EXHIBIT 4.1
INDENTURE dated as of November 26, 1997 among DESA International,
Inc., a Delaware corporation (the "Company"), DESA Holdings Corporation, the
parent of the Company and a guarantor ("Holdings") and Marine Midland Bank, as
trustee (the "Trustee").
The Company, Holdings and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the Series A 97/8% Senior Subordinated Notes due 2007 (the "Unregistered Notes")
and the Series B 97/8% Senior Subordinated Notes due 2007 (the "New Notes" and,
together with the Unregistered Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Additional Notes" means up to $75.0 million aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture, in
accordance with this Indenture hereof (and substantially in the form of Exhibit
A attached hereto), as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Premium" means, with respect to a Note, the greater of
(i) 4.9375% of the then outstanding principal amount of such Note or (ii) the
excess of (A) the present value of the remaining required interest and principal
payments due on such Note (exclusive of accrued and unpaid interest and
Liquidated Damages, if any), computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the then outstanding principal
amount of such Note.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory or other current assets in the
ordinary course of business or obsolete equipment (provided that the sale,
lease, conveyance or other disposition of all or substantially all of the assets
of (x) the Company and its Restricted Subsidiaries taken as a whole or (y)
Holdings and its Restricted Subsidiaries as a whole, will be governed by Section
4.15 hereof and/or Section 5.01 hereof and not by the provisions of Section 4.10
hereof), and (ii) the issue or sale by the Company, Holdings or any of their
respective Subsidiaries of Equity Interests of any of the Company's or
Holdings' Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions that have a fair market
value (as determined in good faith by the Board of Directors of the Company) in
excess of $1.0 million. Notwithstanding the foregoing: (i) a transfer of assets
by the Company to a Wholly Owned Restricted Subsidiary of the Company or by a
Subsidiary to the Company or to a Wholly Owned Restricted Subsidiary of the
Company, (ii) a transfer of assets by Holdings to a Wholly Owned Restricted
Subsidiary of Holdings or by a Subsidiary (other than the Company or a
Subsidiary of the Company) to Holdings or to a Wholly Owned Restricted
Subsidiary of Holdings, (iii) an issuance of Equity Interests by Wholly Owned
Restricted Subsidiary of the Company or to another Wholly Owned Restricted
Subsidiary of the Company, (iv) an issuance of Equity Interests by a Wholly
Owned Restricted Subsidiary of Holdings (other than the Company or any of its
Subsidiaries) to Holdings or to another Wholly Owned Restricted Subsidiary of
Holdings, and (v) a Restricted Payment that is permitted by Section 4.07 hereof
will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale and leaseback transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended).
"Average Life to Stated Maturity" means, when applied, to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of a Person, or any
authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company or Holdings, as applicable,
to have been duly adopted by the Board of Directors of the Company or Holdings,
as applicable, and to be in full force and effect on the date of such
certification.
"Borrowing Base" means, as of any date, an amount equal to the sum of
85% of accounts receivable of the Company, Holdings and the Restricted
Subsidiaries as of such date that are not more than 90 days past due, plus 65%
of the book value of all inventory owned by the Company, Holdings and the
Restricted Subsidiaries as of such date, in each case calculated on a
consolidated basis and in accordance with GAAP. To the extent that information
is not available as to the amount of accounts receivable or inventory as of a
specific date, the Company and Holdings may utilize the most recent available
information for purposes of calculating the Borrowing Base.
"Business Day" means any day other than a Legal Holiday.
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"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participation, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (iii) certificates of deposit
and eurodollar time deposits with maturities of one year or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any lender party to the New
Credit Facility or with any domestic commercial bank having capital and surplus
in excess of $500.0 million and a Xxxxx Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) above entered into
with any financial institution meeting the qualifications specified in clause
(iii) above, (v) commercial paper of a domestic issuer having a rating of at
least A-1 by Standard and Poor's Ratings Services or P-1 by Xxxxx'x Investors
Service, Inc. maturing within twelve months after the date of acquisition and
(vi) any mutual fund which invests solely in investments of the types described
in clauses (i) through (v) above.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger of consolidation), in one or a series of related transactions, of all or
substantially all of the assets of either (x) Holdings and its Restricted
Subsidiaries taken as a whole or (y) the Company and its Restricted Subsidiaries
taken as a whole, in each case, to any "person" (as such term is used in Section
13(d)(3) of the Exchange Act) other than the Principals or their Related
Parties, (ii) the adoption of a plan relating to the liquidation or dissolution
of the Company or Holdings, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) (a) prior to the
initial underwritten public offering by the Company or Holdings of its common
stock pursuant to an effective registration statement under the Securities Act
(the "IPO") the result of which is that either (A) the Principals and their
Related Parties become the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that for purposes of
calculating the beneficial ownership of any person, such person shall be deemed
to have "beneficial ownership" of all securities that such person has the right
to acquire, whether such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition) of less than 40% of the Voting
Stock of the Company or Holdings (measured by voting power rather than number of
shares) or (B) any person (as defined above), other than the Principals and
their Related Parties, becomes the beneficial owner (as defined above), directly
or indirectly, of 40% or more of the Voting Stock of the Company or Holdings and
such person is or becomes, directly or indirectly, the beneficial owner of a
greater percentage of the voting power of the Voting Stock of the Company or
Holdings, calculated on a fully diluted basis, than the percentage beneficially
owned by the Principals and their Related Parties, or (b) after the IPO, any
person (as defined above), other than the Principals and their Related Parties,
becomes the beneficial owner (as defined above), directly or indirectly, of 35%
or more of the Voting Stock of the Company or Holdings and such person is or
becomes, directly or indirectly, the beneficial owner of a greater percentage of
the voting power of the Voting Stock of the Company or Holdings, calculated on a
fully
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diluted basis, than the percentage beneficially owned by the Principals and
their Related Parties, (iv) the first day on which a majority of the members of
the Board of Directors of the Company or Holdings are not Continuing Directors,
(v) the first day on which Holdings ceases to own 100% of the outstanding Equity
Interests of the Company, or (vi) the Company or Holdings consolidates with, or
merges with or into, any Person or sells, assigns, conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any Person, or
any Person consolidates with, or merges with or into, the Company or Holdings,
in any such event pursuant to a transaction in which any of the outstanding
Voting Stock of the Company or Holdings is converted into or exchanged for cash,
securities or other property, other than any such transaction where the Voting
Stock of the Company or Holdings outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock (other than
Disqualified Stock) of the surviving or transferee Person constituting a
majority of the outstanding shares of such Voting Stock of such surviving or
transferee Person (immediately after giving effect to such issuance). For
purposes of this definition, any transfer of an equity interest of an entity
that was formed for the purpose of acquiring Voting Stock of the Company or
Holdings will be deemed to be a transfer of such portion of such Voting Stock as
corresponds to the portion of the equity of such entity that has been so
transferred.
"Company" means DESA International, Inc., a Delaware corporation.
"Consolidated Cash Flow" means, with respect to the Company or
Holdings for any period, the Consolidated Net Income of such Person for such
period plus, without duplication, (i) an amount equal to any extraordinary loss
plus any net loss realized in connection with an Asset Sale (to the extent such
losses were deducted in computing such Consolidated Net Income), plus (ii)
provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (iii) consolidated
interest expense of such Person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), to the extent that any such expense was deducted in computing such
Consolidated Net Income, plus (iv) depreciation, amortization (including
amortization of goodwill and other intangibles but excluding amortization of
prepaid cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it represents
an accrual of or reserve for cash expenses in any future period or amortization
of a prepaid cash expense that was paid in a prior period) of such Person and
its Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash expenses were deducted in computing such
Consolidated Net Income, minus (v) non-cash items increasing such Consolidated
Net Income for such period, in each case, on a consolidated basis and determined
in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
based on the income or profits of, and the depreciation and amortization and
other non-cash charges of, a Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in the same proportion) that the Net Income of such Subsidiary was included
in calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company or Holdings, as the case may be, by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders.
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"Consolidated Net Income" means, with respect to the Company or
Holdings for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (i) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a
Restricted Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded and (v) the Net Income of any
Unrestricted Subsidiary shall be excluded, whether or not distributed to the
Company, Holdings or one of their Subsidiaries.
"Consolidated Net Worth" means, with respect to the Company or
Holdings as of any date, the sum of (i) the consolidated equity of the common
stockholders of such Person and its consolidated Subsidiaries as of such date,
plus (ii) the respective amounts reported on such Person's balance sheet as of
such date with respect to any series of 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 such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of this Indenture
in the book value of any asset owned by such Person or a consolidated Subsidiary
of such Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
Permitted Investments), and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined in
accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or Holdings who (i) was a member
of such Board of Directors on the date of this Indenture or (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board at the time
of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 12.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 3 thereof.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depository with respect to the Notes, until a successor shall
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have been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) so long as any Senior
Indebtedness under the New Credit Facility is outstanding, such Senior
Indebtedness and (ii) thereafter, any other Senior Indebtedness permitted under
this Indenture the principal amount of which is $50 million or more and that has
been designated by the Company as "Designated Senior Indebtedness" in the
instrument evidencing such Senior Indebtedness.
"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 redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature; provided, however,
that any Capital Stock that would constitute Disqualified Stock solely because
the holders thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall
not constitute Disqualified Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock pursuant to
such provisions unless such repurchase or redemption complies with Section 4.07
hereof.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company and
Holdings pursuant to the Registration Rights Agreement to exchange New Notes for
Unregistered Notes.
"Exchange Notes" means the 12% Junior Subordinated Notes due December
31, 2009 of Holdings, issuable pursuant to the terms of the Holdings Preferred
Stock as in effect on the Issue Date.
"Existing Indebtedness" means Indebtedness of the Company, Holdings
and their Subsidiaries (other than Indebtedness under the New Credit Facility)
in existence on the date of this Indenture, until such amounts are repaid.
"Fixed Charges" means, with respect to the Company or Holdings for
any period, the sum, without duplication, of (i) the consolidated interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations but excluding amortization of debt issuance costs), (ii)
the consolidated interest expense of such Person and its Restricted Subsidiaries
that was capitalized during such period, (iii) any interest expense on
Indebtedness of another Person that is guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries (whether or not such guarantee or Lien is called
upon), and (iv) the product of (a) all cash dividend payments on any series of
preferred stock of such Person or any of its Restricted Subsidiaries, other than
dividend payments on Equity Interests payable solely in Equity Interests (other
than Disqualified Stock)
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of the Company or Holdings, as the case may be, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person and
its Restricted Subsidiaries, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to the Company or
Holdings for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Fixed Charges of such
Person and its Restricted Subsidiaries for such period. In the event that the
Company, Holdings or any of the Restricted Subsidiaries incurs, assumes,
guarantees or redeems any Indebtedness (other than revolving credit borrowings)
or issues or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions that have been made
by the Company, Holdings or any of the Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, (ii) the Consolidated Cash Flow attributable to discontinued operations,
as determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date , shall be excluded, and (iii) the Fixed Charges
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise to such Fixed
Charges will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Note" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 3 to the form of
the Note attached hereto as Exhibit A.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantee" means a guarantee of the Notes (including the Holdings
Guarantee and each Subsidiary Guarantee).
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"Guarantor" means (i) Holdings, (ii) each Subsidiary that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
(iii) their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or the value of foreign currencies purchased or received by
the Company in the ordinary course of business.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means Desa Holdings Corporation, a Delaware corporation
and parent of the Company.
"Holdings Guarantee" means the guarantee of the Notes by Holdings,
substantially in the form of Exhibit C attached hereto.
"Holdings Preferred Stock" means Holdings' Series C 12% Senior
Redeemable Exchangeable Pay-In-Kind Preferred Stock, par value $.01 per share,
as in effect on the Issue Date.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, as well as all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest, and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Notes" means $130.0 million aggregate principal amount of
Notes issued under this Indenture on the Issue Date.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel, and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company, Holdings or any of their respective Subsidiaries sells or
otherwise disposes of any Equity Interests of any direct or indirect Restricted
Subsidiary of the Company or Holdings such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company or Holdings, the Company and/or Holdings, as the case may be, shall be
deemed to have made an Investment on the date of any such sale or disposition
equal
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to the fair market value of the Equity Interests of such Restricted Subsidiary
not sold or disposed of in an amount determined as provided in Section 4.07
hereof.
"Issue Date" means the first date of issuance of Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), or (b)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company, Holdings or any of the Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale, net of the
direct costs relating to such Asset Sale (including,without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness (other than Indebtedness under the New Credit
Facility) secured by a Lien on the asset or assets that were the subject of such
Asset Sale and any reserve for adjustment in respect of the sale price of such
asset or assets in accordance with GAAP.
"New Credit Facility" means that certain bank facility, dated as of
the Issue Date by and among the Company, Holdings and NationsBank, N.A., as
administrative agent, issuing bank and swing line bank and the other parties
thereto, together with all "Loan Documents" as defined therein and all other
documents, instruments and agreements executed in connection therewith
(including, without limitation, any guarantees, security documents and Hedging
Obligations), and in each case as amended, supplemented or modified from time to
time, including any renewal, refunding, replacement, restructuring or
refinancing of all or a portion thereof from time to time whether by the same or
any other agent, lender or other party thereto.
