Income shall be
deemed to be zero.
"Consolidated Net Worth" means, with respect to any person, at
any date of determination, the sum of the Capital Stock and additional paid-in
capital plus retained earnings (or minus accumulated deficit) of such person and
its Subsidiaries on a consolidated basis, each item to be determined in
conformity with generally accepted accounting principles (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.
"Controlled Corporation EBITDA Amount" means, for any
Controlled Corporation securities of which have been distributed in a Section
355 Transaction, the EBITDA of the Controlled Corporation for the four full
fiscal quarters of the Issuer last preceding the date such Section 355
Transaction is effected.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular time,
be principally administered, which office is, at the date as of which this
Indenture is dated, located at 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, XX 00000.
"Credit Agent" means The Chase Manhattan Bank, as managing
agent (or in a similar capacity) under the Credit Agreement, or any successor
thereto; provided that "Credit Agent" shall also mean any person acting as
managing agent (or in a similar capacity) under any agreement pursuant to which
the Credit Agreement is refunded or refinanced if such person is designated as
such by each person that is at the time of such designation a Credit Agent; and
provided further that if at any time there shall be more than one Credit Agent,
then "Credit Agent" shall mean each such Credit Agent, and any notice, consent
or waiver to be given by, action to be taken by, or notice to be given to, the
Credit Agent shall be given or taken by, or given to, each such Credit Agent.
"Credit Agreement" means the Credit Agreement dated as of the
date hereof among Denny's, Inc., El Pollo Loco, Inc., Flagstar Enterprises,
Inc., Flagstar Systems, Inc. and Quincy's Restaurants, Inc., as borrowers, the
Issuers as a guarantor, the lenders named therein, and The Chase Manhattan Bank,
as administrative agent, including any and all related notes, collateral and
security documents, instruments and agreements executed in connection therewith
(including, without limitation, all Loan Documents (as defined in such Credit
Agreement)) and all obligations of the Issuer and its Subsidiaries incurred
thereunder or in respect thereof, and in each case as amended, supplemented,
restructured or otherwise modified, extended or renewed and each other agreement
pursuant to which any or all of the foregoing may be refunded or refinanced,
from time to time.
"Default" means any event that is, or after notice or passage
of time would be, an Event of Default.
"Disqualified Stock" means any capital stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to the maturity date of the Securities.
11
"EBITDA" means, with respect to any person and its
consolidated Subsidiaries for a given period, the Consolidated Net Income of
such person for such period plus (i) an amount equal to any net loss realized
upon the sale or other disposition of any Business Segment (to the extent such
loss was deducted in computing Consolidated Net Income), (ii) any provision for
taxes based on income or profits deducted in computing Consolidated Net Income
and any provision for taxes utilized in computing net loss under clause (i)
hereof, (iii) consolidated interest expense (including amortization of original
issue discount and noncash interest payments, all net payments and receipts in
respect of Interest Rate Agreements and the interest component of capital
leases) and (iv) depreciation and amortization (including amortization of
goodwill, deferred financing costs existing immediately after the date hereof or
incurred in connection with the Plan and other intangibles) to the extent
required under generally accepted accounting principles, all on a consolidated
basis; provided 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
Issuer and its Subsidiaries, sales of the Capital Stock of, or any assets of,
Unrestricted Subsidiaries), EBITDA of such person and its Subsidiaries for such
period shall be reduced by an amount equal to the EBITDA directly attributable
to the assets which are the subject of such asset sales for such period and (B)
such person or any of its 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, EBITDA of such person
and its Subsidiaries shall be calculated, excluding any expenses which in the
good faith estimate of management will be eliminated as a result of such
acquisition, on a pro forma basis 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; and provided, further that in the case of the Issuer, if the
closing of any aspect of the Plan occurred during such period, EBITDA of the
Issuer and its Subsidiaries for such period shall be calculated on a pro forma
basis as if such closing (including the incurrence of any Indebtedness in
connection with such closing and the application of the proceeds thereof) took
place on the first day of such period.
"Equity Interests" means Capital Stock or warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into or exchangeable for Capital Stock).
"Event of Default" means any event or condition specified as
such in Section 4.1 which shall have continued for the period of time, if any,
therein designated.
"Excluded Property" means the Issuer's corporate headquarters
property in Spartanburg, South Carolina.
"Existing Indebtedness" means Indebtedness of the Issuer or
any subsidiary existing on the date hereof.
"Fixed Charge Coverage Ratio" means, with respect to any
person, for a given period, the ratio of the EBITDA of such person for such
period to the Consolidated Fixed Charges of such person for such period.
"FRD" means FRD Acquisition Co., a Delaware corporation.
"FRD Investment" means up to $75,000,000 of Investments by the
Issuer and its Subsidiaries in FRD as an Unrestricted Subsidiary.
12
"Holder", "holder of Securities", "securityholder" or other
similar terms means the registered holder of any Security.
"Indebtedness" with respect to any person means at any date,
without duplication, (i) all obligations of such person for borrowed money, (ii)
all obligations of such person evidenced by bonds, debentures, notes or other
similar instruments other than Interest Rate Agreements, (iii) all reimbursement
obligations and other liabilities of such person with respect to letters of
credit issued for such person's account, (iv) all obligations of such person to
pay the deferred purchase price of property or services, except accounts payable
arising in the ordinary course of business, (v) all obligations of such person
as lessee in respect of capital lease obligations under capital leases and (vi)
all obligations of others of a nature described in any of clauses (i) through
(v) above guaranteed by such person; provided that in the case of clauses (i)
through (v) above, Indebtedness shall include only obligations reported as
liabilities in the financial statements of such person in accordance with
generally accepted accounting principles.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge arrangement to or under which the
Issuer or any of its subsidiaries is or becomes a party or a beneficiary.
"Investment" means any direct or indirect advance (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),
loan 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.
"Issuer" means (except as otherwise provided in Article Five)
Advantica Restaurant Group, Inc., a Delaware corporation and, subject to Article
Eight, its successors and assigns.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
capital lease, any option or other agreement to sell and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Mortgage Financing" means the incurrence by the Issuer or a
Subsidiary of the Issuer of any Indebtedness secured by a mortgage or other Lien
on real property acquired or improved by the Issuer or any Subsidiary of the
Issuer after the date hereof.
"Mortgage Financing Proceeds" means, with respect to any
Mortgage Financing, the aggregate amount of cash proceeds received or receivable
by the Issuer or any Subsidiary of the Issuer in connection with such financing
after deducting therefrom brokerage commissions, legal fees, finder's fees,
closing costs and other expenses incidental to such Mortgage Financing and the
amount of taxes payable in connection with or as a result of such transaction,
to the extent, but only to the extent, that
13
the amounts so deducted are, at the time of receipt of such cash, actually paid
to a person that is not an Affiliate and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Mortgage Refinancing" means the incurrence by the Issuer or a
Subsidiary of the Issuer of any Indebtedness secured by a mortgage or other Lien
on real property subject to a mortgage or other Lien existing on the date hereof
or created or incurred subsequent to the date hereof as permitted hereby and
owned by the Issuer or any Subsidiary of the Issuer.
"Mortgage Refinancing Proceeds" means, with respect to any
Mortgage Refinancing, the aggregate amount of cash proceeds received or
receivable by the Issuer or any Subsidiary of the Issuer in connection with such
refinancing after deducting therefrom the original mortgage amount of the
underlying indebtedness refinanced therewith and brokerage commissions, legal
fees, finder's fees, closing costs and other expenses incidental to such
Mortgage Refinancing and the amount of taxes payable in connection with or as a
result of such transaction, to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, actually paid to a
person that is not an Affiliate and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" of any person shall mean the net income (loss) of
such person, determined in accordance with generally accepted accounting
principles, excluding, however, (i) any gain or loss, together with any related
provision for taxes on such gain or loss, realized upon the sale or other
disposition (including, without limitation, dispositions pursuant to sale and
leaseback transactions) of a Business Segment, (ii) any charges arising as a
result of the Plan, and (iii) any gain or loss realized upon the sale or other
disposition by such person of any capital stock or marketable securities.
"Net Proceeds" with respect to any Asset Sale, sale and
leaseback transaction or sale or other disposition of a Business Segment, means
(i) cash (freely convertible into U.S. dollars) received by the Issuer or any
Subsidiary from such transaction, after (a) provision for all income or other
taxes measured by or resulting from such transaction, (b) payment of all
brokerage commissions and other expenses (including, without limitation, the
payment of principal, premium (if any) and interest on Indebtedness required
(other than pursuant to Section 3.13(a)) to be paid as a result of such
transaction) in connection with such transaction and (c) deduction of
appropriate amounts to be provided by the Issuer as a reserve, in accordance
with generally accepted accounting principles, against any liabilities
associated with the asset disposed of in such transaction and retained by the
Issuer after such sale or other disposition thereof, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction and (ii) promissory notes received
by the Issuer or any Subsidiary of the Issuer in connection with such
transaction upon the liquidation or conversion of such notes into cash.
"Obligations" means, with respect to any Indebtedness or any
Interest Rate Agreement, any principal, premium, interest (including, without
limitation, interest, whether or not allowed, after the filing of a petition
initiating certain bankruptcy proceedings), penalties, commissions, charges,
expenses, fees, indemnifications, reimbursements and other liabilities or
amounts payable under or in respect of the documentation governing such
Indebtedness or such Interest Rate Agreement.
"OECD" means the Organization for Economic Cooperation and
Development.
14
"Officers' Certificate" means a certificate signed by the
Chairman of the Board of Directors or the President or any Vice President
(whether or not designated by a number or numbers or a word or words added
before or after the title "Vice President") and by the Treasurer or the
Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee.
Each such certificate shall comply with Section 314 of the Trust Indenture Act
of 1939 and include the statements provided for in Section 10.5.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel who may be an employee of or counsel to the Issuer. Each such
opinion shall comply with Section 314 of the Trust Indenture Act and include the
statements provided for in Section 10.5, if and to the extent required hereby.
"Outstanding", when used with reference to securities, shall,
subject to the provisions of Section 6.4, mean, as of any particular time, all
Securities authenticated and delivered by the Trustee under this Indenture,
except
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Issuer) or shall have been set aside, segregated and held in
trust by the Issuer (if the Issuer shall act as its own paying agent);
provided that if such Securities are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as
herein provided, or provision satisfactory to the Trustee shall have
been made for giving such notice; and
(c) Securities in substitution for which other Securities
shall have been authenticated and delivered, or which shall have been
paid, pursuant to the terms of Section 2.6 (unless proof satisfactory
to the Trustee is presented that any of such Securities is held by a
person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
"Permitted Investments" means (i) cash (including major
foreign currency or currency of a country in which the Issuer or any of its
Subsidiaries has operations) or Cash Equivalents, (ii) investments that are in
persons at least a majority of whose revenues are derived from food service
operations, ancillary operations or related activities and that have the purpose
of furthering the food service operations of the Issuer or any of its
Subsidiaries, (iii) advances to employees not in excess of $5,000,000 at any one
time outstanding, (iv) accounts receivable created or acquired in the ordinary
course of business, (v) obligations or shares of stock received in connection
with any good faith settlement or bankruptcy proceeding involving a claim
relating to a Permitted Investment, (vi) evidences of Indebtedness, obligations
or other investments not exceeding $5,000,000 in the aggregate held at any one
time by the Issuer or any of its Subsidiaries and (vii) currency swap agreements
and other similar agreements designed to hedge against fluctuations in foreign
exchange rates entered into in the ordinary course of business in connection
with the operation of the business.
"Plan" means the plan of reorganization of Flagstar Companies,
Inc. and Flagstar Corporation, as predecessors to the Issuer pursuant to Chapter
11 of Title II of the United States Code
15
as confirmed by the United States Bankruptcy Court for the District of South
Carolina by order entered by such court on November 12, 1997.
"Preferred Stock" means, with respect to any person, any and
all shares, interests, participations or other equivalents (however designated)
of such person's preferred or preference stock whether now outstanding or issued
after the date of the Indenture.
"principal" wherever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium, if
any".