9
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company, nor Holdings nor any of the Restricted Subsidiaries (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (b) is directly or indirectly liable (as a
guarantor or otherwise), or (c) constitutes the lender; and (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company, Holdings or any of the Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity; and (iii) as to which the lenders have
been notified in writing that they will not have any recourse to the stock or
assets of the Company, Holdings or any of its Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" means the Company's 97/8% Senior Subordinated Notes due 2007
issued under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board of Directors, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means (a) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company; (b) any Investment by
Holdings or any of its Subsidiaries (other than the Company or a Subsidiary of
the Company) in Holdings or in a Wholly Owned Restricted Subsidiary of Holdings;
(c) any Investment in Cash Equivalents; (d) any Investment by the Company or any
of its Restricted Subsidiaries in a Person, if as a result of such Investment
(i) such Person becomes a Wholly Owned Restricted Subsidiary of the Company or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys all or substantially all of its assets to, or is liquidated
into, the Company or a Wholly Owned Restricted Subsidiary of the Company; (e)
any Investment by Holdings or any of its Restricted Subsidiaries in a Person, if
as a result of such Investment (i) such Person becomes a Wholly Owned Restricted
Subsidiary of Holdings or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys all or substantially all of
its assets to, or is liquidated into, Holdings or a Wholly Owned Restricted
Subsidiary of Holdings; (f) any Restricted Investment made as a result of the
receipt of non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10 hereof; (g) any acquisition of assets solely
10
in exchange for the issuance of Equity Interests (other than Disqualified Stock)
of the Company or Holdings; and (h) other Investments in any Person having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (h) that are at the time
outstanding, not to exceed $5.0 million.
"Permitted Liens" means (i) Liens securing Indebtedness under the New
Credit Facility; (ii) Liens on assets of Subsidiaries of the Company in favor of
the Company; (iii) Liens on assets of Subsidiaries of Holdings (other than the
Company or any of its Subsidiaries) in favor of Holdings; (iv) Liens on property
of a Person existing at the time such Person is merged into or consolidated with
the Company, Holdings or any of their respective Restricted Subsidiaries;
provided that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those of the
Person merged into or consolidated with the Company or Holdings or such
Restricted Subsidiary, as the case may be; (v) Liens on property existing at the
time of acquisition thereof by the Company, Holdings or any of their respective
Subsidiaries, provided that such Liens were in existence prior to the
contemplation of such acquisition; (v) Liens to secure the performance of
statutory or regulatory obligations, leases, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course of
business; (vi) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of the second paragraph of Section 4.09
hereof covering only the assets acquired with such Indebtedness; (vii) Liens
existing on the date of this Indenture; (viii) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor; (ix)
statutory and common law Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other similar Liens arising in
the ordinary course of business with respect to amounts not yet more than ninety
days overdue or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made; (x) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance and
other types of social security; (xi) easements, rights-of-way, municipal and
zoning ordinances and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the ordinary course of
business of the Company, Holdings or any of the Restricted Subsidiaries; (xii)
Liens encumbering property or assets under construction arising from progress or
partial payments by a customer of the Company, Holdings or its Restricted
Subsidiaries relating to such property or assets; (xiii) any interest or title
of a lessor in the property subject to any Capitalized Lease or operating lease;
(xiv) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xv) Liens in favor of the Company, Holdings or any Restricted
Subsidiary; (xvi) Liens arising from the rendering of a final judgment or order
against the Company, Holdings or any Restricted Subsidiary that does not give
rise to an Event of Default; (xvii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (xviii) Liens encumbering customary
initial deposits and margin deposits, and other Liens that are either within the
general parameters customary in the industry and incurred in the ordinary course
of business, in each case securing Hedging Obligations; (xix) Liens arising out
of conditional sale, title retention, consignment or similar arrangements for
the sale of goods entered into by the Company, Holdings or any of the Restricted
Subsidiaries in the ordinary course of business in accordance with the past
practices of the Company, Holdings and the Restricted Subsidiaries prior to the
Issue Date; (xx) Liens incurred in the ordinary course of business of the
Company, Holdings or any of their respective Subsidiaries with respect to
obligations that do not exceed $5.0 million at any one time outstanding and that
(a) are not incurred in connection with the borrowing of money or the obtaining
of advances or credit (other than trade credit in the ordinary course of
business) and
11
(b) do not in the aggregate materially detract from the value of the property or
materially impair the use thereof in the operation of business by the Company,
Holdings or such Subsidiary; (xxi) Liens on assets of Unrestricted Subsidiaries
that secure Non-Recourse Debt of Unrestricted Subsidiaries; and (xxii) Liens on
assets of the Company securing Obligations under any Senior Indebtedness of the
Company and Liens on assets of a Guarantor securing Obligations under any Senior
Indebtedness of such Guarantor.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company, Holdings or any of their respective Subsidiaries issued in exchange
for, or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund Existing Indebtedness or other Indebtedness of the Company,
Holdings or any of the Restricted Subsidiaries incurred in accordance with this
Indenture (other than Indebtedness incurred in accordance with clauses (i),
(ii), (iv), (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi)
and (xvii) of the second paragraph of Section 4.09 hereof) provided that: (i)
the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such Permitted
Refinancing Indebtedness has a final maturity date at or later than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; (iii) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is subordinated in right of payment to the Notes, such Permitted Refinancing
Indebtedness has a final maturity date at or later than the final maturity date
of, and is subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iv) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is Indebtedness of the Company or its
Restricted Subsidiaries, such Indebtedness is incurred by the Company, Holdings
or the Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and (v) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
is Indebtedness of Holdings or its Restricted Subsidiaries (other than the
Company and its Restricted Subsidiaries), such Indebtedness is incurred by
Holdings or the Restricted Subsidiary who is the obligor of the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Principals" means (i) X.X. Childs Equity Partners, L.P., (ii) each
Affiliate of X.X. Childs Equity Partners, L.P. as of the Issue Date, and (iii)
each officer or employee (including their respective immediate family members)
of X.X. Childs Associates, L.P. as of the Issue Date.
"Public Equity Offering" means an underwritten public offering of
common stock (other than Disqualified Stock) of the Company or Holdings,
pursuant to an effective registration statement filed with the Commission in
accordance with the Securities Act; provided, however, that, in the case of a
Public Equity Offering by Holdings, Holdings contributes to the capital of the
Company net cash proceeds thereof in an amount sufficient to redeem the Notes
called for redemption in accordance with the terms of this Indenture.
12
"Qualified Subordinated Indebtedness" means Indebtedness of Holdings
which (i) does not require payments (other than payments made with additional
Qualified Subordinated Indebtedness) in respect of principal, premium, interest
or otherwise (pursuant to mandatory redemption, sinking fund obligation or
otherwise) prior to the date that is 91 days after the date on which the Notes
mature, (ii) does not directly or indirectly provide for any restrictive
covenants or events of default other than the covenants and events of default
which are substantially the same as those provided for in the Exchange Notes (as
in effect on the Issue Date) and (iii) is subordinated in right of payment to
the Notes at least to the same extent as the Holdings Preferred Stock is
subordinated to the Notes on the Issue Date (including with respect to the
standstill provisions provided therein).
"Recapitalization" means the recapitalization of Holdings, pursuant
to the Stock Purchase Agreement, as more fully described in the Company's
Offering Memorandum pertaining to the Notes, dated November 21, 1997.
"Stock Purchase Agreement" means that Recapitalization Agreement,
dated October 8, 1997, among X.X. Childs Equity Partners, L.P., Holdings, and
the stockholders of Holdings named therein, as amended and restated as of
November 25, 1997 and in effect on the Issue Date.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November 26, 1997, by and among the Company, Holdings and
the other parties named therein, as such agreement may be amended, modified or
supplemented from time to time.
"Related Party" with respect to any Principal means (A) any
controlling stockholder or 80% (or more) owned Subsidiary of such Principal or
(B) or trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding and 80% or more
controlling interest of which consist of such Principal and/or such other
Persons referred to in the immediately preceding clause (A).
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Indebtedness.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration department of the Trustee
(or any successor group of the Trustee) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
13
"Senior Indebtedness" means (i) all "Obligations" in respect of and
as defined in the New Credit Facility (including, without limitation, interest
that accrues after the filing of a petition initiating any action or proceeding
under Bankruptcy Law or any other bankruptcy, insolvency or similar law or
statute protecting creditors in effect in any jurisdiction), whether or not such
interest accrues after the filing of such petition for purposes of Bankruptcy
Law or such other law or statute or is an allowed claim in any such action or
proceeding, whether existing on the date hereof of hereafter incurred, and (ii)
any other Indebtedness permitted to be incurred by the Company or any Guarantor
pursuant to the terms of this Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include (w) any
liability for federal, state, local or other taxes owed or owing by the Company
or any Guarantor, (x) any Indebtedness of the Company or any Guarantor to any of
their respective Subsidiaries or other Affiliates, except to the extent any such
Indebtedness is pledged as security under the New Credit Facility, (y) any trade
payables or (z) any Indebtedness that is incurred in violation of this
Indenture.
"Significant Restricted Subsidiary" means a Restricted Subsidiary
that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) or (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means each guarantee of the Notes,
substantially in the form of Exhibit C attached hereto, issued by a Subsidiary
of Holdings or the Company pursuant to this Indenture.
"Subsidiary Guarantor" means each Subsidiary that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture, its
respective successors and assigns.
"Tax Sharing Agreement" means the tax sharing agreement among
Holdings, the Company and any one or more of Holdings' subsidiaries, as amended
from time to time, so long as the method of calculating the amount of the
Company's payments, if any, to be made thereunder is not less favorable to the
Company than as provided in such agreement as in effect on the Issue Date
(except to the extent required to reflect changes in applicable federal or state
tax laws), as determined in good faith by the Board of Directors of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date hereof; provided, however, that in the
event the Trust Indenture Act of 1939 is amended after such date, then "TIA"
means, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.
14
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two Business Days prior
to the date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining Average Life to Stated Maturity of the Notes;
provided, however, that if the Average Life to Stated Maturity of the Notes is
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Rate shall be obtained by
linear interpolation (calculated to the nearest one-twelfth of a year) from the
weekly average yields of United States Treasury securities for which such yields
are given, except that if the Average Life to Stated Maturity of the Notes is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors of the Company or Holdings, as the case may be, as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b)
is not party to any agreement, contract, arrangement or understanding with the
Company, Holdings or any Restricted Subsidiary unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company, Holdings or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company or
Holdings (as determined in good faith by the Board of Directors of the Company
or Holdings, as the case may be); (c) is a Person with respect to which neither
the Company, nor Holdings nor any of the Restricted Subsidiaries has any direct
or indirect obligation (x) to subscribe for additional Equity Interests or (y)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and (d) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company, Holdings or any of the Restricted Subsidiaries. Any
such designation by such Board of Directors shall be evidenced to the Trustee by
filing with the Trustee a Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of such
date (and, if such Indebtedness is not permitted to be incurred as of such date
by Section 4.09 hereof, the Company and Holdings shall be in default of such
covenant). The Board of Directors of the Company or Holdings may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted by Section 4.09 hereof, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (ii) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" means, with respect to any Person, the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
15
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person and one or more Wholly Owned Restricted Subsidiaries
of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction".................................... 4.11
"Asset Sale"............................................... 4.10
"Asset Sale Offer"......................................... 3.09
"Bankruptcy Law"........................................... 4.01
"Change of Control Offer".................................. 4.15
"Change of Control Payment"................................ 4.15
"Change of Control Payment Date"........................... 4.15
"Covenant Defeasance"...................................... 8.03
"Custodian"................................................ 4.13
"Event of Default"......................................... 6.01
"Excess Proceeds".......................................... 4.10
"Guaranteed Debt".......................................... 4.18
"incur".................................................... 4.09
"Legal Defeasance" ........................................ 8.02
"Offer Amount"............................................. 3.09
"Offer Period"............................................. 3.09
"Paying Agent"............................................. 2.03
"Payment Blockage Notice"..................................10.04
"Payment Default".......................................... 6.01
"Permitted Debt"........................................... 4.09
"Purchase Date"............................................ 3.09
"Registrar"................................................ 2.03
"Restricted Payments"...................................... 4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
16
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, Holdings and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or
rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto, which is part of this Indenture.
The Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes and the Holdings
Guarantee shall constitute, and are hereby expressly made, a part of this
Indenture and the Company, Holdings and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 3
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 3 thereto).
17
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall be made by
the Trustee or the Note Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer of the Company shall sign the Notes for the Company by
manual or facsimile signature. An Officer of a Guarantor shall sign the
Guarantee for such Guarantor by manual or facsimile signature.
If the Officer of the Company or a Guarantor whose signature is on a
Note or a Guarantee, as the case may be, no longer holds that office at the time
a Note is authenticated, the Note or the Guarantee, as the case may be, shall
nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by one
Officer, authenticate Notes for original issue up to the aggregate principal
amount stated in paragraph 4 of the Notes. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company, Holdings
or any of their Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes.