"Remaining Section 355 Amount" means at any time an amount
equal to (i) 30% of the Specified Issuer EBITDA less (ii) the sum of the
Controlled Corporation EBITDA Amounts for the Controlled Corporations in each
Section 355 Transaction effected by the Issuer prior to such time.
"Responsible Officer" when used with respect to the Trustee
means the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any vice
president (whether or not designated by numbers or words added before or after
the title "vice president"), the cashier, the secretary, the treasurer, any
trust officer, any assistant trust officer, any assistant vice president, any
assistant cashier, any assistant secretary, any assistant treasurer, or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Investments" means any investments in, capital
contributions, loans or advances to or purchases of equity interests in, any
person that is not a wholly owned subsidiary, or other transfers of assets to
Subsidiaries or Affiliates that are not wholly owned (other than any such other
transfers of assets to Subsidiaries or Affiliates that are not wholly owned in
transactions the terms of which are fair and reasonable to the transferor and
are at least as favorable as the terms that could be obtained by the transferor
in a comparable transaction made on an arm's length basis between unaffiliated
parties (as conclusively determined, for any such transfer involving aggregate
consideration in excess of $5 million, by a majority of the directors of the
Issuer unaffiliated with such Subsidiary or Affiliate or, if there are no such
directors, by a majority of the directors of the Issuer, and otherwise as
conclusively determined by the Issuer), except in each case for Permitted
Investments and any such investments existing on the date hereof.
"Section 355 Percentage" means, for the first Section 355
Transaction effected after the date hereof, 30%, and shall thereafter be subject
to reduction as follows: Immediately after the time at which any Section 355
Transaction is effected through a distribution of securities of a Controlled
Corporation pursuant to clause (6) of the second paragraph of Section 3.9
hereof, the Section 355 Percentage shall equal (i) the Section 355 Percentage
immediately prior to such time less (ii) the percentage of (x) the EBITDA of the
Issuer for the four full fiscal quarters of the Issuer last preceding the date
such Section 355 Transaction is effected represented by (y) the EBITDA of such
Controlled Corporation for such period.
"Section 355 Transaction" means a transaction that qualifies
for tax-free treatment under Section 355 of the Code, or any similar taxable
transaction, any of which is effected after the date hereof.
16
"Security" or "Securities" means any of the 11-1/4% Senior
Notes Due 2008 authenticated and delivered under this Indenture.
"Senior Indebtedness" means (i) all obligations of the Issuer
and its Subsidiaries now or hereafter existing under or in respect of the Credit
Agreement and the Securities, whether for principal, interest (including,
without limitation, interest accruing after the filing of a petition initiating
any proceeding referred to in Section 4.1(6) or Section 4.1(7) hereof, whether
or not such interest is an allowable claim under such proceeding), penalties,
commissions, charges, indemnifications, liabilities, reimbursement obligations
in respect of letters of credit, fees, expenses or other amounts payable under
or in respect of the Credit Agreement and all obligations and claims related
thereto, (ii) all Obligations of the Issuer in respect of Interest Rate
Agreements and (iii) additional Indebtedness permitted by Section 3.11(a),
Section 3.11(b) or Section 3.11(c) hereof which is not expressly by its terms
subordinated to the Securities and all Obligations and claims related thereto.
Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (x) any Indebtedness of the Issuer to any
of its Subsidiaries or (y) Indebtedness incurred for the purchase of goods or
materials or for services (other than services provided by the Credit Agent in
connection with the Credit Agreement or any other party to an agreement
evidencing Senior Indebtedness in connection with such agreement) obtained in
the ordinary course of business. Senior Indebtedness under or in respect of the
Credit Agreement and the Securities shall continue to constitute Senior
Indebtedness for all purposes of this Indenture notwithstanding that such Senior
Indebtedness or any obligations or claims in respect thereof may be disallowed,
avoided or subordinated pursuant to any Bankruptcy Law or other applicable
insolvency law or equitable principles.
"Significant Subsidiary" means any Subsidiary of the Issuer
that would be a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X under the Securities Act of 1933, as amended (the "Act"), and the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (as such Regulation is in
effect on the date of the Indenture) (excluding, except for the purposes of
determining an Event of Default, subparagraph (c) of Rule 1-02 of Regulation
S-X).
"Specified Issuer EBITDA" means the EBITDA of the Issuer for
the four full fiscal quarters of the Issuer last preceding the date of the first
Section 355 Transaction effected after the date hereof.
"Subsidiary" of any person means any entity of which shares of
the capital stock or other equity interests (including partnership interests)
entitled to cast at least a majority of the votes that may be cast by all shares
or equity interests having ordinary voting power for the election of directors
or other governing body of such entity is owned by such person directly and/or
through one or more Subsidiaries; provided that each Unrestricted Subsidiary
shall be excluded from the definition of "Subsidiary".
"Trustee" means the entity identified as "Trustee" in the
first paragraph hereof and, subject to the provisions of Article Five, shall
also include any successor trustee.
"Trust Indenture Act of 1939" means the Trust Indenture Act of
1939 as in force at the date as of which this Indenture was originally executed
(except for purposes of the terms of any supplemental indenture executed
pursuant to Article VII).
17
"Unrestricted Subsidiary" means (i) any subsidiary of the
Issuer 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 Issuer (including any Subsidiary and 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
Subsidiary of the Issuer (other than any subsidiary of the subsidiary to be so
designated), provided that (a) any Unrestricted Subsidiary must be an entity of
which shares of the capital stock or other equity interests (including
partnership interests) entitled to cast at least a majority of the votes that
may be cast by all shares or equity interests having ordinary voting power for
the election of directors or other governing body are owned, directly or
indirectly, by the Issuer, (b) the Issuer certifies that such designation
complies with Section 3.9 and Section 3.17 and (c) each of (I) the subsidiary to
be so designated and (II) its subsidiaries has not at the time of designation,
and does not thereafter, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable with respect to any Indebtedness pursuant
to which the lender has recourse to any of the assets of the Issuer or any of
its Subsidiaries. The Board of Directors may designate any Unrestricted
Subsidiary to be a Subsidiary; provided that, immediately after giving effect to
such designation, the Issuer and its Subsidiaries could incur at least $1 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 3.11(a) on a pro forma basis taking into account such
designation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the then
outstanding aggregate principal amount of such Indebtedness into (ii) the total
of the product obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
ARTICLE TWO
ISSUE, EXECUTION, FORM AND REGISTRATION OF SECURITIES
SECTION 2.1 Authentication and Delivery of Securities. Upon
the execution and delivery of this Indenture, or from time to time thereafter,
Securities in an aggregate principal amount not in excess of the amount
specified in the form of Security hereinabove recited (subject to rounding
adjustments, upward or downward, in order to effect the issuance of the
Securities pursuant to the Indenture in accordance with the terms of the Plan
and except as otherwise provided in Section 2.6) may be executed by the Issuer
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Securities to or upon the written order of the
Issuer, signed by both (a) the Issuer's Chairman of the Board of Directors, or
any Vice Chairman of the Board of Directors, or its President or any Vice
President (whether or not designated by a number or numbers or a word or words
added before or after the title "Vice President") and (b) by the Issuer's
Treasurer or any Assistant Treasurer without any further action by the Issuer.
SECTION 2.2 Execution of Securities. The Securities shall be
signed on behalf of the Issuer by both (a) its Chairman of the Board of
Directors or any Vice Chairman of the Board of Directors or its President or any
Vice President (whether or not designated by a number or numbers or a word or
words added before or after the title "Vice President") and (b) by its Treasurer
or any Assistant Treasurer
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or its Secretary or any Assistant Secretary, under its corporate seal which may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security which
has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of
the Securities shall cease to be such officer before the Security so signed
shall be authenticated and delivered by the Trustee or disposed of by the
Issuer, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Security had not ceased to be
such officer of the Issuer; and any Security may be signed on behalf of the
Issuer by such persons as, at the actual date of the execution of such Security,
shall be the proper officers of the Issuer, although at the date of the
execution and delivery of this Indenture any such person was not such officer.
SECTION 2.3 Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, executed by the Trustee by manual signature of
one of its authorized signatories, shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee upon any Security executed by the Issuer shall be conclusive evidence
that the Security so authenticated has been duly authenticated and delivered
hereunder and that the holder is entitled to the benefits of this Indenture.
SECTION 2.4 Form, Denomination and Date of Securities;
Payments of Interest. The Securities and the Trustee's certificates of
authentication shall be substantially in the form recited above. The Securities
shall be issuable as registered securities without coupons and in denominations
provided for in the form of Security above recited. The Securities shall be
numbered, lettered, or otherwise distinguished in such manner or in accordance
with such plans as the officers of the Issuer executing the same may determine
with the approval of the Trustee.
Any of the Securities may be issued with appropriate
insertions, omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law, or with
any rules or regulations pursuant thereto, or with the rules of any securities
market in which the Securities are admitted to trading, or to conform to general
usage.
Each Security shall be dated the date of its authentication,
shall bear interest from the applicable date and shall be payable on the dates
and in the manner specified on the face of the form of Security recited above.
The person in whose name any Security is registered at the
close of business on any record date with respect to any interest payment date
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except if
and to the extent the Issuer shall default in the payment of the interest due on
such interest payment date, in which case such defaulted interest shall be paid
to the persons in whose names outstanding Securities are registered at the close
of business on a subsequent record date (which shall be not less than five
business days prior to the date of payment of such defaulted interest)
established by notice given by mail by or on behalf of the
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Issuer to the holders of Securities not less than 15 days preceding such
subsequent record date. The term "record date", as used with respect to any
interest payment date (except a date for payment of defaulted interest), shall
mean if such interest payment date is the first day of a calendar month, the
fifteenth day of the next preceding calendar month and shall mean, if such
interest payment date is the fifteenth day of a calendar month, the first day of
such calendar month, whether or not such record date is a business day. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.5 Registration, Transfer and Exchange. The Issuer
will keep at each office or agency to be maintained for the purpose as provided
in Section 3.2 a register or registers in which, subject to such reasonable
regulations as it may prescribe, it will register, and will register the
transfer of, Securities as in this Article provided. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any
Security at each such office or agency, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Security or Securities in authorized denominations for a like aggregate
principal amount. Securities may be presented for registration of transfer in
part only in multiples of $1,000.
Any Security or Securities may be exchanged for a Security or
Securities in other authorized denominations, in an equal aggregate principal
amount. Securities to be exchanged shall be surrendered at each office or agency
to be maintained by the Issuer for such purpose as provided in Section 3.2, and
the Issuer shall execute and the Trustee shall authenticate and deliver in
exchange therefor the Security or Securities which the Securityholder making the
exchange shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
All Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by, the holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
exchange or registration of transfer of Securities. No service charge shall be
made for any such transaction.
The Trustee shall not be required to exchange or register a
transfer of (a) any Securities for a period of 15 days next preceding the first
mailing of notice of redemption of Securities to be redeemed or (b) any
Securities selected, called or being called for redemption except, in the case
of any Security where public notice has been given that such Security is to be
redeemed in part, the portion thereof not so to be redeemed.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
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SECTION 2.6 Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated,
defaced or be apparently destroyed, lost or stolen, the Issuer in its discretion
may execute, and upon the written request of any officer of the Issuer, the
Trustee shall authenticate and deliver, a new Security, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of and substitution for the Security so apparently
destroyed, lost or stolen. In every case the applicant for a substitute Security
shall furnish to the Issuer and to the Trustee and any agent of the Issuer or
the Trustee such security or indemnity as may be required by them to indemnify
and defend and to save each of them harmless and, in every case of destruction,
loss or theft evidence to their satisfaction of the apparent destruction, loss
or theft of such Security and of the ownership thereof.
Upon the issuance of any substitute Security, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith. In case any Security
which has matured or is about to mature, or has been called for redemption in
full, shall become mutilated or defaced or be apparently destroyed, lost or
stolen, the Issuer may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated or defaced Security), if the applicant for such payment shall
furnish to the Issuer and to the Trustee and any agent of the Issuer or the
Trustee such security or indemnity as any of them may require to save each of
them harmless from all risks, however remote, and, in every case of apparent
destruction, loss or theft, the applicant shall also furnish to the Issuer and
the Trustee and any agent of the Issuer or the Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of such Security and of
the ownership thereof.