18
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company, Holdings or
any of their Subsidiaries) shall have no further liability for the money. If the
Company, Holdings or any of their Subsidiaries acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be
accompanied by the following additional information
and documents, as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a
19
certification to that effect from such Holder
(in substantially the form of Exhibit B hereto);
or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities
Act) in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 or Rule
904 under the Securities Act or pursuant to an
effective registration statement under the
Securities Act, a certification to that effect
from such Holder (in substantially the form of
Exhibit B hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that effect
from such Holder (in substantially the form of
Exhibit B hereto) and an Opinion of Counsel from
such Holder or the transferee reasonably
acceptable to the Company and to the Registrar
to the effect that such transfer is in
compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest in
a Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Definitive Note is
being transferred by such Holder to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the
Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository (and/or the Trustee), in accordance with this Indenture and the
procedures of the Depository therefor, which shall include restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
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(i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is
customary for the Depository, from the Depository or its
nominee on behalf of any Person having a beneficial
interest in a Global Note, and, in the case of a Transfer
Restricted Security, the following additional information
and documents (all of which may be submitted by
facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as
being the beneficial owner, a certification to
that effect from such Person (in substantially
the form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities
Act or pursuant to an exemption from
registration in accordance with Rule 144 or Rule
904 under the Securities Act or pursuant to an
effective registration statement under the
Securities Act, a certification to that effect
from the transferor (in substantially the form
of Exhibit B hereto); or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act,
a certification to that effect from the
transferor (in substantially the form of Exhibit
B hereto) and an Opinion of Counsel from the
transferee or transferor reasonably acceptable
to the Company and to the Registrar to the
effect that such transfer is in compliance with
the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute
and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the
appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes
are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository. If
at any time:
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(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as
Depository for the Global Notes and a successor Depository
for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange
therefor or substitution thereof) shall bear legends in
substantially the following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE
144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) (A) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (1) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144 under
the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that
is a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a
22
Definitive Note that does not bear the legend set
forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the
legend set forth in (i) above, but shall continue to
be subject to the provisions of Section 2.06(c)
hereof; provided, however, that with respect to any
request for an exchange of a Transfer Restricted
Security that is represented by a Global Note for a
Definitive Note that does not bear the legend set
forth in (i) above, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in
writing to the Registrar that such request is being
made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 2.02
hereof, the Trustee shall authenticate New Notes in
exchange for Unregistered Notes accepted for exchange in
the Exchange Offer, which New Notes shall not bear the
legend set forth in (i) above, and the Registrar shall
rescind any restriction on the transfer of such Notes;
provided, however, in each case, the Company shall not
issue New Notes to a Holder of such Unregistered Notes if
such Holder is either (A) a broker-dealer, (B) a Person
participating in the distribution of the Unregistered
Notes or (C) a Person who is an affiliate (as defined in
Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10,
4.15 and 9.05 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
23
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations
of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture,
as the Definitive Notes or Global Notes surrendered
upon such registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the
opening of business 15 days before the day of
any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of
business on the day of selection; or
(B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note
being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next
succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name
any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of
principal of and interest on such Notes, and neither
the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vii)The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by one Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding.
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Except as set forth in Section 2.09 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, Holdings, a Subsidiary
or an Affiliate of any thereof) holds, on a redemption date or maturity date,
money sufficient to pay Notes payable on that date, then on and after that date
such Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, Holdings or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or
Holdings, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
25
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture shall be determined as provided for in TIA ss.
316(c).
SECTION 2.14. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number and,
if it does so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company will
promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.15. COMPUTATION OF INTEREST.
Interest on the Notes will be computed on the basis of a 360-day
year comprised of twelve 30- day months.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate. In the event of
26
partial redemption by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company shall mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemp tion price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
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SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price, plus accrued and unpaid interest and
Liquidated Damages, if any, to such date. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay the
redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of
the amounts necessary to pay the redemption price of, and accrued interest on,
all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and, upon the Company's written request, the Trustee shall authenticate
for the Holder at the expense of the Company a new Note equal in principal
amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section 3.07,
the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to December 15, 2002. Thereafter, the Company shall have the
option to redeem the Notes, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
December 15 of the years indicated below:
Year Percentage
2002.............................................104.9375%
2003.............................................103.2917%
2004 ............................................101.6458%
2005 and thereafter..............................100.0000%
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(b) Notwithstanding the provisions of clause (a) of this Section
3.07, at any time prior to December 15, 2000, the Company may (but shall not
have the obligation to) redeem up to 35% of the original aggregate principal
amount of Notes (including Additional Notes) at a redemption price of 109.875%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages thereon to the redemption date, with the net cash proceeds of one or
more Public Equity Offerings; provided that at least 65% in aggregate principal
amount of Notes (including any Additional Notes) remain outstanding immediately
after the occurrence of such redemption; and provided, further that such
redemption shall occur within 60 days of the date of the closing of such Public
Equity Offering.
(c) Upon the occurrence of a Change of Control prior December 15,
2002, the Notes will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 nor more than 60 days prior notice to each Holder
of Notes to be redeemed, at a redemption price equal to the sum of (i) the then
outstanding principal amount thereof plus (ii) accrued and unpaid interest
thereon and Liquidated Damages, if any, to the redemption date plus (iii) the
Applicable Premium.
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments with respect to the
Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company and
Holdings shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company and Holdings shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer.
29
The Asset Sale Offer shall be made to all Holders. The notice, which shall
govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale
Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company or Holdings defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his election to have such
Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes to
be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new
30
Note, and the Trustee, upon written request from the Company shall authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company shall publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent (if other than the Company, Holdings or any of
their Subsidiaries) holds as of 10:00 a.m. Eastern Time on the due date money
deposited by the Company, Holdings in immediately available funds and designated
for and sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay all Liquidated Damages, if any, in the same manner on the
dates and in the amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company and Holdings shall furnish to
all Holders (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if
Holdings were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" that describes
the financial condition and results of operations of Holdings and its
consolidated subsidiaries (showing in reasonable detail, either on the face of
the financial statements or in the footnotes thereto and in Management's
Discussion and Analysis of Financial Condition and Results of Operations, the
financial condition and results of operations of the Company and the Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries), but excluding exhibits, and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if Holdings were required to file such reports. In addition,
whether or not required by the rules and regulations of the SEC, Holdings shall
file a copy of all such information and reports with the SEC for public
availability (unless the SEC will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. The Company and each Guarantor shall at all times comply with TIA ss.
314(a).
(b) For so long as any Notes remain outstanding, the Company and
Holdings shall furnish to all Holders and to securities analysts and prospective
investors upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company and each Guarantor shall deliver to the Trustee,
within 90 days after the end of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Company, Holdings and their
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company, Holdings and any other Guarantor have kept, observed, performed and
fulfilled their obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge the Company, Holdings and the other Guarantors (if any) have kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and are not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company, Holdings and
any other Guarantor are taking or propose to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company, Holdings and any other
Guarantor are taking or propose to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's and Holdings' independent public accountants
32
(who shall be a firm of established national reputation) that in making the
examination necessary for certification of such financial statements, nothing
has come to their attention that would lead them to believe that the Company or
Holdings has violated any provisions of Article Four or Article Five hereof or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation. In the event that such written statement of the Company's
independent public accountants cannot be obtained, the Company shall deliver an
Officer's Certificate certifying that it has used its best efforts to obtain
such statement but was unable to do so.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company, Holdings and any other Guarantor are
taking or propose to take with respect thereto.
SECTION 4.05. TAXES.
The Company and Holdings shall pay, and shall cause each of their
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings and with respect to which appropriate reserves have been
taken in accordance with GAAP or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and Holdings covenant (to the extent that they may
lawfully do so) that they shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
Holdings (to the extent that they may lawfully do so) hereby expressly waive all
benefit or advantage of any such law, and covenant that they shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company and Holdings shall not, and shall not permit any of the
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment distribution on account of the Company's,
Holdings' or any of the Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or Holdings) or to the direct or indirect holders of the
Company's, Holdings' or any Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of Holdings; (ii) purchase, redeem or
otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company or Holdings
any Equity Interests of the Company, Holdings, any Restricted Subsidiary of the
Company or Holdings, or any Affiliate of the Company or Holdings (other than any
such Equity Interests owned by the Company or any Wholly Owned Restricted
Subsidiary of the Company); (iii) make any payment on, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes (other than Notes), except a payment of interest or
principal at (other than interest payments on any Exchange Notes or Qualified
33
Subordinated Indebtedness) Stated Maturity or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "Restricted Payments"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company (in the case of a Restricted Payment by the Company
or any of its Restricted Subsidiaries) or Holdings (in all other cases)
would, at the time of such Restricted Payment and after giving pro forma
effect thereto as if such Restricted Payment had been made at the
beginning of the applicable four-quarter period, have a Fixed Charge
Coverage Ratio of a least 2.0 to 1 pursuant to the Fixed Charge Coverage
Ratio test set forth in the first paragraph of Section 4.09 hereof;
(c) in the case of a Restricted Payment of the Company or a
Restricted Subsidiary of the Company, such Restricted Payment, together
with the aggregate of all other Restricted Payments made by the Company
and its Restricted Subsidiaries after the date of this Indenture
(excluding Restricted Payments permitted by clause (ii) of the second
succeeding paragraph), is less than the sum of (i) 50% of the Consolidated
Net Income of the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing after the date
of this Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus (ii) 100% of the
aggregate net cash proceeds received by the Company from the issue or sale
since the date of this Indenture of Equity Interests of the Company (other
than Disqualified Stock) or of Disqualified Stock or debt securities of
the Company that have been converted into such Equity Interests (other
than Equity Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Company and other than
Disqualified Stock or convertible debt securities that have been converted
into Disqualified Stock), plus (iii) to the extent that any Restricted
Investment that was made after the date of this Indenture is sold for cash
or otherwise liquidated or repaid for cash, the lesser of (A) the cash
return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (B) the initial amount of such Restricted
Investment plus (iv) the amount resulting from redesignations of
Unrestricted Subsidiaries as Restricted Subsidiaries (in each case, such
amount to be valued as provided in the second succeeding paragraph) not to
exceed the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary and which was
treated as a Restricted Payment under this Indenture; and
(d) in the case of a Restricted Payment by Holdings or a Restricted
Subsidiary of Holdings (other than the Company or a Restricted Subsidiary
of the Company), such Restricted Payment, together with the aggregate of
all other Restricted Payments made by Holdings, the Company and their
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clause (ii) of the next succeeding
paragraph), is less than the sum of (i) 50% of the Consolidated Net Income
of Holdings for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date of this
Indenture to the end of Holdings' most recently ended fiscal quarter for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period is
a deficit, less 100% of such deficit), plus (ii) 100% of the aggregate net
cash proceeds received by Holdings from the issue or sale since the date
of this Indenture of Equity Interests of Holdings (other than Disqualified
Stock) or of Disqualified Stock or debt securities of Holdings that have
been converted into such Equity Interests (other than Equity Interests (or
Disqualified
34
Stock or convertible debt securities) sold to a Subsidiary of Holdings and
other than Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of
(A) the cash return of capital with respect to such Restricted Investment
(less the cost of disposition, if any) and (B) the initial amount of such
Restricted Investment plus (iv) the amount resulting from redesignations
of Unrestricted Subsidiaries as Restricted Subsidiaries (in each case,
such amount to be valued as provided in the second succeeding paragraph)
not to exceed the amount of Investments previously made by Holdings in
such Unrestricted Subsidiary and which was treated as a Restricted Payment
under this Indenture.
The foregoing provisions will not prohibit: (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests the Company in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Restricted Subsidiary of the Company) of other Equity Interests
of the Company (other than any Disqualified Stock); provided that the amount of
any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (c) (ii) of paragraph (c) above; (iii) the redemption, repurchase,
retirement, defeasance or other acquisition of any subordinated Indebtedness or
Equity Interests of Holdings in exchange for, or out of the net cash proceeds
of, the substantially concurrent sale (other than to the Company or a Restricted
Subsidiary of Holdings) of other Equity Interests of Holdings (other than any
Disqualified Stock); provided that the amount of any such net cash proceeds that
are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (d)(ii) of paragraph (d) above;
(iv) the defeasance, redemption, repurchase or other acquisition of subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness; (v) the making of any Restricted Payment by Holdings
utilizing the proceeds of a Restricted Payment made by the Company to Holdings
in accordance with this Indenture; (vi) the payment of any dividend by a
Restricted Subsidiary of the Company or Holdings (other than the Company) to the
holders of its common Equity Interests on a pro rata basis; (vii) so long as no
Default or Event of Default shall have occurred and is continuing, the
repurchase, redemption or other retirement for value of any Equity Interests of
the Company, Holdings or a Restricted Subsidiary, or dividends or other
distributions by the Company to Holdings the proceeds of which are utilized by
Holdings to repurchase, redeem or otherwise acquire or retire for value any
Equity Interests of Holdings, in each case, held by any member of the
management, employees or consultants of the Company, a Restricted Subsidiary or
Holdings pursuant to any management, employee or consultant equity subscription
agreement or stock option agreement; provided that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed the sum of (x) $500,000 in any twelve-month period and (y) the aggregate
cash proceeds received by the Company or Holdings from any reissuance of Equity
Interests by Holdings or the Company to members of management of the Company or
Holdings (provided that the cash proceeds referred to in this clause (y) shall
be excluded from clause (c) (ii) of paragraph (c) above); (viii) dividends or
other payments to Holdings sufficient to enable Holdings to pay (x) accounting,
legal, corporate reporting and administrative expenses of Holdings incurred in
the ordinary course of business, (y) required fees and expenses, and any
adjustments to the purchase price under the Stock Purchase Agreement, in each
case in connection with the Recapitalization, and (z) the registration fees and
expenses under applicable laws and regulations of its debt or equity securities;
and (ix) payments to Holdings pursuant to the Tax Sharing Agreement. In
addition, the Company may make a distribution to Holdings to enable Holdings to
consummate the Recapitalization.