Every substitute Security issued pursuant to the provisions of
this Section by virtue of the fact that any Security is apparently destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Issuer, whether or not the apparently destroyed, lost or stolen Security shall
be at any time enforceable by anyone and shall be entitled to all the benefits
of (but shall be subject to all the limitations of rights set forth in) this
Indenture equally and proportionately with any and all other Securities duly
authenticated and delivered hereunder. All Securities shall be held and owned
upon the express condition that, to the extent permitted by law, the foregoing
provisions are exclusive with respect to the replacement or payment of
mutilated, defaced or apparently destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or statute
existing or hereafter enacted to the contrary with respect to the replacement or
payment of negotiable instruments or other securities without their surrender.
SECTION 2.7 Cancellation of Securities; Destruction Thereof.
All Securities surrendered for payment, redemption, registration of transfer or
exchange, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be cancelled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy cancelled Securities held by it and deliver
a certificate of destruction to the Issuer. If the Issuer shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.
SECTION 2.8 Temporary Securities. Pending the preparation of
definitive Securities, the Issuer may execute and the Trustee shall authenticate
and deliver temporary Securities (printed,
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lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities shall be issuable as
registered Securities without coupons, of any authorized denomination, and
substantially in the form of the definitive Securities but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as
may be determined by the Issuer with the concurrence of the Trustee. Temporary
Securities may contain such reference to any provisions of this Indenture as may
be appropriate. Every temporary Security shall be executed by the Issuer and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities and thereupon temporary Securities may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Issuer
for the purpose pursuant to Section 3.2, and the Trustee shall authenticate and
deliver in exchange for such temporary Securities a like aggregate principal
amount of definitive Securities of authorized denominations. Until so exchanged
the temporary Securities shall be entitled to the same benefits under this
Indenture as definitive Securities.
ARTICLE THREE
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.1 Payment of Principal and Interest. The Issuer
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of, and interest on, each of the Securities at the place or places
at the respective times and in the manner provided in the Securities. Each
installment of interest on the Securities may, at the option of the Issuer, be
paid by wire transfer or by check mailed to the holders of Securities entitled
thereto as they shall appear on the registry books of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as any of the
Securities remain outstanding, the Issuer will maintain the following: (a) an
office or agency where the Securities may be presented for payment, (b) an
office or agency where the Securities may be presented for registration of
transfer and for exchange as in this Indenture provided and (c) an office or
agency where notices and demands to or upon the Issuer in respect of the
Securities or of this Indenture may be served. The Issuer will give to the
Trustee written notice of the location of any such office or agency and of any
change of location thereof. The Issuer hereby initially designates the Corporate
Trust Office of the Trustee as the office or agency for each such purpose. In
case the Issuer shall fail to maintain any such office or agency or shall fail
to give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the Corporate
Trust Office.
SECTION 3.3 Appointment to Fill a Vacancy in Office of
Trustee. The Issuer, whenever necessary to avoid or fill a vacancy in the office
of Trustee, will appoint, in the manner provided in Section 5.9, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer shall appoint a
paying agent other than the Trustee, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall agree with
the Trustee, subject to the provisions of this Section,
(a) that it will hold all sums received by it as such agent
for the payment of the principal of or interest on the Securities
(whether such sums have been paid to it by the Issuer
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or by any other obligor on the Securities) in trust for the benefit of
the holders of the Securities or of the Trustee,
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities) to make any payment
of the principal of or interest on the Securities when the same shall
be due and payable, and
(c) that it will pay any such sums so held in trust by it to
the Trustee upon the Trustee's written request at any time during the
continuance of the failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal
of or interest on the Securities, deposit with the paying agent a sum sufficient
to pay such principal or interest, and (unless such paying agent is the Trustee)
the Issuer will promptly notify the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent, it will, on
or before each due date of the principal of or interest on the Securities, set
aside, segregate and hold in trust for the benefit of the holders of the
Securities a sum sufficient to pay such principal or interest so becoming due.
The Issuer will promptly notify the Trustee of any failure to take such action.
Anything in this Section to the contrary notwithstanding, the
Issuer may at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Issuer or any paying agent hereunder,
as required by this Section, such sums to be held by the Trustee upon the trusts
herein contained.
Anything in this Section to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section are subject to the
provisions of Sections 9.3 and 9.4.
SECTION 3.5 Certificates to Trustee. The Issuer will, so long
as any of the Securities are outstanding:
(a) deliver to the Trustee, forthwith upon becoming aware of
any default or defaults in the performance of any covenant, agreement
or condition contained in this Indenture (including notice of any event
of default which with the giving of notice and lapse of time would
become an Event of Default under Section 4.1 hereof), an Officers'
Certificate specifying such default or defaults; and
(b) deliver to the Trustee within 120 days after the end of
each fiscal year of the Issuer beginning with the fiscal year ending
December 31, 1998, an Officers' Certificate in compliance with Section
314(a)(4) of the Trust Indenture Act of 1939.
SECTION 3.6 Securityholder Lists. If and so long as the
Trustee shall not be the Security registrar, the Issuer will furnish or cause to
be furnished to the Trustee a list in such form as the Trustee may reasonably
require of the names and addresses of the holders of the Securities pursuant to
Section 312 of the Trust Indenture Act (a) semi-annually not more than 15 days
after each record date for the payment of semi-annual interest on the
Securities, as hereinabove specified, as of such record
23
date, and (b) at such other times as the Trustee may request in writing, within
thirty days after receipt by the Issuer of any such request as of a date not
more than 15 days prior to the time such information is furnished.
SECTION 3.7 Reports by the Issuer. The Issuer covenants:
(a) to file with the Commission and, within 15 days after the
Issuer is required to file the same with the Commission, with the
Trustee copies of the annual reports and of the information, documents
and other reports which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act
and, if the Issuer is not required to file such information, documents
or reports with the Commission, to file with the Commission and the
Trustee the same such information, documents or reports as if the
Issuer were so subject;
(b) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
provided for in this Indenture as may be required from time to time by
such rules and regulations; and
(c) to transmit by mail to the Holders of Securities, within
30 days after the filing thereof with the Trustee, any information,
documents and reports required to be filed by the Issuer with the
Trustee pursuant to (a) and (b) of this Section 3.7.
SECTION 3.8 Reports by the Trustee. Within 60 days after May
15 of each year, beginning May 15, 1998, for so long as any Securities are
outstanding hereunder, the Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the registry books, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act of 1939, a brief report dated as of such May 15 if required by and in
compliance with Section 313(a) of the Trust Indenture Act of 1939.
SECTION 3.9 Limitation on Restricted Payments. Subject to the
other provisions of this Section 3.9, the Issuer shall not and shall not permit
any of its Subsidiaries to, directly or indirectly:
(a) declare or pay any dividend or make any distribution on
account of the Issuer's or any Subsidiary's capital stock or other
Equity Interests (other than (i) dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Issuer or such
Subsidiary and (ii) dividends or distributions payable by a Subsidiary
so long as, in the case of any dividend or distribution payable on any
class or series of securities issued by a Subsidiary other than a
wholly owned Subsidiary, the Issuer or a Subsidiary of the Issuer
receives at least its pro rata share of such dividend or distribution
in accordance with its Equity Interest in such class or series of
securities); or
(b) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Issuer or any Subsidiary of the Issuer
(other than any such Equity Interests owned by the Issuer or any
Subsidiary of the Issuer); or
24
(c) voluntarily prepay Indebtedness that is subordinated to
the Securities other than in connection with any (i) refinancing of
such Indebtedness specifically permitted pursuant to Section 3.11(c)
hereof, (ii) Indebtedness between the Issuer and a Subsidiary of the
Issuer or between Subsidiaries of the Issuer or (iii) Mortgage
Financing or Mortgage Refinancing; or
(d) make any Restricted Investments (other than an Investment
in any Unrestricted Subsidiary)
(all of the foregoing dividends, distributions, purchases, redemptions or other
acquisitions, retirements, prepayments or Restricted Investments set forth in
clauses (a) through (d) above being collectively referred to as "Restricted
Payments"), if at the time of such Restricted Payment:
(i) a Default or Event of Default shall have
occurred and be continuing or shall occur as a consequence
thereof;
(ii) immediately after such Restricted Payment and
after giving effect thereto on a pro forma basis, the Issuer
would not be able to incur $1 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 3.11(a); or
(iii) such Restricted Payment, together with (A) the
aggregate of all other Restricted Payments (in each case
valued, where other than cash, at their fair market value as
of the date such Restricted Payments are made) made after the
date hereof and (B) the amount by which the aggregate of all
then outstanding Investments in Unrestricted Subsidiaries
(other than the FRD Investment) exceeds $75 million, is
greater than the sum of: (v) 50% of the aggregate Consolidated
Net Income of the Issuer for the period (taken as one
accounting period) from the beginning of the first quarter
immediately after the date hereof to the end of the Issuer's
most recently ended fiscal quarter at the time of such
Restricted Payment (provided that if Consolidated Net Income
for such period is less than zero, then minus 100% of the
amount of such loss) plus (w) 100% of the aggregate
amortization of goodwill and excess reorganization value for
the period specified in (v) above, plus (x) 100% of the
aggregate net cash proceeds and the fair market value of
marketable securities received by the Issuer from the issue or
sale, after the date hereof, of capital stock of the Issuer
(other than capital stock issued and sold to a Subsidiary of
the Issuer and other than Disqualified Stock), or any
Indebtedness or other security convertible into any such
capital stock that has been so converted plus (y) 100% of the
aggregate amounts contributed to the capital of the Issuer
plus (z) 100% of the aggregate amounts received in cash and
the fair market value of marketable securities (other than
Restricted Investments) received from (I) the sale or other
disposition of Restricted Investments made by the Issuer and
its Subsidiaries 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 Issuer or any
Subsidiary from the proceeds of such sale.
For purposes of clause (iii) above, the fair market value of property other than
cash may be conclusively determined in good faith by the Board of Directors.
The provisions of this Section 3.9 shall not prohibit:
25
(1) 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 hereof;
(2) the retirement of any shares of the Capital Stock of the
Issuer (the "Retired Capital Stock") in exchange for, or out of the net
proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Issuer) of, other shares of the Capital Stock of the
Issuer (the "Refunding Capital Stock"), other than any Disqualified
Stock;
(3) payments for the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests in the
Issuer issued to members of management of the Issuer and its
subsidiaries pursuant to subscription and option agreements in effect
on the date hereof (or effected within 60 days of the date hereof as
contemplated by the disclosure statement relating to the Plan) and
Equity Interests in the Issuer issued to future members of management
pursuant to subscription and option 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 and option agreements in effect on the date hereof (or
effected within 60 days hereof as contemplated by the disclosure
statement relating to the Plan), provided that the amount of such
payments, after the date hereof, in the aggregate will not exceed the
sum of (I) $30 million plus (II) the cash proceeds from any reissuance
of such Equity Interests by the Issuer to members of management of the
Issuer and its subsidiaries;
(4) the repurchase, redemption or other acquisition or
retirement for value of Indebtedness of the Issuer which is
subordinated in right of payment to the Securities in exchange for or
with the proceeds of the issuance of shares of the Issuer's Equity
Interests (other than Disqualified Stock);
(5) the redemption, repurchase or retirement of any
Indebtedness that is subordinated to the Securities (A) with the
proceeds of, or in exchange for, Indebtedness incurred pursuant to
Section 3.11(c) or (B) if, after giving effect to such redemption,
repurchase or retirement, the Issuer could incur at least $1 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 3.11(a);
(6) the distribution to stockholders of securities of a
corporation controlled by the Issuer (a "Controlled Corporation") in a
Section 355 Transaction, but only if (a) the EBITDA of the Controlled
Corporation for the four full fiscal quarters of the Issuer last
preceding the date the Section 355 Transaction is effected is no
greater than (I) in the case of the first Section 355 Transaction
effected after the date hereof, a percentage of the Specified Issuer
EBITDA equal to the Section 355 Percentage at the time such first
Section 355 Transaction is effected and (II) in the case of any
subsequent Section 355 Transaction, the lesser of (A) the Remaining
Section 355 Amount at the time of such Section 355 Transaction and (B)
the Section 355 Percentage at the time such Section 355 Transaction is
effected multiplied by the EBITDA of the Issuer for the four full
fiscal quarters of the Issuer last preceding the date such Section 355
Transaction is effected, (b) the Issuer's Fixed Charge Coverage Ratio
for its four full fiscal quarters last preceding the date the Section
355 Transaction is effected would have been at least 2:1, determined on
a pro forma basis as if the Section 355 Transaction had been effected
at the beginning of such four-quarter period and (c) the ratio of the
Indebtedness of the Issuer and its Subsidiaries on a
26
consolidated basis immediately after the Section 355 Transaction to
EBITDA of the Issuer for its four full fiscal quarters last preceding
the date the Section 355 Transaction is effected, determined on a pro
forma basis as if such transaction had occurred at the beginning of
such four quarter period, would be no greater than the ratio of the
Indebtedness of the Issuer and its Subsidiaries on a consolidated basis
immediately prior to the Section 355 Transaction to EBITDA of the
Issuer for its four full fiscal quarters last preceding the date the
Section 355 Transaction is effected;
(7) the purchase, redemption or other acquisition or
retirement for value of Equity Interests of any Subsidiary of the
Issuer (other than any such Equity Interests owned by the Issuer or any
Subsidiary of the Issuer) in an amount of (a) up to $5 million for the
first year following the date hereof and (b) for each year thereafter,
up to $5 million plus the unused portion of the amount permitted to be
expended for such purpose in all preceding years;
provided that in determining the aggregate amount expended for Restricted
Payments in accordance with clause (iii) of the first paragraph of this Section
3.9, (i) no amounts expended under clauses (2), (4), (5) and (6) of this
paragraph shall be included, (ii) 100% of the amounts expended under clauses (3)
and (7) of this paragraph shall be included, and (iii) 100% of the amounts
expended under clause (1), to the extent not included under subclauses (i) or
(ii) of this proviso, shall be included.