35
The Board of Directors of the Company or Holdings, as the case may
be, may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if
such designation would not cause a Default. For purposes of making such
determination, all outstanding Investments by the Company, Holdings and the
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
so designated will be deemed to be Restricted Payments at the time of such
designation and will reduce the amount available for Restricted Payments under
the first paragraph of this covenant. All such outstanding Investments will be
deemed to constitute Investments in an amount equal to the greater (x) the net
book value of such Investments at the time of such designation and (y) the fair
market value of such Investments at the time of such designation. Such
designation will only be permitted if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a Board Resolution delivered to the Trustee) on
the date of the Restricted Payment of the asset(s) or securities proposed to be
transferred or issued by the Company, Holdings or such Subsidiary, as the case
may be, pursuant to the Restricted Payment. The fair market value of any
non-cash Restricted Payment shall be determined by the Board of Directors of the
Company or Holdings, as the case may be, whose resolution with respect thereto
shall be delivered to the Trustee, such determination to be based upon an
opinion or appraisal issued by an accounting, appraisal or investment banking
firm of national standing if such fair market value exceeds $5.0 million.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section were computed, together with a copy of any
fairness opinion or appraisal required by this Indenture, which calculations may
be based upon Holdings' latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES.
The Company and Holdings shall not, and shall not permit any
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company, Holdings or any of the Restricted Subsidiaries (1)
on its Capital Stock or (2) with respect to any other interest or participation
in, or measured by, its profits, or (b) pay any Indebtedness owed to the
Company, Holdings or any of the Restricted Subsidiaries, (ii) make loans or
advances to the Company, Holdings or any of the Restricted Subsidiaries or (iii)
transfer any of its properties or assets to the Company, Holdings or any of the
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) applicable law, (b) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company, Holdings or
any of the Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, provided that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred, (c) by reason of customary non-assignment
provisions in leases, licenses, encumbrances, contracts or similar assets
entered into or acquired in the ordinary course of business and consistent with
past practices, (d) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature described in
clause (iii) above on the property so acquired, (e) existing by virtue of any
transfer of, agreement to transfer, option or right with respect to, or Lien on,
any property or assets of the Company,
36
Holdings or any Restricted Subsidiary not otherwise prohibited by this
Indenture, (f) with respect to a Restricted Subsidiary and imposed pursuant to
an agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Restricted Subsidiary, (g) Indebtedness of the Company and its Restricted
Subsidiaries containing restrictions on dividends, distributions and other
payments to Holdings and its Restricted Subsidiaries (other than the Company and
its Restricted Subsidiaries), (h) the New Credit Facility, provided that such
restrictions are no more restrictive than those contained in the New Credit
Facility as in effect on the Issue Date or such Permitted Refinancing
Indebtedness is no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company and Holdings shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), shall not issue any Disqualified Stock
and shall not permit any of their respective Subsidiaries to issue any shares of
preferred stock; provided, however, that (i) the Company may incur Indebtedness
(including Acquired Debt) or issue shares of Disqualified Stock if the Fixed
Charge Coverage Ratio of the Company for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least 1.75 to 1, if such
incurrence or issuance is on or prior to December 15, 1999 or 2.0 to 1, if such
incurrence or issuance is after December 15, 1999, in each case, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period and (ii) Holdings may incur Indebtedness (including Acquired
Debt) or issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio
of Holdings for Holdings' most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the date
on which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 1.75 to 1, if such incurrence or issuance is on
or prior to December 15, 1999, or 2.0 to 1, if such incurrence or issuance is
after December 15, 1999, in each case, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period.
The provisions for the first paragraph of this Section 4.09 will not
apply to the incurrence of any of the following (collectively, "Permitted
Debt"), each of which shall be given independent effect:
(i) the incurrence by the Company, Holdings and their respective
Subsidiaries of Indebtedness (including letters of credit), or guarantees
of such Indebtedness, pursuant to the term loan portion of the New Credit
Facility; provided that, after giving pro forma effect to any such
incurrence and the application of the proceeds therefrom, the aggregate
principal amount of all Indebtedness of the Company, Holdings and their
Subsidiaries outstanding under the term loan portion of the New Credit
Facility does not exceed $100.0 million less the aggregate amount of all
Net Proceeds of Asset Sales applied to permanently repay any such
Indebtedness pursuant to Section 4.10 hereof;
(ii) the incurrence by the Company, Holdings and their respective
Subsidiaries of Indebtedness (including letters of credit), or guarantees
of such Indebtedness, pursuant to the revolving loan portion
37
of the New Credit Facility (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company,
Holdings and their Subsidiaries thereunder); provided that, after giving
pro forma effect to any such incurrence and the application of the
proceeds therefrom, the aggregate principal amount of all Indebtedness
(including letters of credit) of the Company, Holdings and their
Subsidiaries outstanding under the revolving loan portion of the New
Credit Facility does not exceed the greater of (x) $75.0 million less the
aggregate amount of all Net Proceeds of Asset Sales applied to permanently
repay any such Indebtedness pursuant to Section 4.10 hereof; or (y) the
amount of the Borrowing Base as of any date of incurrence;
(iii) the incurrence by the Company of Indebtedness represented by
the Notes (other than any Additional Notes), the incurrence by Holdings of
the Holdings Guarantee or the incurrence by any Restricted Subsidiary of
Subsidiary Guarantees;
(iv) the incurrence by the Company, Holdings or any of their
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company, Holdings or such Subsidiary, in an aggregate
principal amount not to exceed $5.0 million at any time outstanding;
(v) the incurrence by any corporation that becomes a Subsidiary of
the Company after the Issue Date of Acquired Debt, which Indebtedness is
existing at the time such corporation becomes a Subsidiary; provided,
however, that (A) either (x) the principal amount (or accreted value, as
applicable) of such Acquired Debt, together with any other outstanding
Indebtedness incurred pursuant to this clause (iv), does not exceed $5.0
million since the Issue Date or (y) immediately after giving effect to
such corporation becoming a Subsidiary, Holdings could incur at least
$1.00 of additional Indebtedness (other than Permitted Debt) in accordance
with this Indenture (B) such Indebtedness is without recourse to the
Company, Holdings or to any of their respective Subsidiaries or to any of
their respective properties or assets other than Person becoming a
Subsidiary or its properties and assets and (C) such Indebtedness was not
incurred as a result of or in connection with or in contemplation of such
entity becoming a Subsidiary;
(vi) the incurrence by the Company, Holdings or any of their
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace,
defease or refund, Indebtedness that was permitted by this Indenture to be
incurred;
(vii) the incurrence of intercompany Indebtedness between or among
the Company, Holdings and any of their respective Wholly Owned Restricted
Subsidiaries; provided, however, that (i) if the Company or Holdings is
the obligor on such Indebtedness, such Indebtedness is expressly
subordinate to the prior payment in full in cash of all Obligations with
respect to the Notes and (ii) (A) any subsequent issuance or transfer of
Equity Interests that results in any such Indebtedness being held by a
Person other than the Company, Holdings or a Wholly Owned Restricted
Subsidiary and (B) any sale or other transfer of any such Indebtedness to
a Person that is not either the Company, Holdings or a Wholly Owned
Restricted Subsidiary shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company, Holdings or such
Subsidiary, as the case may be;
(viii)Indebtedness of an Unrestricted Subsidiary owed to and held by
the Company, Holdings or a Restricted Subsidiary, provided that the
Company, Holdings or such Restricted Subsidiary is permitted
38
to make an investment in such Unrestricted Subsidiary under this Indenture
at the time such Indebtedness is incurred in an amount equal to the
principal amount of such Indebtedness;
(ix) the incurrence by the Company or Holdings of Hedging Obligations
that are incurred for the purpose of fixing or hedging currency risk or
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding;
(x) the incurrence by Unrestricted Subsidiaries of Non-Recourse Debt,
provided, however, that if any such Indebtedness ceases to be Non-Recourse
Debt of an Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted Subsidiary;
(xi) Indebtedness incurred in respect of performance, surety and
similar bonds provided by the Company, Holdings and the Restricted
Subsidiaries in the ordinary course of business, and refinancings thereof;
(xii) Indebtedness for letters of credit relating to workers'
compensation claims and self-insurance or similar requirements in the
ordinary course of business;
(xiii) Indebtedness arising from guarantees of Indebtedness of the
Company, Holdings or any Subsidiary or other agreements of the Company,
Holdings or a Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or Subsidiary,
other than guarantees of Indebtedness incurred by any person acquiring all
or any portion of such business, assets or Subsidiary for the purpose of
financing such acquisition, provided that the maximum aggregate liability
in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company, Holdings and their Subsidiaries
in connection with such disposition;
(xiv) the issuance by Holdings, on the Issue Date, of shares of
Holdings Preferred Stock, with an aggregate liquidation value of up to
$17.6 million and the issuance of additional shares of Holdings Preferred
Stock as dividends on outstanding shares of Holdings Preferred Stock
subsequent to the Issue Date in accordance with the terms of the Holdings
Preferred Stock;
(xv) the incurrence of Exchange Notes issued (a) in exchange for all,
but not less than all, of the outstanding Holdings Preferred Stock in
accordance with the terms of the Holdings Preferred Stock as in effect on
the Issue Date, if immediately prior to giving effect to the incurrence of
such Exchange Notes, the Fixed Charge Coverage Ratio of Holdings would
have been at lease 2.0 to 1 pursuant to the Fixed Charge Ratio test set
forth in clause (ii) of the proviso of the first paragraph of this
Section; provided that, in calculating such Fixed Charge Coverage Ratio of
Holdings, no effect shall be given to clause (ii) of the definition of
"Consolidated Net Income" and (b) as interest on Exchange Notes originally
issued in compliance with this Indenture;
(xvi) the incurrence by Holdings of Qualified Subordinated
Indebtedness in an aggregate principal amount not to exceed $5.0 million
at any time outstanding; and
(xvii) the incurrence by the Company, Holdings or any of their
Subsidiaries of additional Indebtedness (in addition to Indebtedness
permitted by any other clause of this paragraph) in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding not to
exceed $20.0 million.
39
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xvii) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify such item of Indebtedness in any
manner that complies with this covenant and such item of Indebtedness will be
treated as having been incurred pursuant to only one of such clauses or pursuant
to the first paragraph hereof. Accrual of interest and the accretion of accreted
value will not be deemed to be an incurrence of Indebtedness for purposes of
this covenant.
SECTION 4.10. ASSET SALES.
The Company and Holdings shall not, and shall not permit any of their
respective Subsidiaries to consummate an Asset Sale unless (i) the Company,
Holdings or the Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a Board Resolution set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 75% of the consideration therefor
received by the Company, Holdings or such Restricted Subsidiary is in the form
of cash or Cash Equivalents; provided that the amount of (x) any liabilities (as
shown on the Company's, Holdings' or such Restricted Subsidiary's most recent
balance sheet) of the Company, Holdings or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes), the Holdings Guarantee or any Subsidiary Guarantee) that are assumed
by the transferee of any such assets pursuant to a customary novation agreement
that releases the Company, Holdings or such Restricted Subsidiary from further
liability and (y) any notes or other obligations received by the Company,
Holdings or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company, Holdings or such Restricted Subsidiary
into cash (to the extent of the cash received), shall be deemed to be cash for
purposes of this Section.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or Holdings, as the case may be, may apply such Net Proceeds,
at its option, (a) to permanently reduce outstanding Senior Indebtedness (and
correspondingly reduce commitments thereunder) or (b) to acquire a controlling
interest in another business, the making of a capital expenditure or the
acquisition of other long-term assets, in each case, in the same or a similar
line of business as the Company was engaged in on the date of this Indenture.
Pending the final application of any such Net Proceeds, the Company or Holdings,
as the case may be, may temporarily reduce revolving credit Indebtedness or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $5.0
million, the Company and Holdings shall commence an Asset Sale Offer pursuant to
Section 3.09 hereof to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of purchase, in accordance
with the procedures set forth in Section 3.09 hereof. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company or Holdings, as the case may be, may use any
remaining Excess Proceeds for general corporate purposes. If the aggregate
principal amount of Notes surrendered by Holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro
rata basis. Upon completion of such offer to purchase, the amount of Excess
Proceeds shall be reset at zero.
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SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company and Holdings shall not, and shall not permit any
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of their respective properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that are no
less favorable to the Company, Holdings or the relevant Restricted Subsidiary,
as the case may be, than those that would have been obtained in a comparable
transaction by the Company, Holdings or such Restricted Subsidiary, as the case
may be, with an unrelated Person and (ii) the Company or Holdings delivers to
the Trustee (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a Board Resolution approving such Affiliate Transaction and an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
national standing; provided, that (x) any employment agreement entered into by
the Company, Holdings or any of their Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company, Holdings or such
Subsidiary, (u) transactions between or among (A) the Company and/or its
Restricted Subsidiaries and (B) Holdings and its Restricted Subsidiaries (other
than the Company and its Restricted Subsidiaries), (v) Restricted Payments
(other than Restricted Investments) that are permitted by Section 4.07 hereof,
(w) investment banking and management fees in an aggregate amount no greater
than $240,000 in the aggregate in any calendar year (plus reimbursement of
expenses) to be paid by the Company and/or Holdings to the Principals or any
Related Party, (x) an aggregate cash fee of $3.25 million payable by the Company
and/or Holdings to the Principals or any Related Party or UBS Capital LLC on or
about the Issue Date and (y) any loans made to the Company under the New Credit
Facility by an Affiliate of the Union Bank of Switzerland and fees and
reimbursement of expenses in respect thereof and (z) discounts and commissions
payable to UBS Securities LLC in the Offering of the Notes, in each case, shall
not be deemed Affiliate Transactions.