SECTION 3.10 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries. The Issuer shall not, and shall not permit
any of its Subsidiaries (other than unconsolidated subsidiaries) to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any such Subsidiary to
(a) 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
Issuer or any Subsidiary of the Issuer, or pay any Indebtedness owed to, the
Issuer or a Subsidiary of the Issuer, (b) make loans or advances to the Issuer
or a Subsidiary of the Issuer or (c) transfer any of its properties or assets to
the Issuer or a Subsidiary of the Issuer, except in each case for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Indenture, (iii) the Credit Agreement or any other agreement entered
into in connection therewith or as contemplated thereby, (iv) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Issuer or a Subsidiary of the Issuer, (v) any
instrument governing Indebtedness of a Person acquired by the Issuer or any
Subsidiary of the Issuer at the time of such acquisition, (vi) Existing
Indebtedness, or additional Indebtedness in an aggregate principal amount of up
to $250,000,000 at any one time outstanding or other contractual obligation of
the Issuer or any of its Subsidiaries existing on the date hereof or any
amendment, modification, renewal, extension, replacement, refinancing or
refunding thereof, provided that the restrictions contained in any such
amendment, modification, renewal, extension, replacement, refinancing or
refunding are no less favorable in all material respects to the Holders, (vii)
any Mortgage Financing or Mortgage Refinancing, (viii) any Permitted Investment
or (ix) contracts for the sale of assets.
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SECTION 3.11 Limitation on Additional Indebtedness and
Issuance of Disqualified Stock.
(a) Subject to the other provisions of this Section 3.11,
(x) the Issuer shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur,
issue, assume or guarantee any Indebtedness (other than
Indebtedness between the Issuer and a Subsidiary of the Issuer
or between Subsidiaries of the Issuer, or guarantees by any
Subsidiary of Indebtedness of a Subsidiary or the Issuer) and
(y) the Issuer shall not issue any Disqualified
Stock,
unless (i) such Indebtedness or Disqualified Stock is either Acquisition
Indebtedness or is created, incurred, issued, assumed or guaranteed by the
Issuer and not a Subsidiary of the Issuer and (ii) the Issuer's Fixed Charge
Coverage Ratio for its four full fiscal quarters last preceding the date such
additional Indebtedness is created, incurred, assumed or guaranteed, or such
additional stock is issued, would have been at least 2:1, determined on a pro
forma basis (including a pro forma application of the net proceeds of such
Indebtedness or such issuance of stock) as if the additional Indebtedness had
been created, incurred, assumed or guaranteed, or such additional stock had been
issued, at the beginning of such four-quarter period.
The limitations of this Section 3.11(a) shall not apply to the
incurrence by the Issuer or any of its Subsidiaries of any Indebtedness pursuant
to the Credit Agreement; provided, however, that the principal amount of such
Indebtedness incurred pursuant to the Credit Agreement for this purpose shall
not exceed the greater of (i) $250 million and (ii) the aggregate amount of the
commitments under the Credit Agreement on the date hereof.
(b) The limitations of Section 3.11(a) hereof notwithstanding,
the Issuer or any Subsidiary may create, incur, issue, assume or
guarantee Indebtedness pursuant to the Credit Agreement or otherwise
(i) in connection with or arising out of Mortgage Financings, Mortgage
Refinancings or sale and lease-back transactions, provided the Mortgage
Financing Proceeds, Mortgage Refinancing Proceeds (excluding any
Mortgage Refinancing Proceeds received in connection with any
refinancing of any Indebtedness secured by a mortgage or Lien on the
Excluded Property) or Net Proceeds, as the case may be, incurred,
assumed or created in connection therewith are used to pay any
outstanding Senior Indebtedness, (ii) constituting purchase money
obligations for property acquired in the ordinary course of business or
other similar financing transactions (including, without limitation, in
connection with Mortgage Financings), provided that in the case of
Indebtedness exceeding $2 million for any such obligation or
transaction, such Indebtedness exists at the date of the purchase or
transaction or is created within 180 days thereafter, (iii)
constituting capital lease obligations, (iv) in connection with capital
expenditures, (v) constituting reimbursement obligations with respect
to letters of credit, including, without limitation, letters of credit
in respect of workers' compensation claims issued for the account of
the Issuer or a Subsidiary of the Issuer in the ordinary course of its
business, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims, (vi) constituting
additional Indebtedness in an aggregate principal amount of up to
$250,000,000 at any one time outstanding, whether incurred under the
Credit Agreement
28
or otherwise, (vii) constituting Indebtedness secured by the Excluded
Property and (viii) constituting Existing Indebtedness and permitted
refinancings thereof in accordance with Section 3.11(c) hereof.
(c) The limitations of Section 3.11(a) hereof notwithstanding,
the Issuer or any Subsidiary may create, incur, issue, assume or
guarantee any Indebtedness which serves to refund, refinance or
restructure its Existing Indebtedness or any other Indebtedness
incurred as permitted under this Indenture or any Indebtedness issued
to so refund, refinance or restructure such Indebtedness, including
additional Indebtedness incurred to pay premiums and fees in connection
therewith (the "Refinancing Indebtedness"), prior to its respective
maturity; provided, that such Refinancing Indebtedness (i) bears an
interest rate per annum which is equal to or less than the interest
rate per annum then payable under such Indebtedness being refunded or
refinanced (calculated in accordance with any formula set forth in the
documents evidencing any such Indebtedness) unless such Refinancing
Indebtedness is incurred, created or assumed within twelve months of
the scheduled maturity of the Indebtedness being refinanced, (ii) has a
Weighted Average Life to Maturity at the time such Refinancing
Indebtedness is incurred which is not less than the remaining Weighted
Average Life to Maturity of such Indebtedness being refunded or
refinanced, and (iii) to the extent such Refinancing Indebtedness
refinances Indebtedness subordinated to the Securities, such
Refinancing Indebtedness is subordinated to the Securities at least to
the same extent as the Indebtedness being refinanced or refunded; and
provided further, however, that clauses (i), (ii) and (iii) above shall
not apply to any refunding or refinancing of any Senior Indebtedness.
(d) The limitations of Section 3.11(a) hereof notwithstanding,
any unconsolidated subsidiary of the Issuer created after the date of
this Indenture may create, incur, issue, assume, guarantee or otherwise
become liable with respect to any additional Indebtedness, provided
that such Indebtedness is nonrecourse to the Issuer and its
consolidated Subsidiaries, and the Issuer and its consolidated
Subsidiaries have no liability with respect to such additional
Indebtedness.
SECTION 3.12 Limitation on Transactions with Affiliates. The
Issuer shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction (including, without limitation, the
purchase, sale, lease or exchange of any property or the rendering of any
service) involving aggregate consideration in excess of $5,000,000 for any one
transaction with any Affiliate, except for (a) transactions (including any
investments or loans or advances by or to any Affiliate) in good faith the terms
of which are fair and reasonable to the Issuer or such Subsidiary, as the case
may be, and are at least as favorable as the terms which could be obtained by
the Issuer or such Subsidiary, as the case may be, in a comparable transaction
made on an arm's length basis between unaffiliated parties (in each case as
conclusively determined by a majority of the directors of the Issuer
unaffiliated with such Affiliate or, if there are no such directors, as
conclusively determined by a majority of the Board of Directors), (b)
transactions in which the Issuer or any of its Subsidiaries, as the case may be,
delivers to the Holders a written opinion of a nationally recognized investment
banking firm stating that such transaction is fair to the Issuer or such
Subsidiary from a financial point of view, (c) transactions between the Issuer
and its subsidiaries or between subsidiaries of the Issuer which are not
otherwise prohibited under Section 3.9 of this Indenture and (d) payments or
loans to employees or consultants pursuant to employment or consultancy
contracts which are approved by the Board of Directors in good faith.
29
SECTION 3.13 Sale of Assets.
(a) Neither the Issuer nor any of its Subsidiaries (other than
unconsolidated Subsidiaries) shall (A) (I) sell, lease, convey or
otherwise dispose of in any transaction, or group of transactions that
are part of a common plan, all or substantially all of the assets or
capital stock of any Asset Segment (provided that the sale, lease,
conveyance or other disposition of all or substantially all of the
Issuer's assets shall not be subject to this Section 3.13 but shall be
governed by the provisions of Section 8.1 hereof) or (II) issue or sell
equity securities of any Asset Segment (each of the foregoing, an
"Asset Sale") or (B) sell, lease, convey or otherwise dispose of any
Business Segment, unless in each case, the Issuer shall apply the Net
Proceeds from such Asset Sale or such sale, lease, conveyance or other
disposition of a Business Segment to one or more of the following in
such combination as the Issuer may choose: (i) an investment in another
asset or business in the same line of business as, or a line of
business similar to that of, the line of business of the Issuer and its
Subsidiaries and such investment occurs within 366 days of such Asset
Sale or such sale, lease, conveyance or other disposition of a Business
Segment, (ii) a Net Proceeds Offer (as defined below) expiring within
366 days of such Asset Sale or such sale, lease, conveyance or other
disposition of a Business Segment or (iii) the purchase, redemption or
other prepayment or repayment of outstanding Senior Indebtedness within
366 days of such Asset Sale or such sale, lease, conveyance or other
disposition of a Business Segment; provided, however, if the net amount
not invested pursuant to clause (i) above or applied pursuant to clause
(iii) above is less than $15,000,000 the Issuer shall not be further
obligated to offer to redeem Securities pursuant to clause (ii) above.
Notwithstanding the foregoing, (i) the receipt of all proceeds of
insurance paid on account of the loss of or damage to any Business
Segment and awards of compensation for any such Business Segment taken
by condemnation or eminent domain which result in Net Proceeds to the
Issuer and its Subsidiaries of $50 million or more (excluding proceeds
to be used for replacement of such Business Segment, provided the
Trustee has received notice from the Issuer, within 90 days of such
receipt, of its intention to use such proceeds for such purpose) will
be deemed an "Asset Sale" and (ii) Permitted Investments and sales,
leases, conveyances or other dispositions of assets by the Issuer or
any Subsidiary to the Issuer or any wholly owned Subsidiary of the
Issuer will not be deemed an "Asset Sale" or a sale or other
disposition of a Business Segment.
(b) For purposes of subsection (ii) of clause (a) of this
Section, the Issuer shall apply the Net Proceeds of the Asset Sale or
the sale, lease, conveyance or other disposition of a Business Segment
to make a tender offer in accordance with applicable law (a "Net
Proceeds Offer") to repurchase the Securities at a price not less than
100% of the principal amount of the Securities plus accrued and unpaid
interest thereon. Any Net Proceeds Offer shall be made by the Issuer
only if and to the extent permitted under, and subject to prior
compliance with, the terms of any agreement governing Senior
Indebtedness. If on the date any Net Proceeds Offer is commenced,
securities of the Issuer ranking pari passu in right of payment with
the Securities are outstanding and the terms of such securities provide
that an offer to repurchase such securities similar to the Net Proceeds
Offer is to be made with respect thereto, then the Net Proceeds Offer
shall be made concurrently with such other offer, and securities of
each issue shall be accepted on a pro rata basis, in proportion to the
principal or face amount, as the case may be, of securities of each
issue which the holders thereof elect to have redeemed. After the last
date on which holders of the Securities are permitted to tender their
Securities in a Net Proceeds Offer, the Issuer shall not be restricted
under this Section 3.13 as to its use of any Net Proceeds
30
available to make such Net Proceeds Offer (up to the amount of Net
Proceeds that would have been used to redeem Securities assuming 100%
acceptance of the Net Proceeds Offer) but not used to redeem Securities
pursuant thereto.
(c) Notwithstanding any other provision hereof to the
contrary, for a period of 120 days after the last date on which holders
of the Securities are permitted to elect to have their Securities
redeemed in the Net Proceeds Offer, the Issuer may use any Net Proceeds
available to make such Net Proceeds Offer but not used to redeem
Securities pursuant thereto to purchase, redeem or otherwise acquire or
retire for value any securities of the Issuer ranking junior in right
of payment to the Securities at a price, stated as a percentage of the
principal or face amount of such junior securities, not greater than
the price, stated as a percentage of the principal amount of the
Securities offered in the Net Proceeds Offer; provided that if the Net
Proceeds Offer is for a principal amount (the "Net Proceeds Offer
Amount") of the Securities less than the aggregate principal amount of
the Securities then outstanding, then the Net Proceeds available for
use by the Issuer for such a purchase, redemption or other acquisition
or retirement for value of junior securities shall not exceed the Net
Proceeds Offer Amount.
(d) An offer to repurchase Securities pursuant to this Section
3.13 shall be made pursuant to the provisions of Section 11.5 hereof.
Simultaneously with the notification of such offer of redemption to the
Trustee as required by Section 11.5 hereof, the Issuer shall provide
the Trustee with an Officers' Certificate setting forth the information
required to be included therein by Section 10.5 hereof and, in
addition, setting forth the calculations used in determining the amount
of Net Proceeds to be applied to the redemption of Securities.
(e) In the event that the Issuer shall make any payment of Net
Proceeds to the Trustee which, to the actual knowledge of a trust
officer of the Trustee, should properly have been made to holders or to
the representative of the holders of any Senior Indebtedness for the
prepayment or repayment of such Senior Indebtedness pursuant to the
provisions of this Section 3.13, such payment shall be held by the
Trustee for the benefit of, and, upon written request of the holders of
such Senior Indebtedness or their representative, shall be paid
forthwith over and delivered to, the holders of such Senior
Indebtedness or their representative for application in accordance with
the provisions of this Section 3.13. With respect to the holders of
such Senior Indebtedness, the Trustee undertakes to perform only such
obligations on the part of the Trustee as are specifically set forth in
this Section 3.13(e), and no implied covenants or obligations with
respect to the holders of such Senior Indebtedness shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Senior Indebtedness. If
Net Proceeds are received by Holders which, pursuant to the provisions
of this Section 3.13, should properly have been received by the holders
of such Senior Indebtedness or their representative for the prepayment
or repayment of such Senior Indebtedness, the Holders who receive such
Net Proceeds shall hold such Net Proceeds in trust for, and pay such
Net Proceeds over to, the holders of such Senior Indebtedness or their
representative.
SECTION 3.14 Corporate Existence. Subject to Article 8 hereof
and other than as permitted by the Credit Agreement, the Issuer 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 Significant Subsidiary in accordance with the respective organizational
documents as they may be from time to time amended of the Issuer and each such
Subsidiary and the rights (charter
31
and statutory), governmental licenses and governmental franchises of the Issuer
and its Subsidiaries; provided, however, that the Issuer shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any such Subsidiary, if the preservation thereof is no
longer necessary in the conduct of the business of the Issuer and its
Subsidiaries taken as a whole and the loss thereof is not adverse in any
material respect to the Holders (which determination, if made in good faith by
the Board of Directors, shall be conclusive).
SECTION 3.15 Limitation on Liens.
(a) The Issuer shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on
any asset now owned or hereafter acquired by the Issuer or any such
Subsidiary, except:
(i) Liens existing on the date hereof, Liens securing
or arising under or in connection with any Indebtedness of the
Issuer not expressly by its terms subordinate or junior in
right of payment to any other Indebtedness of the Issuer
(including, without limitation, Liens permitted by or required
pursuant to the Credit Agreement), Liens arising under or in
connection with Section 9.1 hereof and Liens relating to
judgments to the extent such judgments do not give rise to an
Event of Default pursuant to Section 4.1(5) hereof;
(ii) Liens for taxes or assessments and similar
charges either (x) not delinquent or (y) contested in good
faith by appropriate proceedings and as to which the Issuer or
a Subsidiary shall have set aside on its books such reserves
as may be required pursuant to generally accepted accounting
principles;
(iii) Liens incurred or pledges and deposits in
connection with workers' compensation, unemployment insurance
and other social security benefits, or securing performance
bids, tenders, leases, contracts (other than for the repayment
of borrowed money), statutory obligations, progress payments,
surety and appeal bonds and other obligations of like nature,
incurred in the ordinary course of business;
(iv) Liens imposed by law, such as mechanics',
carriers', warehousemen's, materialmen's and vendors' Liens,
incurred in good faith in the ordinary course of business;
(v) zoning restrictions, easements of licenses,
covenants, reservations, restrictions on the use of real
property or minor irregularities of title incident thereto
which do not in the aggregate materially detract from the
value of the property or assets of the Issuer and its
Subsidiaries, taken as a whole, or materially impair the
operation of the business of the Issuer and its Subsidiaries,
taken as a whole;
(vi) Liens created by Subsidiaries to secure
Indebtedness of such Subsidiaries to the Issuer or its
Subsidiaries;
32
(vii) pledges of or Liens on raw materials or on
manufactured products as security for any drafts or bills of
exchange in connection with the importation of such raw
materials or manufactured products in the ordinary course of
business;
(viii) a Lien on any assets (x) securing Indebtedness
incurred or assumed pursuant to Section 3.11(b) hereof for the
purpose of financing all or any part of the cost of acquiring
such asset or construction thereof or thereon or (y) existing
on assets or businesses at the time of the acquisition
thereof;
(ix) the Lien granted to the Trustee pursuant to
Section 5.6 hereof and any substantially equivalent Lien
granted to the respective trustees under the indentures for
other debt securities of the Issuer;
(x) Liens arising in connection with any Mortgage
Financing or Mortgage Refinancing by the Issuer or any of its
Subsidiaries;
(xi) Liens securing reimbursement obligations with
respect to letters of credit issued for the account of the
Issuer or any of its Subsidiaries in the ordinary course of
business;
(xii) any Lien on the Excluded Property;
(xiii) Liens securing an interest of a landlord in
real property leases;
(xiv) all other Liens incurred in the ordinary course
of business; provided that the aggregate amount of
Indebtedness secured by such Liens shall not exceed $5,000,000
at any one time outstanding; or
(xv) Liens created in connection with the refinancing
of any Indebtedness secured by Xxxxx permitted to be incurred
or to exist pursuant to the foregoing clauses; provided,
however, that no additional assets are encumbered by such
Liens in connection with such refinancing, unless permitted by
clause (i) above or Section 3.15(b).
(b) Notwithstanding the provisions of paragraph (a) above, the
Issuer or any Subsidiary may create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, if the
Issuer makes or causes to be made effective provision whereby the
Securities will be equally and ratably secured with any and all other
Indebtedness secured by such Lien as long as any such other
Indebtedness shall be so secured, provided that if such Lien ceases to
exist, such equal and ratable Lien shall thereupon automatically cease
to exist.
SECTION 3.16 Issuer to Cause Certain Subsidiaries to Become
Guarantors. The Issuer shall not permit any of its Subsidiaries to guarantee the
payment of any Indebtedness of the Issuer that is expressly by its terms
subordinate or junior in right of payment to any other Indebtedness of the
Issuer (a "Subordinated Indebtedness Guarantee") unless (i) such Subsidiary
executes and delivers a supplemental indenture evidencing its guarantee of the
Issuer's Obligations hereunder and under the Securities on a substantially
similar basis (the "Securities Guarantee") and (ii) the Securities Guarantee is
senior in right
33
of payment to such Subordinated Indebtedness Guarantee to the same extent as the
Securities are senior in right of payment to such junior Indebtedness of the
Issuer; provided that if such Subordinated Indebtedness Guarantee ceases to
exist for any reason, then the Securities Guarantee shall thereupon
automatically cease to exist.
SECTION 3.17 Investments in Unrestricted Subsidiaries. The
Issuer will not, and will not permit any of its Subsidiaries to, directly or
indirectly, make any Investment in any Unrestricted Subsidiary unless (i) the
amount of such Investment does not exceed the amount then permitted to be used
to make a Restricted Payment pursuant to clause (iii) of the first paragraph of
Section 3.9 and (ii) immediately after such Investment, and after giving effect
thereto on a pro forma basis deducting from Net Income the amount of any
Investment the Issuer or any Subsidiary of the Issuer has made in an
Unrestricted Subsidiary during the four full fiscal quarters last preceding the
date of such Investment, the Issuer or any Subsidiary of the Issuer would be
able to incur $1 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 3.11(a). Notwithstanding clause (i) and
(ii) of this Section 3.17 or any other provisions hereof to the contrary, the
Issuer and its Subsidiaries shall be permitted to make (i) the FRD Investment
and (ii) Investments in other Unrestricted Subsidiaries in an aggregate amount
not to exceed $75 million (without regard to the FRD Investment) at any one time
outstanding. The amount by which the aggregate of all Investments in
Unrestricted Subsidiaries exceeds $75 million (without regard to the FRD
Investment) shall be counted in determining the permissible amount of Restricted
Payments pursuant to clause (iii) of the first paragraph of Section 3.9. The
Issuer will not permit any Unrestricted Subsidiary to become a Subsidiary except
pursuant to the last sentence of the definition of Unrestricted Subsidiary set
forth in Section 1.1.
SECTION 3.18 Offer to Redeem Upon Change of Control. If at any
time (the "Change of Control Date") (i) all or substantially all of the Issuer's
assets are sold as an entirety to any person or related group of persons, (ii)
the Issuer is merged with or into another corporation or another corporation is
merged with or into the Issuer with the effect that immediately after such
transaction the stockholders of the Issuer immediately prior to such transaction
hold less than a majority in interest of the total voting power entitled to vote
in the election of directors, managers or trustees of the person surviving such
transaction, (iii) any person or related group of persons acquires a majority in
interest of the total voting power or voting stock of the Issuer, (iv) the
persons constituting the Board of Directors of the Issuer on the date hereof or
persons nominated or elected to the Board of Directors of the Issuer by a
majority vote of such directors (the "Continuing Directors") or by a majority
vote of the Continuing Directors do not constitute a majority of the members of
the Board of Directors of the Issuer (each, a "Change of Control"), then the
Issuer will notify the Holders of the Securities in writing of such occurrence
and will make an offer to redeem in accordance with the terms of this Indenture
(the "Change of Control Offer") all Securities then outstanding at a redemption
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the redemption date; provided, however, that such
redemption will only occur if there has been no acceleration which has not been
withdrawn or paid pursuant to the Credit Agreement prior to the time of notice
of a Change of Control Offer. Prior to the mailing of the notice to Holders
provided for above, the Issuer will (x)(I) to the extent then repayable or
prepayable, repay in full all Indebtedness under the Credit Agreement and, to
the extent not then repayable or prepayable, offer to repay in full all such
Indebtedness and to repay the Indebtedness of each lender under the Credit
Agreement who has accepted such offer or (II) obtain the requisite consent under
the Credit Agreement to permit the redemption of the Securities. The Issuer
shall first comply with the proviso in the preceding sentence before it shall be
required to redeem the Securities pursuant to this Section 3.18.