SECTION 4.12. LIENS.
The Company and Holdings shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens.
SECTION 4.13. SALE AND LEASEBACK TRANSACTIONS.
The Company and Holdings shall not, and shall not permit any
Restricted Subsidiaries to, enter into any sale and leaseback transaction (other
than, (x) among the Company and Wholly Owned Restricted Subsidiaries of the
Company or (y) among Wholly Owned Restricted Subsidiaries of the Company);
provided that the Company or Holdings may enter into a sale and leaseback
transaction if (i) the Company or Holdings, as the case may be, could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction pursuant to Section 4.09 hereof and (b)
incurred a Lien to secure such Indebtedness pursuant to Section 4.12 hereof,
(ii) the gross cash proceeds of such sale and leaseback transaction are at least
equal to the fair market value (as determined in good faith by the Board of
Directors
41
of the Company or Holdings, as applicable, and set forth in an Officers'
Certificate delivered to the Trustee) of the property that is the subject of
such sale and leaseback transaction and (iii) the transfer of assets in such
sale and leaseback transaction is permitted by, and the Company or Holdings, as
the case may be, applies the proceeds of such transaction in compliance with,
Section 4.10 hereof.
SECTION 4.14. CORPORATE EXISTENCE.
(a) Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if its
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders of the Notes.
(b) Subject to Article 5 hereof, Holdings shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of Holdings or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of Holdings and its Subsidiaries; provided, however, that Holdings shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if its Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of Holdings and its Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall
make an offer (a "Change of Control Offer") to each Holder to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Notes at a purchase price in cash equal to 101% of the aggregate principal
amount thereof plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the date of repurchase (the "Change of Control Payment"). Within 15
days following any Change of Control, the Company shall mail to each Holder a
notice describing the transaction or transactions that constitute the Change of
Control and stating: (1) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Notes tendered will be accepted for payment;
(2) the purchase price and the purchase date, which shall be no earlier than 30
days and no later than 60 days from the date such notice is mailed (the "Change
of Control Payment Date"); (3) that any Note not tendered will continue to
accrue interest; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Payment Date; (6) that Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than the close of business on the second
Business Day preceding the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of
42
the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes
purchased; and (7) that Holders whose Notes are being purchased only in part
will be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered, which unpurchased portion must be equal to $1,000 in
principal amount or an integral multiple thereof. The Company shall comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of Notes in connection with a
Change of Control.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered; provided that each such new Note shall be in a principal
amount of $1,000 or an integral multiple thereof. The Company shall publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(c) Prior to complying with the provisions of this Section 4.15, but
in any event within 75 days following a Change of Control, the Company shall
either repay all outstanding Senior Indebtedness or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Indebtedness
to permit the repurchase of Notes required by this Section 4.15.
(d) The Company shall not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture, applicable to a Change of Control
Offer made by the Company and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.16. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (i) the
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
any Senior Indebtedness and senior in any respect in right of payment to the
Notes and (ii) no Guarantor will incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior in
right of payment to any Senior Indebtedness of such Guarantor, and senior in any
respect in right of payment to such Guarantor's guarantees of the Notes.
SECTION 4.17. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
(a) The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any such Wholly Owned Restricted
Subsidiary to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (a) such transfer, conveyance, sale, lease or
other disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (b) the cash Net Proceeds from such transfer,
43
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10 hereof and, (ii) shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
(b) Holdings (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of Holdings to, transfer, convey, sell, lease or otherwise
dispose of any Capital Stock of any such Wholly Owned Restricted Subsidiary to
any Person (other than Holdings or a Wholly Owned Restricted Subsidiary of
Holdings), unless (a) such transfer, conveyance, sale, lease or other
disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (b) the cash Net Proceeds from such transfer, conveyance, sale,
lease or other disposition are applied in accordance with Section 4.10 hereof,
and (ii) shall not permit any Wholly Owned Restricted Subsidiary of Holdings to
issue of any its Equity Interests (other than, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to Holdings or a Wholly Owned Restricted Subsidiary of Holdings.
SECTION 4.18. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS
The Company and Holdings shall not permit any Restricted Subsidiary
to guarantee the payment of any Indebtedness of the Company, Holdings or any
other Restricted Subsidiary, (in each case, the "Guaranteed Debt"), unless (i)
if such Restricted Subsidiary is not a Guarantor, such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a Subsidiary Guarantee of payment of the Notes by such Restricted
Subsidiary, (ii) if the Notes or the Subsidiary Guarantee (if any) of such
Restricted Subsidiary are subordinated in right of payment to the Guaranteed
Debt, the Subsidiary Guarantee under the supplemental indenture shall be
subordinated to such Restricted Subsidiary's guarantee with respect to the
Guaranteed Debt substantially to the same extent as the Notes or the Subsidiary
Guarantee are subordinated to the Guaranteed Debt under this Indenture, (iii) if
the Guaranteed Debt is by its express terms subordinated in right of payment to
the Notes or the Subsidiary Guarantee (if any) of such Restricted Subsidiary,
any such guarantee of such Restricted Subsidiary with respect to the Guaranteed
Debt shall be subordinated in right of payment to such Restricted Subsidiary's
Subsidiary Guarantee with respect to the Notes substantially to the same extent
as the Guaranteed Debt is subordinated to the Notes or the Subsidiary Guarantee
(if any) of such Restricted Subsidiary, (iv) such Restricted Subsidiary
subordinates rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee to its
obligation under its Subsidiary Guarantee, and (v) such Restricted Subsidiary
shall deliver to the Trustee an opinion of counsel to the effect that (A) such
Subsidiary Guarantee has been duly authorized, executed and delivered, and (B)
such Subsidiary Guarantee constitutes a valid, binding and enforceable
obligation of such Restricted Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity.
SECTION 4.19. PAYMENTS FOR CONSENT.
Neither the Company, nor Holdings nor any of their respective
Subsidiaries shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any of
the terms or provisions of this Indenture or the Notes unless such consideration
is offered to be paid or is paid to all Holders
44
of the Notes that consent, waive or agree to amend in the time frame set forth
in the solicitation documents relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or
not the Company is the surviving corporation) or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions to another corporation, Person or
entity unless (i)(a) the Company is either the surviving corporation or (b) the
entity or the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation organized
or existing under the laws of the United States, any state thereof or the
District of Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and this Indenture, pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such transaction, no
Default or Event of Default exists; (iv) except in the case of a merger of the
Company with or into a Wholly Owned Restricted Subsidiary, the Company or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of Section 4.09 hereof; and (v) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, sale assignment, transfer, lease, conveyance or
other disposition and such supplemental indenture complies with this Indenture
and that all conditions precedent provided for in this Indenture relating to
such transaction have been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets that meets the requirements of Section 5.01 hereof.
45
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the Notes (whether or not
prohibited by the subordination provisions of this Indenture);
(ii) default in the payment when due of principal of or premium,
if any, on the Notes (whether or not prohibited by the subordination
provisions of this Indenture);
(iii) failure by the Company or Holdings to comply with the
provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 hereof;
(iv) failure by the Company or Holdings for 60 days after notice
by the Trustee to the Company or by Holders of at least 25% in
aggregate principal amount of the outstanding Notes to the Company
and the Trustee to comply with any of its other agreements in this
Indenture, the Notes or any Guarantee;
(v) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company,
Holdings or any of the Restricted Subsidiaries (or the payment of
which is guaranteed by the Company, Holdings or any of the Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, which default (a) is
caused by a failure to pay principal of or premium, if any, or
interest on the final maturity date of such Indebtedness (a "Payment
Default") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount
of such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or
more;
(vi) failure by the Company, Holdings or any of the Restricted
Subsidiaries to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a
period of 60 days;
(vii) except as permitted by this Indenture or any Guarantee that
is given by a Guarantor, any Guarantee of a Significant Restricted
Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect;
(viii) the Company, Holdings or any of their Significant
Restricted Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary pursuant to or
within the meaning of Bankruptcy Law:
(a) commences a voluntary case,
46
(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,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due; or
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against Holdings, the Company or any of
their respective Significant Restricted Subsidiaries or any group
of such Subsidiaries that, taken as a whole, would constitute such
a Significant Restricted Subsidiary in an involuntary case;
(b) appoints a Custodian of the Company, Holdings or any of
their respective Significant Restricted Subsidiaries or any group
of Subsidiaries that, taken as a whole, would constitute a
Significant Restricted Subsidiary or for all or substantially all
of the property of the Company, Holdings or any of its Significant
Restricted Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Restricted
Subsidiary; or
(c) orders the liquidation of the Company, Holdings or any of
its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.01 hereof) occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes by written notice to the Company (and the Trustee, if given by
Holders) may declare the unpaid principal of, premium, if any, and accrued and
unpaid interest and Liquidated Damages, if any, on all the Notes to be due and
payable; provided, however, that such declaration will not become effective
until the earlier to occur of (i) the acceleration of the maturity of any
Indebtedness under the New Credit Facility or (ii) five Business Days after the
Agent under the New Credit Facility or other designated representative of
holders of Senior Indebtedness shall have received written notice of the
intention of such Holders to accelerate. Upon such declaration the principal,
premium, if any, and interest and Liquidated Damages, if any, on all the Notes
shall be due and payable immediately. Notwithstanding the foregoing, if an Event
of Default specified in clause (viii) or (ix) of Section 6.01 hereof occurs, all
outstanding Notes shall be due and payable immediately without further action or
notice. The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders 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, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
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If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, upon the acceleration of the Notes. If an Event of
Default occurs prior to December 15, 2002 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding the prohibition on redemption of the Notes prior to such date, then,
upon acceleration of the Notes, the premium, as discussed below, shall also
become and be immediately due and payable in an amount, for each of the years
beginning on December 15 of the years set forth below, as set forth below:
Year Percentage
1997...............................................109.8750%
1998...............................................108.8875%
1999...............................................107.9000%
2000...............................................106.9125%
2001...............................................105.9250%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the Notes waive any existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase) (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration).
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with
48
law or this Indenture that the Trustee determines may be unduly prejudicial to
the rights of other Holders or that may involve the Trustee in personal
liability. The Trustee may take any other action which it deems proper which is
not inconsistent with any such direction. Notwithstanding any provision to the
contrary in this Indenture, the Trustee shall not be obligated to take any
action with respect to the provisions of the last paragraph of Section 6.02
hereof unless directed to do so pursuant to this Section 6.05.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes if:
(a) the Holder gives to the Trustee written notice of a continuing
Event of Default or the Trustee receives such notice from the Company;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder or Holders offer and, if requested, provide to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense;
(d) 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
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor for
the whole amount of principal of, premium, if any, and interest and Liquidated
Damages, if any, remaining unpaid on the Notes and interest on overdue principal
and, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts due the Trustee pursuant to Section
7.07 hereof.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due the Trustee pursuant to Section 7.07 hereof) and the Holders allowed
in any judicial proceedings relative to the Company (or any other obligor upon
the Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
Third: without duplication, to Holders for any other Obligations
owing to the Holders under this Indenture or the Notes; and
Fourth: to the Company or to such other party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
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SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture or the TIA and the Trustee need
perform only those duties that are specifically set forth in this
Indenture or the TIA and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii)the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
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(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to the
provisions of this Indenture, including, without limitation, the provisions of
Section 6.05 hereof, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) 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, direction, consent, order, bond, debenture or
other paper or documents, but the Trustee, in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, Holdings or any other Guarantor, personally or by agent or
attorney.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company. A permissive right granted to the Trustee
hereunder shall not be deemed an obligation to act.
(f) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless either (i) a Responsible Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (ii) written notice
of such Default or Event of Default shall have been given to the Trustee by the
Company or any Holder.
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SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the TIA) it must eliminate such conflict within 90 days,
apply to the SEC for permission to continue as trustee or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Notes, or any Guarantee it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to a Responsible Officer of the Trustee, the Trustee shall mail to the
Holders of the Notes a notice of the Default or Event of Default within 90 days
after it occurs. Except in the case of a Default or Event of Default in payment
on any Note pursuant to Section 6.01(i) and (ii) hereof, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to the Holders a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA ss. 313(b). The
Trustee shall also transmit by mail all reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders shall
be mailed to the Company and filed with the SEC and each stock exchange on which
the Notes are listed in accordance with TIA ss. 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder as
provided from time to time in agreements between the Company and the Trustee.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services.