34
The Issuer shall comply with all applicable tender offer rules
(including, without limitation, Rule 14e-1 under the Exchange Act, if
applicable) in the event that the Holders' option pursuant to this Section 3.18
is triggered under the circumstances described herein. No less than 30 or more
than 60 days following any Change of Control, the Issuer shall mail a notice to
each Holder of any Securities stating (a) that a Change of Control has occurred
and that a Change of Control Offer is being made as described in this Section
3.18 and that all Securities properly tendered will be accepted for payment, (b)
the redemption price and the redemption date, which will be no later than 30
business days from the date such notice is mailed (the "Change of Control
Payment Date"), (c) that only Securities not tendered will continue to accrue
interest, (d) that any Securities accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of Control Payment
Date, (e) that Holders electing to have Securities redeemed pursuant to the
Change of Control Offer will be required to surrender the Securities, with the
form entitled "Option of Holder to Elect to Have Security Redeemed" on the
reverse of the Security completed (with the box checked referencing the Change
of Control Offer pursuant to this Section 3.18), to the Issuer or paying agent
prior to the close of business on the third Business Day preceding the Change of
Control Payment Date, (f) that Holders will be entitled to withdraw their
election if the Issuer or paying agent receives, not later than the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Securities delivered for redemption, and a statement that
such Holder is withdrawing his election to have the Securities redeemed, (g)
that Holders whose Securities are being redeemed only in part will be issued new
Securities equal in principal amount to the unredeemed portion of the Securities
surrendered, which unredeemed portion must be equal to $1,000 in principal
amount or an integral multiple thereof, and (h) such other instructions
determined by the Issuer, consistent with this provision, that a Holder of the
Securities must follow in order to have such Xxxxxx's Securities redeemed.
On the Change of Control Payment Date, the Issuer shall, to the extent
lawful, (i) accept for payment Securities or portions thereof tendered pursuant
to the Change of Control Offer, (ii) deposit with the paying agent money
sufficient to pay the redemption price of all Securities or portions thereof so
tendered and (iii) deliver to the Trustee Securities so accepted together with
an Officer's Certificate stating the Securities or portions thereof tendered to
the Issuer. The paying agent shall promptly mail to the Holder of Securities so
accepted payment in an amount equal to the redemption price, and the Trustee
shall promptly authenticate and mail to Holders whose Securities are redeemed
only in part new Securities equal in principal amount to any unredeemed portion
of the Securities surrendered, provided that such new Securities shall be in a
principal amount of $1,000 or an integral multiple thereof.
ARTICLE FOUR
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.1 Events of Default. An "Event of Default" occurs
if:
(1) the Issuer defaults in the payment of interest on any
Security when the same becomes due and payable and the Default con-
tinues for a period of 30 days;
(2) the Issuer defaults in the payment of the principal of
any Security when the same becomes due and payable at maturity, upon
redemption or otherwise;
35
(3) the Issuer fails to comply with any of its other
agreements or covenants in, or any other provisions of, the Securities
or this Indenture and the Default continues for the period and after
the notice specified in this Section 4.1;
(4) a default occurs 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 Issuer
or any of its Subsidiaries (or the payment of which is guaranteed by
the Issuer or any of its Subsidiaries) other than (i) Indebtedness of
the Issuer or any Subsidiary of the Issuer to the Issuer or any
Subsidiary of the Issuer or (ii) Indebtedness permitted pursuant to
Section 3.11(d) hereof, whether such Indebtedness or guarantee now
exists or shall be created hereafter, if (a) either (x) such default
results from the failure to pay principal upon the final maturity of
such Indebtedness (after the expiration of any applicable grace period)
or (y) as a result of such default the maturity of such Indebtedness
has been accelerated prior to its final maturity, (b) the principal
amount of such Indebtedness, together with the principal amount of any
such Indebtedness with respect to which the principal amount remains
unpaid upon its final maturity (after the expiration of any applicable
grace period), or the maturity of which has been so accelerated,
aggregates $30,000,000 or more and (c) such default does not result
from compliance with any applicable law or any court order or
governmental decree to which the Issuer or any of its Subsidiaries is
subject;
(5) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Issuer or any of its Subsidiaries and such judgment or
judgments remain undischarged for a period (during which execution
shall not be effectively stayed) of 60 days, provided that the
aggregate of all such judgments (net of amounts covered by insurance,
treating any deductibles, self insurance or retention as not so
covered) exceeds $10,000,000;
(6) the Issuer or any Significant Subsidiary of the
Issuer 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 Issuer or any
Significant Subsidiary of the Issuer in an involuntary case,
36
(b) appoints a Custodian of the Issuer or any
Significant Subsidiary of the Issuer or for all or sub-
stantially all of its property, or
(c) orders the liquidation of the Issuer or any
Significant Subsidiary of the Issuer,
and the order or decree remains unstayed and in effect for 60 days.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under
clause (4) or (5) until the Issuer shall have received written notice from the
Trustee or the Holders of at least 30% in principal amount of the then
outstanding Securities. A Default under clause (3) is not an Event of Default
until the Trustee notifies the Issuer, or the Holders of at least 30% in
principal amount of the then outstanding Securities notify the Issuer and the
Trustee, of the Default and the Issuer 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".
In the case of any Event of Default pursuant to the provisions
of this Section 4.1 occurring by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Issuer with the intention of
avoiding payment of the premium which the Issuer would have to pay if the Issuer
then had elected to redeem the Securities pursuant to Section 11.1, 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.
SECTION 4.2 Acceleration. If an Event of Default (other than
an Event of Default specified in clause (6) or (7) of Section 4.1) occurs and is
continuing, the Trustee may, by written notice to the Issuer, or the Holders of
at least 30% (or 25% in the case of an Event of Default specified in Section
4.1(1) or 4.1(2)) in principal amount of the then outstanding Securities may, by
written notice to the Issuer and the Trustee, and the Trustee shall, upon the
request of such Holders, declare 100% of the unpaid principal of and any accrued
but unpaid interest on the Securities to be due and payable. Upon such
declaration the principal and interest shall be due and payable immediately;
provided, however, that if any Senior Indebtedness is outstanding pursuant to
the Credit Agreement, upon a declaration of acceleration, such principal and
interest shall be due and payable upon the earlier of (x) the day that is five
Business Days after the provision to the Issuer and the Credit Agent of such
written notice, unless such Event of Default is cured or waived prior to such
date, and (y) the date of acceleration of any Senior Indebtedness under the
Credit Agreement. In the event of a declaration of acceleration because an Event
of Default specified in Section 4.1(4) has occurred and is continuing, such
declaration of acceleration shall be automatically annulled if such payment
default is cured or waived or the holders of the Indebtedness which is the
subject of such Event of Default have rescinded their declaration of
acceleration in respect of such Indebtedness within 60 days thereof and the
Trustee has received written notice of such cure, waiver or rescission and no
other Event of Default under Section 4.1(4) has occurred and is continuing with
respect to which 60 days have elapsed since the declaration of acceleration of
the Indebtedness which is the subject of such other event of default (without
rescission of the declaration of acceleration of such Indebtedness). If an Event
of Default specified in clause (6) or (7) of Section 4.1 occurs, the unpaid
principal of and any accrued but unpaid interest on all the Securities shall
ipso facto
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become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in 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 or interest that has become due solely because
of the acceleration) have been cured or waived. No such rescission shall affect
any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 4.3 Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest 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. Except as set
forth in Section 2.6 hereof, all remedies are cumulative to the extent permitted
by law.
SECTION 4.4 Waiver of Defaults. Subject to Section 7.2 hereof,
the Holders of a majority in principal amount of the then outstanding Securities
by notice to the Trustee may waive any past Default or Event of Default and its
consequences except a continuing Default or Event of Default in the payment of
the principal of or interest on any Security. Upon any such waiver, such Default
or Event of Default shall cease to exist and together with 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 4.5 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 (i)
refuse to follow any direction that conflicts with law or this Indenture, that
the Trustee reasonably determines may be unduly prejudicial to the rights of
other Holders or that may subject the Trustee to personal liability or (ii) take
any other action that it deems proper that is not inconsistent with such
decision. The Trustee shall be entitled to indemnification reasonably
satisfactory to it against losses or expenses caused by the taking or not taking
of such action.
SECTION 4.6 Limitation on Suits. A Holder may pursue a remedy
with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee written notice of a con-
tinuing Event of Default;
(2) the Holders of at least 30% (or 25% in the case of an
Event of Default specified in Section 4.1(1) or 4.1(2) hereof) 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 and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
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(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, 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 4.7 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of 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 4.8 Collection Suit by Trustee. If an Event of Default
specified in Section 4.1(1) or 4.1(2) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Issuer for the whole amount of principal and interest
remaining unpaid on the Securities and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
SECTION 4.9 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Issuer (or any other obligor upon the Securities),
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 5.6 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 5.6 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 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, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding. If
the Trustee does not file a proper claim or proof of debt in the form required
in any such proceeding prior to 30 days before the expiration of the time to
file such claim or claims, then the Credit Agent shall have the right to file
and is hereby authorized to file an appropriate claim for and on behalf of the
Holders.
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SECTION 4.10 Priorities. If the Trustee collects any money
pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 5.6, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to the Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Issuer.
The Trustee may fix a record date and payment date for any
payment to Holders.
SECTION 4.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 4.7, or a suit by
Holders of more than 10% in principal amount of the then outstanding Securities.
ARTICLE FIVE
CONCERNING THE TRUSTEE
SECTION 5.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. The Trustee, prior to the occurrence of an Event of
Default and after the curing or waiving of all Events of Default which may have
occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default has
occurred (which has not been cured or waived) the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default which may have
occurred:
(i) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Indenture,
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and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or responsible officers of
the Trustee, unless it shall be proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal
amount of the Securities at the time outstanding relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there shall be reasonable ground for
believing that the repayment of such funds or adequate indemnity against such
liability is not reasonably assured to it.
This Section 5.1 is in furtherance of and subject to Sections
315 and 316 of the Trust Indenture Act of 1939.
SECTION 5.2 Certain Rights of the Trustee. In furtherance of
and subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon, security or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution of the Board of Directors
may be evidenced to the Trustee by a copy thereof certified by the
secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be
taken by it hereunder in good faith and in accordance with such advice
or Opinion of Counsel;
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(d) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, appraisal, bond,
debenture, note, coupon, security, or other paper or document unless
requested in writing so to do by the holders of not less than a
majority in aggregate principal amount of the Securities then
outstanding; provided that, if the payment within a reasonable time to
the Trustee of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Issuer or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys not regularly in its employ and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by it hereunder.
SECTION 5.3 Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or as to the adequacy of any disclosure document used in connection
with the sale of the Securities. The Trustee shall not be accountable for the
use or application by the Issuer of any of the Securities or of the proceeds
thereof.
SECTION 5.4 Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
with the same rights it would have if it were not the Trustee or such agent and
may otherwise deal with the Issuer and receive, collect, hold and retain
collections from the Issuer with the same rights it would have if it were not
the Trustee or such agent.
SECTION 5.5 Moneys Held by Trustee. Subject to the provisions
of Section 9.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
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SECTION 5.6 Compensation and Indemnification of Trustee and
Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time
to time, and the Trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) and the Issuer covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The obligations
of the Issuer under this Section to compensate and indemnify the Trustee and
each predecessor Trustee and to pay or reimburse the Trustee and each
predecessor Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. Such additional indebtedness shall be a senior
claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the holders
of particular Securities, and the Securities are hereby subordinated to such
senior claim. If the Trustee incurs expenses or renders services after an Event
of Default specified in clause (6) or (7) of Section 4.1 occurs, such expenses
and the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 5.7 Right of Trustee to Rely on Officers' Certificate,
etc. Subject to Sections 5.1 and 5.2, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted by it under the
provisions of this Indenture upon the faith thereof.
SECTION 5.8 Persons Eligible for Appointment as Trustee. The
Trustee hereunder shall at all times be a corporation having a combined capital
and surplus of at least $5,000,000, and which is eligible in accordance with the
provisions of Section 310(a) of the Trust Indenture Act of 1939. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of a federal, state or District of Columbia supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
SECTION 5.9 Resignation and Removal; Appointment of Successor
Trustee.
(a) The Trustee may at any time resign by giving written
notice of resignation to the Issuer and by mailing notice thereof by
first-class mail to holders of Securities at their last addresses as
they shall appear on the Security register. Upon receiving such notice
of resignation, the Issuer shall promptly appoint a successor trustee
by written instrument in duplicate, executed by authority of the Board
of Directors, one copy of which instrument shall
43
be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee, or any
securityholder who has been a bona fide holder of a Security or
Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any such court for the appointment
of a successor trustee. Such court may thereupon, after such notice, if
any, as it may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act of
1939, after written request therefor by the Issuer or by any
Securityholder who has been a bona fide holder of a Security
or Securities for at least six months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 5.8 and shall fail
to resign after written request therefor by the Issuer or by
any such Securityholder; or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors of the Issuer, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to Section 315(e) of the Trust
Indenture Act of 1939, any securityholder who has been a bona fide
holder of a Security or Securities for at least six months may on
behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of
the Securities at the time outstanding may at any time remove the
Trustee and appoint a successor trustee by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 6.1 of the action in that regard taken
by the Securityholders.
(d) Any resignation or removal of the Trustee and any
appointment of a successor trustee pursuant to any of the provisions of
this Section 5.9 shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 5.10.
SECTION 5.10 Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 5.9 shall execute and
deliver to the Issuer and to its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
1
44
predecessor Trustee shall become effective and such successor trustee, without
any further act deed or conveyance, shall become vested with all rights, powers,
duties and obligations of its predecessor hereunder, with like effect as if
originally named as trustee herein; but, nevertheless, on the written request of
the Issuer or of the successor trustee, upon payment of its charges then unpaid,
the Trustee ceasing to act shall, subject to Section 9.4, pay over to the
successor trustee all moneys at the time held by it hereunder and shall execute
and deliver an instrument transferring to such successor trustee all such
rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a
prior claim upon all property or funds held or collected by such Trustee to
secure any amounts then due it pursuant to the provisions of Section 5.6.
Upon acceptance of appointment by a successor trustee as
provided in this Section 5.10, the Issuer shall mail notice thereof by
first-class mail to the holders of Securities at their last addresses as they
shall appear in the Security register. If the acceptance of appointment is
substantially contemporaneous with the predecessor's resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 5.9. If the Issuer fails to mail such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Issuer.
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be eligible under the provisions of Section 5.8, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Securities shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor hereunder or
in the name of the successor Trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Securities or in this
Indenture provided that the certificate of the Trustee shall have; provided,
that the right to adopt the certificate of authentication of any predecessor
Trustee or to authenticate Securities in the name of any predecessor Trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
ARTICLE SIX
CONCERNING THE SECURITYHOLDERS
SECTION 6.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by securityholders may be
embodied in and evidenced by one or more instruments of
45
substantially similar tenor signed by such securityholders in person or by agent
xxxx appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 5.1 and 5.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 6.2 Proof of Execution of Instruments and of Holding
of Securities: Record Date. Subject to Sections 5.1 and 5.2, the execution of
any instrument by a securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the Security register or by a
certificate of the registrar thereof. The Issuer may set a record date for
purposes of determining the identity of holders of Securities entitled to vote
or consent to any action referred to in Section 6.1, which record date may be
set at any time or from time to time by notice to the Trustee, for any date or
dates (in the case of any adjournment or resolicitation) not more than 60 days
nor less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, only holders of
Securities of record on such record date shall be entitled to so vote or give
such consent or to withdraw such vote or consent.
SECTION 6.3 Holders to Be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the person
in whose name any Security shall be registered upon the Security register as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Issuer nor the Trustee nor any agent of the Issuer or
the Trustee shall be affected by any notice to the contrary. All such payments
so made to any such person, or upon his order, shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Security.
SECTION 6.4 Securities Owned by Issuer Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal amount
of Securities have concurred in any direction, consent or waiver under this
Indenture, Securities which are owned by the Issuer or any other obligor on the
Securities or by any person directly or indirectly controlling or controlled by
or under direct or indirect common control with the Issuer or any other obligor
on the Securities shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, consent
or waiver only Securities which the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Issuer or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Issuer or any other obligor on the Securities.
In case of a dispute as to such right, the advice of counsel shall be full
protection in respect of any decision made by the Trustee in accordance with
such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 5.1 and
5.2, the Trustee shall be entitled to
46
accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are outstanding
for the purpose of any such determination.
SECTION 6.5 Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
6.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any holder of a Security the certificate number of which is
shown by the evidence to be included among the certificate numbers of the
Securities the holders of which have consented to such action may, by filing
written notice at the Corporate Trust Office and upon proof of holding as
provided in this Article, revoke such action so far as concerns such Security.
Except as aforesaid, any such action taken by the holder of any Security shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Security and of any Securities issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Security. Any action taken by the holders of the percentage in
aggregate principal amount of the Securities specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the holders of all the Securities.
ARTICLE SEVEN
SUPPLEMENTAL INDENTURES
SECTION 7.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) to evidence the succession of another corporation to the
Issuer, or successive successions and the assumption by the successor
corporation of the covenants, agreements and obligations of the Issuer
pursuant to Article Eight;
(b) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as its Board of
Directors and the Trustee shall consider to be for the protection of
the holders of Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any such additional
covenants, restrictions, conditions or provisions an Event of Default
permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in
respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may limit the
remedies available to the Trustee upon such an Event of Default or may
limit the right of the holders of a majority in aggregate principal
amount of the Securities to waive such an Event of Default;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard
47
to matters or questions arising under this Indenture or under any
supplemental indenture as the Board of Directors may deem necessary or
desirable and which shall not materially and adversely affect the
interests of the holders of the Securities; and
(d) to provide for the issuance under this Indenture of
Securities in coupon form (including Securities registrable as to
principal only) and to provide for exchangeability of such Securities
with Securities issued hereunder in fully registered form, and to make
all appropriate changes for such purpose.
The Trustee is hereby authorized to join in the execution of
any such supplemental indenture, to make any further appropriate agreements and
stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed without the consent of the holders of any of the
Securities at the time outstanding, notwithstanding any of the provisions of
Section 7.2.
SECTION 7.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article Six) of the
holders of not less than a majority in aggregate principal amount of the
Securities at the time outstanding, the Issuer, when authorized by a resolution
of its Board of Directors, and the Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the holders of the Securities; provided, that no such
supplemental indenture shall (a) extend the final maturity of any Security, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon or reduce the premium, if any, payable thereon, or
reduce any amount payable on redemption thereof, or impair or affect the right
of any Securityholder to institute suit for the payment thereof, or waive a
default in the payment of principal of, premium, if any, or interest on any
Security, change the currency of payment of principal of, premium, if any, or
interest on any Security, or modify any provision of this Indenture with respect
to the priority of the Securities in right of payment without the consent of the
holder of each Security so affected, or (b) reduce the aforesaid percentage of
Securities, the consent of the holders of which is required for any such
supplemental indenture, without the consent of the holders of all Securities
then outstanding.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the Secretary or an Assistant
Secretary of the Issuer authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
securityholders and other documents, if any, required by Section 6.1, the
Trustee shall join with the Issuer in the execution of such supplemental
indenture unless 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
securityholders under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
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Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Issuer shall mail a notice thereof by first-class mail to the holders of
Securities at their addresses as they shall appear on the registry books of the
Issuer, setting forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer 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 7.3 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Issuer and the holders
of Securities shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 7.4 Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any such
supplemental indenture complies with the applicable provisions of this
Indenture.
SECTION 7.5 Notation on Securities in Respect of Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee as to any matter provided for by such
supplemental indenture or as to any action taken at any such meeting. If the
Issuer or the Trustee shall so determine, new Securities so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Issuer, authenticated by the Trustee and delivered in
exchange for the Securities then outstanding.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 When Issuer May Merge, etc. The Issuer shall not
consolidate or merge with or into, or sell, transfer, lease or convey all or
substantially all of its assets to, any person unless:
(1) the person formed by or surviving any such consolidation
or merger (if other than the Issuer), or to which such sale, transfer,
lease or conveyance shall have been made, is a corporation organized
and existing under the laws of the United States, any state thereof or
the District of Columbia;
(2) the corporation formed by or surviving any such
consolidation or merger (if other than the Issuer), or to which such
sale, transfer, lease or conveyance shall have been made, assumes by
supplemental indenture in a form reasonably satisfactory to the Trustee
all the obligations of the Issuer under the Securities and this
Indenture;
(3) immediately after the transaction no Default or Event of
Default exists;
49
(4) the Issuer or any corporation formed by or surviving any
such consolidation or merger, or to which such sale, transfer, lease or
conveyance shall have been made, shall have an Adjusted Consolidated
Net Worth (immediately after the transaction but prior to any purchase
accounting adjustments resulting from the transaction) equal to or
greater than the Adjusted Consolidated Net Worth of the Issuer
immediately preceding the transaction; provided, however, that this
clause (4) shall not apply to any transaction where the consideration
consists solely of common stock or other Equity Interests of the Issuer
or any surviving corporation and any liabilities of such other person
are not assumed by and are specifically non-recourse to the Issuer or
such surviving corporation; and
(5) after giving effect to such transaction and immediately
thereafter, the Issuer or any corporation formed by or surviving any
such consolidation or merger, or to which such sale, transfer, lease or
conveyance shall have been made, shall be permitted to incur at least
$1.00 of additional Indebtedness pursuant to Section 3.11(a), provided
that, if the Fixed Charge Coverage Ratio of the Issuer immediately
prior to such transaction is within the range set forth in Column A
below, then the pro forma Fixed Charge Coverage Ratio of the Issuer or
the surviving entity, as the case may be, immediately after such
transaction, shall be at least equal to the lesser of (1) the ratio
determined by multiplying the percentage set forth in Column (B) below
by the Fixed Charge Coverage Ratio of the Issuer prior to such
transaction and (2) 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, immediately after giving effect to such
transaction on a pro forma basis, the Fixed Charge Coverage Ratio of
the Issuer or the surviving entity, as the case may be, is 2.5:1 or
more, the calculation in the preceding proviso shall be inapplicable
and such transaction shall be deemed to have complied with the
requirements of this clause (5).
The Issuer shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with this Section 8.1. The Trustee shall
be entitled to rely conclusively upon such Officers' Certificate and Opinion of
Counsel.
SECTION 8.2 Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, transfer, lease, conveyance or other
disposition of all or substantially all of the assets of the Issuer in
accordance with Section 8.1, the successor corporation formed by such
consolidation or into or with which the Issuer is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such successor person has been named
as the Issuer herein and thereafter, except in the case of a lease, the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.
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ARTICLE NINE
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS; DEFEASANCE
SECTION 9.1 Satisfaction and Discharge of Indenture. If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest on all the Securities outstanding hereunder, as and when the same shall
have become due and payable, or (b) the Issuer shall have delivered to the
Trustee for cancellation all Securities theretofore authenticated (other than
any Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.6) or (c) all Securities not
theretofore cancelled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within 1
year or are to be called for redemption within 1 year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Issuer shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all the Securities (other than any Securities
which shall have been destroyed, lost or stolen and which shall have been
replaced or paid as provided in Section 2.6) not theretofore cancelled or
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or redemption date, as the case may
be, but excluding, however, the amount of any moneys for the payment of
principal of or interest on the Securities theretofore repaid to the Issuer in
accordance with the provisions of Section 9.4 or paid to any state or the
District of Columbia pursuant to its unclaimed property or similar laws, and if
the Issuer shall also pay or cause to be paid all other sums payable hereunder
by the Issuer, then this Indenture shall cease to be of further effect (except
as to (i) rights of registration of transfer and exchange, and the Issuer's
right of optional redemption, (ii) substitution of apparently mutilated,
defaced, destroyed, lost or stolen securities, (iii) rights of holders to
receive payments of principal thereof and interest thereon, (iv) the rights,
obligations and immunities of the Trustee hereunder, (v) the rights of the
securityholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them and (vi) the obligation
of the Issuer to maintain an office or agency as provided in Section 3.2) and
the Trustee, on demand of the Issuer accompanied by an Officers' Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture. The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities.