53
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other Person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the resignation and removal of the Trustee and the satisfaction and discharge of
this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the resignation and
removal of the Trustee and the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(viii) or (ix) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
54
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder, fails to comply
with Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to another
corporation, the successor corporation without any further act shall be the
successor Trustee or Agent.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $50.0
million as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive solely from the trust fund described in Section
8.04 hereof, and as more fully set forth in such Section, payments in respect of
the principal of, premium, if any, and interest and Liquidated Damages, if any,
on such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Article 2 and Section 4.02 hereof, (c) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith and (d) this Article 8. Subject to
compliance with this Section 8.02, the Company may exercise its option under
this Section 8.02 notwithstanding the prior exercise of its option under Section
8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 3.09, 4.03, 4.04, 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 5.01 and 11.04
hereof with respect to the outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the
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conditions set forth in Section 8.04 hereof, Sections 6.01(iii) through 6.01(vi)
hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium and Liquidated Damages, if any, and
interest on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(ii) in the case of an election under Section 8.02 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that (A) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(iii) in the case of an election under Section 8.03
hereof, the Company shall have delivered to the Trustee an Opinion of
Counsel in the United States reasonably acceptable to the Trustee
confirming that the Holders of the outstanding Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(iv) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default
or Event of Default resulting from resulting from the borrowing of
funds to be applied to such deposit) or insofar as Sections
6.01(viii) or 6.01(ix) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Company, Holdings or any of their Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an
opinion of counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
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applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(viii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains
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unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 8.02 or 8.03
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
any Guarantee without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's or any Guarantor's
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article 5 hereof;
(d) to provide for the issuance of a Subsidiary Guarantee by a
Subsidiary of the Company or Holdings;
(e) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture on the Issue Date;
(f) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any such Holder; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by resolutions of its and
the Guarantor's Board of Directors authorizing the execution of any such amended
or supplemental Indenture, and upon receipt by the
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Trustee of the documents described in Section 7.02 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture and the Notes
and the Guarantees may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the Notes then outstanding
(including without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest or Liquidated Damages, if any, on the Notes, except a payment default
resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes). In addition, without the consent of at least 75% in principal
amount of the Notes then outstanding (including consents obtained in connection
with a tender offer or exchange offer for such Notes), no waiver or amendment to
this Indenture may make any change in the provisions of Article 10 hereof that
adversely affects the rights of any Holder of Notes.
Upon the request of the Company accompanied by resolutions of its and
the Guarantors' Board of Directors authorizing the execution of any such amended
or supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.02
hereof, the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental Indenture unless such amended or
supplemental Indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company or any Guarantor with any
provision of this Indenture or, the Notes or the Guarantees. However, without
the consent of each Holder affected, an amendment or waiver may not (with
respect to any Notes held by a non-consenting Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
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(ii) reduce the principal of or change the fixed maturity of any
Notes or alter the provisions with respect to the redemption of the
Notes (except as provided above with respect to Sections 3.09, 4.10
and 4.15 hereof);
(iii) reduce the rate of or change the time for payment of
interest and Liquidated Damages on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest and Liquidated Damages,
if any, on the Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of or premium, if any, or
interest and Liquidated Damages, if any, on the Notes;
(vii) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.15 hereof;
(viii) release any Guarantor from any of its obligations under
its Guarantee or this Indenture, except in accordance with the terms
of this Indenture; or
(ix) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the Notes or the
Guarantees shall be set forth in a amended or supplemental Indenture that
complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
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Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
Neither the Company nor any Guarantor may sign an amendment or supplemental
Indenture until its respective Board of Directors approves it. In executing any
amended or supplemental indenture, the Trustee shall be entitled to receive and
(subject to Section 7.01) shall be fully protected in relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder of Notes by accepting a Note
agrees, that all Obligations on the Notes are subordinated in right of payment,
to the extent and in the manner provided in this Article, to the prior payment
in full in cash of all Senior Indebtedness (whether outstanding on the date
hereof or hereafter created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Indebtedness.
SECTION 10.02. CERTAIN DEFINITIONS.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company or Holdings in a
liquidation or dissolution of the Company, as the case may be, or Holdings or in
a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or their respective property, an assignment for the
benefit of creditors or any marshalling of the Company's or Holdings' assets and
liabilities, the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash of all Obligations due in respect of such Senior
Indebtedness (including interest after the commencement of any such proceeding
at the rate specified in the applicable Senior Indebtedness) before Holders of
Notes shall be entitled to receive any payment with respect to the Notes or the
Holdings Guarantee and until all Obligations with respect to Senior Indebtedness
are paid in full in cash (and all commitments or other Obligations under the New
Credit Facility have been terminated), any distribution to which the Holders of
Notes would be entitled shall be made to the holders of Senior Indebtedness
(except that Holders of Notes may receive securities that are subordinated to at
least the same extent as the Notes to Senior Indebtedness and any securities
issued in exchange for Senior Indebtedness and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof); and
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SECTION 10.04. DEFAULT ON DESIGNATED SENIOR INDEBTEDNESS.
The Company and Holdings may not make any payment or distribution to
the Trustee or any Holder of Notes in respect of Obligations with respect to the
Notes and may not acquire from the Trustee or any Holder of Notes any Notes for
cash or property (other than (i) securities that are subordinated to at least
the same extent as the Notes to (a) Senior Indebtedness and (b) any securities
issued in exchange for Senior Indebtedness and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01
hereof) until all principal and other Obligations with respect to the Senior
Indebtedness have been paid in full if:
(i) a default in the payment of any Obligation on Designated Senior
Indebtedness occurs and is continuing beyond any applicable period of
grace in the agreement, indenture or other document governing such
Designated Senior Indebtedness; or
(ii) a default, other than a payment default, on Designated Senior
Indebtedness occurs and is continuing that then permits holders of the
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Person who may give it pursuant to Section 10.12 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment Blockage
Notice shall be effective for purposes of this Section unless and until
(i) at least 360 days shall have elapsed since the effectiveness of the
immediately prior Payment Blockage Notice and (ii) all scheduled payments
of principal, premium, if any, and interest on the Notes that have come
due have been paid in full in cash. No nonpayment default that existed or
was continuing on the date of delivery of any Payment Blockage Notice to
the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice.
The Company and/or Holdings may and shall resume payments on and
distributions in respect of the Notes or the Holdings Guarantee, as applicable,
and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.04(ii) hereof,
the earlier of the date on which such nonpayment default is cured or
waived or 179 days pass after a Payment Blockage Notice is received,
unless the maturity of such Designated Senior Indebtedness has been
accelerated,
if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.05. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify the agent under the New Credit
Facility and the holders of Senior Indebtedness of the acceleration and any such
acceleration shall be subject to Section 6.02 thereof.
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SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Notes receives any
payment of any Obligations with respect to the Notes at a time when the Trustee
or such Holder of Notes, as applicable, has actual knowledge that such payment
is prohibited by Section 10.04 hereof, such payment shall be held by the Trustee
or such Holders of Notes, in trust for the benefit of, and shall be paid
forthwith over and delivered, to the agent under the New Credit Facility with
respect to Obligations thereunder or, if no Obligations or commitments are
outstanding thereunder as provided in Section 10.03 hereof, to the holders of
other Senior Indebtedness or the Representative for such other holders under the
indenture of other agreement (if any) pursuant to which such other Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to the New Credit
Facility and, if no Obligations or commitments with respect thereto are
outstanding as provided in Section 10.03 hereof, all other Senior Indebtedness
remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms and Section 10.03 hereof, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holder of Notes or the Company or Holdings or any other Person money
or assets to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
SECTION 10.07. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company or Holdings that would cause a payment of any
Obligations with respect to the Notes to violate this Article, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article.
SECTION 10.08. SUBROGATION.
After all Senior Indebtedness is paid in full and commitments under
the New Credit Facility have been terminated as provided in Section 10.03 hereof
and until the Notes are paid in full, Holder of Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness to the extent that distributions otherwise payable to the
Holder of Notes have been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior Indebtedness that
otherwise would have been made to Holder of Notes is not, as between the Company
and Holder of Notes, a payment by the Company on the Notes.
SECTION 10.09. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of Notes and
holders of Senior Indebtedness. Nothing in this Indenture shall:
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(1) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holders of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice given the agent
under the New Credit Facility with respect to Obligations thereunder and to any
other designated Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other Indebtedness
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this
Article 10.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article. Only the Company, Holdings,
the agent under the New Credit Facility or (if all Obligations under the New
Credit Facility have been paid in full in cash and all commitments thereunder
terminated as provided in Section 10.03 hereof) the holders of any other
designated Senior Indebtedness may give the notice. Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under or pursuant to
Section 7.07 hereof.
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The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the Representatives are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
SECTION 10.14. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the holders of all Senior Indebtedness.
ARTICLE 11
GUARANTEES
SECTION 11.01. GUARANTEES.
Each Guarantor fully and unconditionally guarantees to each Holder of
a Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal of and interest on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and (b) in case of any extension
of time of payment or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, such Guarantor will be
obligated to pay the same immediately. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenant that its Guarantee will
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by any such entity to the Trustee or
such Holder, the Guarantees, to the extent theretofore
66
discharged, shall be reinstated in full force and effect. Each Guarantor agrees
that it shall not be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until payment in full of
all obligations guaranteed hereby. Each Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of the Guarantees,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of the Guarantees. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantees.
SECTION 11.02. EXECUTION AND DELIVERY OF GUARANTEE.
To evidence its Guarantee set forth in Section 11.01, each Guarantor
hereby agrees that a notation of such Guarantee substantially in the form of
Exhibit C, which is part of this Indenture, shall be endorsed by an officer of
such Guarantor on each Note authenticated and delivered by the Trustee and that
this Indenture shall be executed on behalf of such Guarantor by its President or
one of its Vice Presidents.
Each Guarantor hereby agrees that its Guarantee set forth in Section
11.01 shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Guarantee.
If the Officer whose signature is on this Indenture or on the
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Guarantee is endorsed, the Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee set forth in
this Indenture on behalf of such Guarantor.
SECTION 11.03. SUBORDINATION OF GUARANTEES.
Each Guarantor agrees, and each Holder by accepting a Note and the
Guarantees agrees, that the payment of all Obligations on the Notes pursuant to
the Guarantees is subordinated in right of payment, to the extent and in the
manner provided in Article 10, to the prior payment of all Senior Indebtedness
guaranteed by such Guarantor and the subordination set forth herein is for the
benefit of and enforceable by the holders of Senior Indebtedness. Each Holder by
accepting a Note authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holders and the holders of Senior Indebtedness as
provided in this Section 11.03 and appoints the Trustee as attorney-in-fact for
any and all such purposes.
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provision is, and is intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, such Senior Indebtedness. No right of any holder of Senior Indebtedness to
enforce the subordination
67
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by the Company or Holdings by the failure of either to comply
with this Indenture.
SECTION 11.04. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
(a) Except as set forth in this Section and Articles 4 and 5, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety, or substantially as an entirety, to the Company,
unless immediately after giving effect to such transaction, a Default or Event
of Default exists.
(b) Holdings may not consolidate with or merge with or into (whether
or not Holdings is the surviving Person), another corporation, Person or entity
whether or not affiliated with Holdings unless (i) subject to the provisions of
the following paragraph, the Person formed by or surviving any such
consolidation or merger (if other than Holdings) assumes all the obligations of
Holdings pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes and the Indenture; (ii) immediately
after giving effect to such transaction, no Default or Event of Default exists;
(iii) Holdings, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of
Holdings immediately preceding the transaction; and (iv) Holdings would be
permitted immediately after giving effect to such transaction, to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09 hereof.
(c) Except as set forth in this Section and Articles 4 and 5, nothing
contained in this Indenture or in any of the Notes shall prevent any
consolidation or merger of a Subsidiary Guarantor with or into (whether or not
such Subsidiary Guarantor is the surviving Person) another corporation, Person
or entity, whether or not affiliated with such Subsidiary Guarantor, or
successive consolidations or mergers in which a Subsidiary Guarantor or its
successor or successors shall be a party or parties, or shall prevent any sale
or conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety or any sale or other disposition of all the capital
stock of any Subsidiary Guarantor, to a corporation other than the Company
(whether or not affiliated with the Subsidiary Guarantor) authorized to acquire
and operate the same; provided, however, (i) that each Subsidiary Guarantor
shall covenant and agree that, upon any such consolidation, merger, sale or
conveyance, the Subsidiary Guarantee endorsed on the Notes, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by such Subsidiary Guarantor, shall be expressly
assumed (in the event that the Subsidiary Guarantor is not the surviving
corporation in the merger), by supplemental indenture satisfactory in form and
substance to the Trustee, executed and delivered to the Trustee, by the
corporation formed by such consolidation or into which the Subsidiary Guarantor
shall have been merged, or by the corporation which shall have acquired such
property, (ii) that immediately after giving effect to such transaction, no
Default or Event of Default exists and (iii) that the Trustee shall be entitled
to receive and (subject to Section 7.01) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor corporation, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form and substance to
the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by the Subsidiary Guarantor, such successor corporation shall
succeed to and be substituted for the Subsidiary Guarantor with the same effect
as if it had been named herein as a Subsidiary
68
Guarantor. Such successor corporation thereupon may cause to be signed any or
all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
SECTION 11.05. RELEASES OF SUBSIDIARY GUARANTEES FOLLOWING SALE OF ASSETS.
Concurrently with any Asset Sale (including, if applicable, all of
the capital stock of any Subsidiary Guarantor), any Liens in favor of the
Trustee in the assets sold thereby shall be released; provided that in the event
of an Asset Sale, the Net Proceeds of such sale or other disposition are applied
in accordance with the provisions of Section 4.10 hereof. If the assets sold in
such sale or other disposition include all or substantially all of the assets of
any Subsidiary Guarantor or all of the capital stock of any Subsidiary
Guarantor, then such Subsidiary Guarantor (in the event of a sale or other
disposition of all of the capital stock of such Subsidiary Guarantor) or the
corporation acquiring the property (in the event of a sale or other disposition
of all or substantially all of the assets of a Subsidiary Guarantor) shall be
released and relieved of its obligations under its Subsidiary Guarantee or
Section 11.04 hereof, as the case may be; provided that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are treated in
accordance with the provisions of Section 4.10 hereof. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.10 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any Subsidiary Guarantor from its
obligations under its Subsidiary Guarantee. Any Subsidiary Guarantor not
released from its obligations under its Subsidiary Guarantee shall remain liable
for the full amount of principal of and interest on the Notes and for the other
obligations of any Subsidiary Guarantor under this Indenture as provided in this
Article 11.