SECTION 9.2 Application by Trustee of Funds Deposited for
Payment of Securities. Subject to Section 9.4, all moneys deposited with the
Trustee pursuant to Section 9.1 or 9.5 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the holders of the particular
Securities for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds
except to the extent required by law.
SECTION 9.3 Repayment of Moneys Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture all moneys then
held by any paying agent under the provisions of this Indenture shall, upon
demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such
paying agent shall be released from all further liability with respect to such
moneys.
SECTION 9.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Three Years. Any moneys deposited with or paid to the Trustee or
any paying agent for the payment
51
of the principal of or interest on any Security and not applied but remaining
unclaimed for three years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee or
such paying agent, and the holder of such Security shall, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or unclaimed
property laws, thereafter look only to the Issuer for any payment which such
holder may be entitled to collect, and all liability of the Trustee or any
paying agent with respect to such moneys shall thereupon cease.
SECTION 9.5 Defeasance. At the Issuer's option, either (a) the
Issuer shall be deemed to have been Discharged (as defined below) from its
respective obligations under the Securities on the 91st day after the applicable
conditions set forth below have been satisfied or (b) the Issuer shall cease to
be under any obligation to comply with any term, provision or condition set
forth in Sections 3.9 through 3.18, 8.1 and 8.2 with respect to the Securities
at any time after the applicable conditions set forth below have been satisfied:
(1) the Issuer shall have deposited or caused to be deposited
irrevocably with the Trustee as funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
the Securities (i) funds in an amount sufficient to pay (A) principal
amount of the Securities in full on the date of maturity of the
Securities or a selected date of redemption of the Securities as
permitted under this Indenture (if such Securities are to be called for
redemption and satisfactory arrangements have been made with the
Trustee for the giving of notice of redemption) and (B) the interest on
such aggregate principal amount to the date of maturity of the
Securities or such date of redemption, taking into account all
intervening interest payment dates, for the period from the date
through which interest on the Securities has been paid to the date of
maturity of the Securities or such date of redemption and all other
sums payable hereunder by the Issuer; provided that such funds, if
invested, shall be invested only in U.S. Government obligations
maturing prior to the date of maturity of the Securities or, to the
extent applicable, such date of redemption and such intervening
interest payment dates; and, provided further, however, that the
Trustee shall have no obligation to invest such funds; or (ii) U.S.
Government obligations in such aggregate principal amount and maturity
on such dates as will, together with the income or increment to accrue
thereon, but without consideration of any reinvestment of such income
or increment, be sufficient to pay when due (including any intervening
interest payment dates) the amounts set forth in the foregoing clauses
(A) and (B); or (iii) a combination of (i) and (ii) sufficient (in the
cases of deposits made pursuant to (ii) or (iii)), in the opinion of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge each installment of principal of, and interest on, the
outstanding Securities on the dates such installments of principal or
interest are due;
(2) no Event of Default or event which with notice or lapse of
time would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit;
(3) the Issuer shall have delivered to the Trustee (A) an
Opinion of Counsel to the effect that the deposit of such funds or
investments or both to defease the Issuer's obligations in respect of
the Securities is in accordance with the provisions of this Indenture
and (B) either (i) an Opinion of Counsel to the effect that Holders of
the Securities will not recognize income, gain or loss for United
States federal income tax purposes as a result of the exercise of the
option
52
under this Section 9.5 and will be subject to United States federal
income tax on the same amount and in the same manner and at the same
time as would have been the case if such option had not been exercised,
or (ii) a private letter ruling to that effect directed to the Trustee
received from the United States Internal Revenue Service; and
(4) the deposit of such funds or investments shall not
contravene applicable law.
"Discharged" means that the Issuer shall be deemed to have
paid and discharged the entire indebtedness represented by, and obligations
under, the Securities and to have satisfied all the obligations under this
Indenture and the Securities (and the Trustee, at the request and the expense of
the Issuer, shall execute proper instruments acknowledging the same), except (i)
the rights of Holders of Securities to receive, from the trust fund described in
clause (1) above, payment of the principal of and the interest on the Securities
when such payments are due; (ii) the Issuer's obligations with respect to the
Securities under Section 2.5, 2.6, and 9.4; (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder, and (iv) the obligation of the
Issuer to maintain an office or agency as provided in Section 3.2.
ARTICLE TEN
MISCELLANEOUS PROVISIONS
SECTION 10.1 Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or upon
any obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future stockholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise, all such liability being expressly waived
and released by the acceptance of the Securities by the holders thereof and as
part of the consideration for the issue of the Securities.
SECTION 10.2 Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and their successors and the holders
of Senior Indebtedness and the holders of the Securities, any legal or equitable
right, remedy or claim under this Indenture or under any covenant or provision
herein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and their successors and of the holders of Senior
Indebtedness and the holders of the Securities.
SECTION 10.3 Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Issuer shall bind its successors and
assigns, whether so expressed or not.
SECTION 10.4 Notices and Demands on Issuer, Trustee and
Securityholders. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Securities to or on the Issuer may be given or served by hand delivery, by
overnight courier or by being deposited postage prepaid, first-class mail
(except, in each case, as otherwise specifically provided herein), in each case
addressed (until another address of the Issuer is filed by the Issuer with the
Trustee) to Advantica Restaurant Group, Inc., 000 Xxxx Xxxx Xxxxxx,
53
Spartanburg, South Carolina 29319, Attention: Chief Financial Officer. Any
notice, direction, request or demand by the Issuer or any securityholder to or
upon the Trustee shall be deemed to have been sufficiently given or made, for
all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and delivered by hand, delivered by overnight courier or mailed,
first-class postage prepaid, to each Holder entitled thereto, at his last
address as it appears in the Security register. In any case where notice to
Holders is given by any of the foregoing means, neither the failure to give such
notice by such means, nor any defect in any notice so given, to any particular
Holder shall affect the sufficiency of such notice with respect to other
Holders. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer and
securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
SECTION 10.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture,
the Issuer shall furnish to the Trustee an Officers' Certificate stating that
all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) 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 (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of or representations by counsel, unless such officer knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters information with respect to which is in the
possession of the Issuer, upon the certificate, statement or opinion of or
representations by an officer or officers of the Issuer, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
54
Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
SECTION 10.6 Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of interest on or principal of the Securities or the
date fixed for redemption of any Security shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the date of maturity or the date fixed for redemption, and no interest shall
accrue for the period after such date.
SECTION 10.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
by operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of
1939 (an "incorporated provision"), such incorporated provision shall control.
SECTION 10.8 New York Law to Govern. This Indenture and each
Security shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
said state, except as may otherwise be required by mandatory provisions of law.
SECTION 10.9 Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 10.10 Effect of Headings. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1 Right of Optional Redemption. The Securities not
may be redeemed, in whole or in part, at the option of the Issuer prior to
January 15, 2003. On and after such date, the Securities may be redeemed, in
whole or in part, at the option of the Issuer upon the terms and subject to the
conditions set forth in the form of Security hereinabove recited.
Notwithstanding the foregoing, from January 15, 1998 until January 15, 2001, the
Issuer may redeem up to 35% of the aggregate principal amount of Securities
outstanding on the date hereof at a redemption price (expressed as a percentage
of the principal amount) of 110%, plus accrued and unpaid interest, if any, to
the redemption date, from the net proceeds of any public offering for cash of
any Equity Interests of the Issuer or any subsidiary thereof.
55
SECTION 11.2 Notice of Redemption; Partial Redemptions. Notice
of redemption to the holders of Securities to be redeemed as a whole or in part
shall be given by mailing notice of such redemption by first class mail, postage
prepaid, at least 30 days and not more than 60 days prior to the date fixed for
redemption to such holders of Securities at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives the notice. Failure to give notice by mail, or any defect in
the notice to the holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption of
any other Security.
The notice of redemption to each such holder shall specify the
principal amount of each Security held by such holder to be redeemed, the date
fixed for redemption, the redemption price, the place or places of payment, that
payment will be made upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. In case any Security is to be
redeemed in part only the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will be
issued.
The notice of redemption of Securities to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
3.4) an amount of money sufficient to redeem on the redemption date all the
Securities so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. If less than
all the outstanding Securities are to be redeemed the Issuer will deliver to the
Trustee at least 70 days prior to the date fixed for redemption an Officers'
Certificate stating the aggregate principal amount of Securities to be redeemed.
If less than all the Securities are to be redeemed the Trustee
shall select in such manner as it shall deem appropriate and fair but generally
pro rata or by lot, Securities to be redeemed in whole or in part. Securities
may be redeemed in part in multiples of $1,000 only. The Trustee shall promptly
notify the Issuer in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security which has been or
is to be redeemed.
SECTION 11.3 Payment of Securities called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption, and on
and after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so called for redemption
shall cease to accrue and, except as provided in Sections 5.5 and 9.4, such
Securities shall cease from and after the date fixed for redemption to be
entitled to any benefit or security under this Indenture, and the holders
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thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice said Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided that any semi-annual payment of interest becoming due on the date fixed
for redemption shall be payable to the holders of such Securities registered as
such on the relevant record date subject to the terms and provisions of Section
2.4 hereof.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Security.
Upon presentation of any Security redeemed in part only, the
Issuer shall execute and the Trustee shall authenticate and deliver to or on the
order of the holder thereof, at the expense of the Issuer, a new Security or
Securities, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
SECTION 11.4 Exclusion of Certain Securities from Eligibility
for Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated, by either (a) the Issuer or (b) an entity specifically
identified in such written statement directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer.
SECTION 11.5 Offer to Redeem by Application of Net Proceeds.
At such time as the Issuer determines to make a Net Proceeds Offer pursuant to
the provisions of Section 3.13 hereof, the Issuer shall deliver to the Trustee a
notice to such effect specifying the aggregate principal amount of the
Securities for which the Net Proceeds Offer will be made. Within 15 days
thereafter, the Trustee shall select the Securities to be offered to be redeemed
in accordance with Section 11.2 hereof. Within 10 days thereafter the Issuer
shall mail or cause the Trustee to mail (in the Issuer's name and at its expense
and pursuant to an Officer's Certificate as required by Section 3.13 hereof) a
Net Proceeds Offer to redeem to each Holder of Securities whose Securities are
to be offered to be redeemed. The Net Proceeds Offer shall identify the
Securities to which it relates and shall contain the information required by the
second paragraph of Section 11.2 hereof and shall provide for a redemption date
no earlier than 65 days after the mailing of the Net Proceeds Offer.
A Holder receiving a Net Proceeds Offer may elect to have
redeemed the Securities to which the Net Proceeds Offer relates by providing
written notice thereof to the Trustee and the Issuer on or before 35 days
preceding the redemption date and shall thereafter complete the form entitled
"Option of Holder to Elect to Have Security Redeemed" on the reverse of the
Security (with the box checked referencing the Net Proceeds Offer pursuant to
this Section 11.5) and surrender the Security to the Issuer, or depositary, if
appointed by the Issuer, or a paying agent at least three days prior to the
redemption date. A Holder may not elect to have redeemed less than all of the
Securities to which the Net Proceeds Offer relates.
Other than as specifically provided in this Section 11.5, any
redemption pursuant to this Section 11.5 shall be made pursuant to the
provisions of Sections 11.2 through 11.4 hereof.
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SECTION 11.6 Provisions Governing Redemption Pursuant to
Change of Control Offer. Any redemption of Securities pursuant to any Holder's
acceptance of a Change of Control Offer shall be governed by the provisions of
Section 3.18 of this Indenture and, to the extent applicable and not
inconsistent therewith, the provisions of Sections 11.2 through 11.4 hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed all as of the date first above written.
ADVANTICA RESTAURANT GROUP, INC.
By
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Xxxxxx X. Xxxxxxxxx, Vice President
Attest:
By
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Xxxxxx X. Xxxxxx, Secretary
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By
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Title:
59