SECTION 11.06. LIMITATION ON SUBSIDIARY GUARANTOR LIABILITY.
Each Subsidiary Guarantor, and by its acceptance of Notes, each
Holder, hereby confirms that it is the intention of all such parties that the
Subsidiary Guarantee of such Subsidiary Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Subsidiary Guarantee. To effectuate
the foregoing intention, the Trustee, the Holders and the Subsidiary Guarantors
hereby irrevocably agree that the obligations of such Subsidiary Guarantor under
its Subsidiary Guarantee and this Article 11 shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Subsidiary Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under this Article 11, result in the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer
or conveyance.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 11 shall in such case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its
69
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 11 in place of the Trustee.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.318(c), the imposed duties shall control.
SECTION 12.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or Holdings:
DESA International, Inc.
0000 Xxxxxxxxxx Xxxxx
X.X. Xxx 00000
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx
With a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No.: 617-338-2880
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Trustee:
Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: 000-000-0000
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
70
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
71
(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 or she 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 satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or Holdings, as such, shall have any liability for
any obligations of the Company, Holdings or any Subsidiary under the Notes, this
Indenture, the Guarantees or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company, Holdings or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
SECTION 12.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
72
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
73
SIGNATURES
Dated as of November __, 1997 DESA INTERNATIONAL, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
DESA HOLDINGS CORPORATION
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
Dated as of November __, 1997 MARINE MIDLAND BANK
Trustee
By:______________________________
Name:
Title:
================================================================================
EXHIBIT A
(Face of Note)
97/8% Senior Subordinated Notes due 2007
CUSIP:
No. $130,000,000
DESA INTERNATIONAL, INC.
promises to pay to CEDE & CO or registered assigns, the principal sum
of One Hundred Thirty Million Dollars, or such greater or lesser amount
as may from time to time be endorsed on Schedule A hereto, on December
15, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Dated: November __, 1997
DESA INTERNATIONAL, INC.
By:______________________________
Name:
Title:
DESA HOLDINGS CORPORATION
By:______________________________
Name:
Title:
This is one of the Global
Notes referred to in
within-mentioned Indenture:
MARINE MIDLAND BANK,
as Trustee
By:
================================================================================
A-1
(Back of Note)
97/8% Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuers or their agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]1/
[THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER OF
THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)
(A) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.]2/
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
--------
1. To be included only if the Note is issued in Global form.
2. This legend should be included on the Unregistered Notes and omitted from the
New Notes.
A-2
1. INTEREST. DESA International, Inc., a Delaware corporation (the
"Company") promises to pay interest on the principal amount of this Note at
97/8% per annum from June 15, 1998 until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages
semi-annually on June 15 and December 15 of each year (each an "Interest Payment
Date"), or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Note will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be June 15, 1998. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any (without regard to any applicable grace periods) from time to time on demand
at the same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the June 1 or December 1
next preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such Interest Payment Date, and
may be paid to the registered Holders at the close of business on a special
interest payment date to be fixed by the Trustee for the payment of such
defaulted interest, notice whereof shall be given to the registered Holders not
less than 10 days prior to such special interest payment date, or may be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes may be listed, and upon such notice
as may be required by such exchange, all as more fully provided in the
Indenture. The Notes will be payable as to principal, premium, interest and
Liquidated Damages at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Marine Midland Bank, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company, Holdings or any of their subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of November 26, 1997 (the "Indenture") between the Company, Holdings and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code xx.xx. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. The Notes are general obligations of the Company limited to $205.0
million in aggregate principal amount, plus amounts, if any issued to pay
Liquidated Damages on outstanding Notes as set forth in Paragraph 2 hereof.
A-3
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to December 15,
2002. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on December 15 of the years
indicated below:
Year Percentage
2002..............................................104.9375%
2003..............................................103.2917%
2004 .............................................101.6458%
2005 and thereafter...............................100.0000%
(b) Notwithstanding the provisions of Paragraph (a) of this Paragraph
5, at any time prior to December 15, 2000, the Company may (but shall not have
the obligation to) redeem up to 35% of the original aggregate principal amount
of Notes (including Additional Notes) at a redemption price of 109.875% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon to the redemption date, with the net cash proceeds of one or more Public
Equity Offerings; provided that at least 65% in aggregate principal amount of
Notes (including any Additional Notes) remain outstanding immediately after the
occurrence of such redemption; and provided, further that such redemption shall
occur within 60 days of the date of the closing of such Public Equity Offering.
(c) Upon the occurrence of a Change of Control prior December 15,
2002, the Notes will be redeemable, in whole or in part, at the option of the
Company, upon not less than 30 nor more than 60 days prior notice to each Holder
to be redeemed, at a redemption price equal to the sum of (i) the then
outstanding principal amount thereof plus (ii) accrued and unpaid interest
thereon and Liquidated Damages, if any, to the redemption date plus (iii) the
Applicable Premium.
6. MANDATORY REDEMPTION. Except as set forth in Paragraph 7 below, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to
make an offer (a "Change of Control Offer") to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the principal amount thereof plus, in each case, accrued
and unpaid interest and Liquidated Damages, if any, to the date of purchase (in
either case, the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder setting forth
the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company, Holdings or any of their respective Restricted
Subsidiaries consummates any Asset Sale, within five days of each date on which
the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company and
Holdings shall commence an offer to all Holders of Notes (as "Asset Sale Offer")
pursuant to Section 3.09 of the Indenture to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds at an offer
price in cash in an amount equal to 100% of the principal
A-4
amount thereof plus accrued and unpaid interest and Liquidated Damages, if any,
to the date fixed for the closing of such offer, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company, or Holding, as the case may be, may use such deficiency
for general corporate purposes. If the aggregate principal amount of Notes and
Additional Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata
basis. Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
8. NOTICE OF REDEMPTION. Subject to the provisions of Section 3.09 of the
Indenture, a notice of redemption will be mailed at least 30 days but not more
than 60 days before the Redemption Date to each Holder whose Notes are to be
redeemed at its registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
9. SUBORDINATION. The Notes are subordinated in right of payment, to the
extent and in the manner provided in the Indenture, to the prior payments in
full in cash of all Senior Indebtedness (as defined in the Indenture), which
includes (i) all "Obligations" in respect of and as defined in the New Credit
Facility (including, without limitation, interest that accrues after the filing
of a petition initiating any action or proceeding under the Bankruptcy Law or
any other bankruptcy, insolvency or similar law or statute protecting creditors
in effect in any jurisdiction, whether or not such interest accrues after the
filing of such petition for purposes of the Bankruptcy Law or such other law or
statute or is an allowed claim in any such action or proceeding), whether
existing on the date of the Indenture of thereafter incurred, and (ii) any other
Indebtedness that is permitted to be incurred by the Company or any Guarantor
pursuant to the Indenture unless the instrument under which such Indebtedness is
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Notes. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness shall not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company or any Guarantor, (x)
any Indebtedness of the Company or any Guarantor to any of their respective
Subsidiaries or other Affiliates except to the extent any such Indebtedness is
pledged as security under the New Credit Facility, (y) any trade payables or (z)
any Indebtedness that is incurred in violation of the Indenture.
10. SUBORDINATION OF GUARANTEES. Each Guarantor agrees, and each Holder by
accepting a Note and the Guarantees agrees, that all Obligations on the Notes
pursuant to the Guarantees is subordinated in right of payment, to the extent
and in the manner provided in the Section 11.03, to the prior payment of all
Senior Indebtedness guaranteed by such Guarantor and the subordination set forth
herein is for the benefit of an enforceable by the holders of Senior
Indebtedness. Each Holder by accepting a Note authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders and the holders
of Senior Indebtedness as provided in Section 11.03 of the Indenture and
appoints the Trustee as attorney-in-fact for any and all such purposes.
11. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the
A-5
unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
12. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
13. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. In addition, any
amendment to the provisions of Article 10 of the Indenture (which relate to
subordination) will require the consent of the Holders of at least 75% in the
aggregate principal amount of the Notes then outstanding, if such amendment
would adversely affect the rights of Holders of Notes. Without the consent of
any Holder of a Note, the Indenture or the Notes may be amended or supplemented
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Notes in addition to or in place of certificated Notes, to provide for the
assumption of the Company's or any Guarantor's obligations to Holders of the
Notes in case of a merger or consolidation, to provide for the issuance of
Additional Notes in accordance with the limitations set forth in the Indenture
on the Issue Date), to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
14. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on, or Liquidated Damages with respect
to, the Notes (whether or not prohibited by the subordination provisions of the
Indenture); (ii) default in the payment when due of principal of or premium, if
any, on the Notes (whether or not prohibited by the subordination provisions of
the Indenture); (iii) failure by the Company or Holdings to comply with the
provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv)
failure by the Company or Holdings for 60 days after notice from the Trustee or
Holders of at least 25% in aggregate principal amount of the outstanding Notes
to comply with any of its other agreements in the Indenture, the Notes or any
Guarantee; (v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company, Holdings or any of the
Restricted Subsidiaries (or the payment of which is guaranteed by the Company,
Holdings or any of the Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (a) is caused by a failure to pay principal of or premium, if any, or
interest on the final maturity date of such Indebtedness (a "Payment Default")
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more; (vi) failure by the Company, Holdings or any of the
Restricted Subsidiaries to pay final judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a period of 60
days; (vii) except as permitted by the Indenture or any Guarantee that is given
by a Guarantor, any Guarantee of a Significant Restricted Subsidiary shall be
held in any judicial proceeding to be unenforceable or invalid or shall cease
for any reason to be in full force and effect; and (viii) certain events of
bankruptcy or insolvency with respect to the Company, Holdings or any of their
Significant Restricted Subsidiaries or a group of Subsidiaries that, taken as a
whole, would constitute a Significant Restricted Subsidiary. If any Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable; provided, however that such declaration will not become
effective until the earlier to occur of (i) the acceleration of the
A-6
maturity of any Indebtedness under the New Credit Facility or (ii) five Business
Days after the Agent under the New Credit Facility or other designated
representative of holders of Senior Indebtedness shall have received written
notice of the intention of such Holders to accelerate. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
15. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or their Affiliates, and may otherwise deal with the
Company, Holdings or their Affiliates, as if it were not the Trustee.
16. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or Holdings, as
such, shall have any liability for any obligations of the Company, Holdings or
any Subsidiary under the Notes, the Indenture, the Guarantees or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
17. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
18. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
19. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of November 26, 1997, between the
Company, Holdings and the other parties thereto (the "Registration Rights
Agreement").
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
DESA International, Inc.
A-7
0000 Xxxxxxxxxx Xxxxx
P.O. Box 90004
Bowling Green, Kentucky 42102
Attention: Vice President - Finance
A-8
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date:______________________
Your Signature:_____________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee:________________
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $___________
Date:____________________ Your Signature:_____________________
(Sign exactly as your name appears
on the Note)
Tax Identification No.:_____________
Signature Guarantee:________________
A-10
Schedule A
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES3/
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Principal Amount of this Signature of
Amount of decrease in Amount of increase in Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------------- ---------------------- --------------------- ------------------------ ---------------------
--------
3. This should be included on if the Note is issued in Global form.
A-11
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF NOTES
Re: 97/8% Senior Subordinated Notes due 2007 of DESA International, Inc.
This Certificate relates to $_____ principal amount of Notes held in
* ________ book-entry or *_______ certificated form by ________________ (the
"Transferor").
The Transferor*:
has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depositary a Note or
Notes in certificated, registered form of authorized denominations in an
aggregate principal amount equal to its beneficial interest in such Global Note
(or the portion thereof indicated above); or
|_| has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
|_| Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A) of
the Indenture).
|_| Such Note is being transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A or to an "Accredited Investor," (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) in
accordance with Regulation D under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an exemption from registration in accordance with Rule
904 under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture.)
---------------
*Check applicable box.
B-1
|_| Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or Section
2.06(d)(i)(B) of the Indenture).
|_| Such Note is being transferred in reliance on and in compliance with an
exemption from the registration requirements of the Securities Act, other than
Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of Counsel to
the effect that such transfer does not require registration under the Securities
Act accompanies this Certificate (in satisfaction of Section 2.06(a)(ii)(C) or
Section 2.06(d)(i)(C) of the Indenture).
_____________________________________
[INSERT NAME OF TRANSFEROR]
By:__________________________________
Date:__________________________
---------------
*Check applicable box.
B-2
EXHIBIT C
GUARANTEE
The Guarantor hereby, jointly and severally with any other Guarantor,
unconditionally guarantees to each Holder of Notes authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns, irrespective
of the validity and enforceability of the Indenture, the Notes or the
Obligations of the Company to the Holders or the Trustee under the Notes or
under the Indenture, that: (a) the principal of, and premium and Liquidated
Damages, if any, and interest on the Notes shall be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise, and interest
on overdue principal of interest and Liquidated Damages on the Note, if any, if
lawful and all other Obligations of the Company to the Holders or the Trustee
under the Indenture or under the Notes shall be promptly paid in full or
performed, all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed,
for whatever reason, the Guarantor will be jointly and severally obligated to
pay the same immediately.
The Obligations of the Guarantor to the Holders of Notes and to the
Trustee pursuant to this Guarantee and the Indenture are expressly set forth in
Article 11 of the Indenture, and reference is hereby made to such Indenture for
the precise terms of this Guarantee. The terms of Article 11 of the Indenture
are incorporated herein by reference.
No past, present or future director, officer, employee, incorporator or
stockholder of the Guarantor, as such, shall have any liability under this
Guarantee or for any claim based on, in respect of, or by reason of, such
obligations or their creation.
The Guarantor agrees, and each Holder by accepting a Note and this
Guarantee agrees, that the payment of all Obligations on the Notes pursuant to
this Guarantee is subordinated in right of payment, to the extent and in the
manner provided in the Articles 10 and 11, to the prior payment of all Senior
Indebtedness that is guaranteed by such Guarantor and the subordination set
forth herein is for the benefit of and enforceable by the holders of Senior
Indebtedness. Each Holder by accepting a Note authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders and the holders
of Senior Indebtedness as provided in the Indenture and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Upon any distribution to creditors of the Guarantor in a liquidation or
dissolution of the Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Guarantor or its property, an
assignment for the benefit of creditors or any marshalling of the Guarantor's
assets and liabilities, the holders of Senior Indebtedness that is guaranteed by
the Guarantor will be entitled to receive payment in full of all Obligations due
in respect of such Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Indebtedness) as provided in the Indenture before the Holders of Notes
will be entitled to receive any payment with respect to this Guarantee, and
until all Obligations with respect to all Senior Indebtedness guaranteed by the
Guarantor are paid in full as provided in the Indenture, any distribution to
which the Holders of Notes would be entitled shall be made to the holders of
Senior Indebtedness guaranteed by the Guarantor (except that Holders of Notes
may receive securities that are subordinated at least to the same extent as this
Guarantee of the Notes to Senior Indebtedness guaranteed by the Guarantor and
any securities issued in exchange for Senior Indebtedness guaranteed by the
Guarantor).
C-1
In addition, the Guarantor may not make any payment or distribution to the
Trustee or any Holder of Notes in respect of Obligations with respect to the
Notes and may not acquire from the Trustee or any Holder of Notes any Notes for
cash or property (other than (i) securities that are subordinated to at least
the same extent as the Notes to (a) Senior Indebtedness and (b) any securities
issued in exchange for Senior Indebtedness and (ii) payments and other
distributions made from any defeasance trust created pursuant to Section 8.01 of
the Indenture) until all principal and other Obligations with respect to the
Senior Indebtedness have been paid in full if: (i) a default in the payment of
any Obligations on Designated Senior Indebtedness occurs and is continuing
beyond any applicable period of grace in the agreement, indenture or other
document governing such Designated Senior Indebtedness; or (ii) a default, other
than a payment default, on Designated Senior Indebtedness occurs and is
continuing that then permits holders of the Designated Senior Indebtedness to
accelerate its maturity and the Trustee receives a notice of the default (a
"Payment Blockage Notice") from a Person who may give it pursuant to Section
10.12 of the Indenture. If the Trustee receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for purposes of
the Indenture unless and until (i) at least 360 days shall have elapsed since
the effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal, premium, if any, and interest on the Notes that
have come due have been paid in full in cash. No nonpayment default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice. The Guarantor may and shall resume payments on and distributions in
respect of this Guarantee upon the earlier of: (1) the date upon which the
default is cured or waived, or (2) in the case of a default referred to in
Section 10.04(ii) of the Indenture, the earlier of the date on which such
nonpayment default is cured or waived or 179 days pass after a Payment Blockage
Notice is received, unless the maturity of such Designated Senior Indebtedness
has been accelerated, if the Indenture otherwise permits the payment,
distribution or acquisition at the time of such payment or acquisition.
Each Holder by accepting a Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, such Senior Indebtedness. No right of any holder of Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or any Guarantor by the
failure of any of them to comply with the Indenture.
This is a continuing Guarantee and shall remain in full force and effect
and shall be binding upon the Guarantor and its respective successors and
assigns to the extent set forth in the Indenture until full and final payment of
all of the Company's Obligations under the Notes and the Indenture and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders of Notes and, in the event of any transfer or assignment of rights by
any Holder of Notes or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This a guarantee of
payment and not a guarantee of collection.
In certain circumstances more fully described in the Indenture, the
Guarantor may be released from its liability under this Guarantee, and any such
release will be effective whether or not noted hereon.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Note upon which this Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
C-2
For purposes hereof, the Guarantor's liability will be that amount from
time to time equal to the aggregate liability of the Guarantor hereunder, but
shall be limited to the lesser of (i) the aggregate amount of the Obligations of
the Company under the Notes and the Indenture and (ii) the amount, if any, which
would not have (A) rendered the Guarantor "insolvent" (as such term is defined
in the Bankruptcy Law and in the Debtor and Creditor Law of the State of New
York) or (B) left it with unreasonably small capital at the time this Guarantee
of the Notes was entered into, after giving effect to the incurrence of existing
Indebtedness immediately prior to such time; provided that, it shall be a
presumption in any lawsuit or other proceeding in which the Guarantor is a party
that the amount guaranteed pursuant to this Guarantee is the amount set forth in
clause (i) above unless any creditor, or representative of creditors of the
Guarantor, or debtor in possession or trustee in bankruptcy of the Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii). In making any determination
as to the solvency or sufficiency of capital of the Guarantor in accordance with
the previous sentence, the right of the Guarantor to contribution from other
Guarantors, if any, and any other rights the Guarantor may have, contractual or
otherwise, shall be taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture, dated November 26, 1997, among DESA International, Inc., DESA
Holdings Corporation and Marine Midland Bank, unless otherwise indicated.
[GUARANTOR]
By:_____________________
Name:
Title:
C-3
================================================================================
DESA INTERNATIONAL, INC.
and
DESA HOLDINGS CORPORATION
97/8% SENIOR SUBORDINATED NOTES DUE 2007
-----------------
INDENTURE
Dated as of November 26, 1997
-----------------
-----------------
MARINE MIDLAND BANK
-----------------
Trustee
================================================================================
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)........................................................... 7.10
(a)(2).......................................................... 7.10
(a)(3) ......................................................... N.A.
(a)(4).......................................................... N.A.
(a)(5).......................................................... 7.10
(b) ............................................................ 7.10
(c) ............................................................ N.A.
311 (a) ............................................................. 7.11
(b) ............................................................ 7.11
(c) ............................................................ N.A.
312 (a).............................................................. 2.05
(b)............................................................. 12.03
(c) ............................................................ 12.03
313 (a) ............................................................. 7.06
(b)(1) ......................................................... 10.03
(b)(2) ......................................................... 7.06
(c) ............................................................7.06;12.02
(d)............................................................. 7.06
314 (a) .............................................................4.03;12.05
(e) ........................................................... 12.05
316 (c).............................................................. 2.13
318 (a).............................................................. N.A.
(b)............................................................. N.A.
(c)............................................................. 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions....................................................... 1
Section 1.02. Other Definitions................................................. 17
Section 1.03. Incorporation by Reference of Trust Indenture Act................. 17
Section 1.04. Rules of Construction............................................. 18
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating................................................... 18
Section 2.02. Execution and Authentication...................................... 19
Section 2.03. Registrar and Paying Agent........................................ 19
Section 2.04. Paying Agent to Hold Money in Trust............................... 20
Section 2.05. Holder Lists...................................................... 20
Section 2.06. Transfer and Exchange............................................. 20
Section 2.07. Replacement Notes................................................. 25
Section 2.08. Outstanding Notes................................................. 26
Section 2.09. Treasury Notes.................................................... 26
Section 2.10. Temporary Notes................................................... 26
Section 2.11. Cancellation...................................................... 26
Section 2.12. Defaulted Interest................................................ 27
Section 2.13. Record Date....................................................... 27
Section 2.14. CUSIP Number...................................................... 27
Section 2.15. Computation of Interest........................................... 27
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee................................................ 27
Section 3.02. Selection of Notes to Be Redeemed................................. 28
Section 3.03. Notice of Redemption.............................................. 28
Section 3.04. Effect of Notice of Redemption.................................... 29
Section 3.05. Deposit of Redemption Price....................................... 29
Section 3.06. Notes Redeemed in Part............................................ 29
Section 3.07. Optional Redemption............................................... 29
Section 3.08. Mandatory Redemption.............................................. 30
Section 3.09. Offer to Purchase by Application of Excess Proceeds............... 30
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.................................................. 32
Section 4.02. Maintenance of Office or Agency................................... 32
Section 4.03. Reports........................................................... 33
Section 4.04. Compliance Certificate............................................ 33
Section 4.05. Taxes............................................................. 34
Section 4.06. Stay, Extension and Usury Laws.................................... 34
Section 4.07. Restricted Payments............................................... 35
i
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries........................................... 37
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock............................................................. 38
Section 4.10. Asset Sales....................................................... 41
Section 4.11. Transactions with Affiliates...................................... 42
Section 4.12. Liens............................................................. 43
Section 4.13. Sale and Leaseback Transactions................................... 43
Section 4.14. Corporate Existence............................................... 43
Section 4.15. Offer to Repurchase Upon Change of Control........................ 44
Section 4.16. No Senior Subordinated Debt....................................... 45
Section 4.17. Limitation on Issuances and Sales of Capital Stock of
Wholly Owned Subsidiaries......................................... 45
Section 4.18. Limitations on Issuances of Guarantees of Indebtedness............ 46
Section 4.19. Payments for Consent.............................................. 46
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.......................... 46
Section 5.02. Successor Corporation Substituted................................. 47
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................................................. 47
Section 6.02. Acceleration...................................................... 49
Section 6.03. Other Remedies.................................................... 50
Section 6.04. Waiver of Past Defaults........................................... 50
Section 6.05. Control by Majority............................................... 50
Section 6.06. Limitation on Suits............................................... 51
Section 6.07. Rights of Holders of Notes to Receive Payment..................... 51
Section 6.08. Collection Suit by Trustee........................................ 51
Section 6.09. Trustee May File Proofs of Claim.................................. 52
Section 6.10. Priorities........................................................ 52
Section 6.11. Undertaking for Costs............................................. 53
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................................................. 53
Section 7.02. Rights of Trustee................................................. 54
Section 7.03. Individual Rights of Trustee...................................... 55
Section 7.04. Trustee's Disclaimer.............................................. 55
Section 7.05. Notice of Defaults................................................ 55
Section 7.06. Reports by Trustee to Holders of the Notes........................ 55
Section 7.07. Compensation and Indemnity........................................ 56
Section 7.08. Replacement of Trustee............................................ 56
Section 7.09. Successor Trustee by Merger, etc.................................. 57
Section 7.10. Eligibility; Disqualification..................................... 57
Section 7.11. Preferential Collection of Claims Against Company................. 58
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
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Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance........................................................ 58
Section 8.02. Legal Defeasance and Discharge.................................... 58
Section 8.03. Covenant Defeasance............................................... 58
Section 8.04. Conditions to Legal or Covenant Defeasance........................ 59
Section 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions.......................... 60
Section 8.06. Repayment to Company.............................................. 61
Section 8.07. Reinstatement..................................................... 61
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes............................... 61
Section 9.02. With Consent of Holders of Notes.................................. 62
Section 9.03. Compliance with Trust Indenture Act............................... 63
Section 9.04. Revocation and Effect of Consents................................. 64
Section 9.05. Notation on or Exchange of Notes.................................. 64
Section 9.06. Trustee to Sign Amendments, etc................................... 64
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate.......................................... 64
Section 10.02. Certain Definitions............................................... 64
Section 10.03. Liquidation; Dissolution; Bankruptcy.............................. 65
Section 10.04. Default on Designated Senior Indebtedness......................... 65
Section 10.05. Acceleration of Notes............................................. 66
Section 10.06. When Distribution Must Be Paid Over............................... 66
Section 10.07. Notice by Company................................................. 66
Section 10.08. Subrogation....................................................... 67
Section 10.09. Relative Rights................................................... 67
Section 10.10. Subordination May Not Be Impaired by Company...................... 67
Section 10.11. Distribution or Notice to Representative.......................... 67
Section 10.12. Rights of Trustee and Paying Agent................................ 68
Section 10.13. Authorization to Effect Subordination............................. 68
Section 10.14. Amendments........................................................ 68
ARTICLE 11
GUARANTEES
Section 11.01. Guarantees........................................................ 68
Section 11.02. Execution and Delivery of Guarantee............................... 69
Section 11.03. Subordination of Guarantees....................................... 70
Section 11.04. Guarantors May Consolidate, etc., on Certain Terms................ 70
Section 11.05. Releases of Subsidiary Guarantees Following Sale of
Assets............................................................ 71
Section 11.06. Limitation on Subsidiary Guarantor Liability...................... 72
Section 11.07. "Trustee" to Include Paying Agent................................. 72
ARTICLE 12
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MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls...................................... 72
Section 12.02. Notices........................................................... 72
Section 12.03. Communication by Holders of Notes with Other Holders
of Notes.......................................................... 73
Section 12.04. Certificate and Opinion as to Conditions Precedent................ 74
Section 12.05. Statements Required in Certificate or Opinion..................... 74
Section 12.06. Rules by Trustee and Agents....................................... 74
Section 12.07 No Personal Liability of Directors, Officers, Employees
and Stockholders.................................................. 74
Section 12.08. Governing Law..................................................... 75
Section 12.09. No Adverse Interpretation of Other Agreements..................... 75
Section 12.10. Successors........................................................ 75
Section 12.11. Severability...................................................... 75
Section 12.12. Counterpart Originals............................................. 75
Section 12.13. Table of Contents, Headings, etc.................................. 75
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF GUARANTEE
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