Exhibit 4.2
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FLOWSERVE CORPORATION
Issuer
and
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Trustee
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INDENTURE
Dated as of __________, ____
$-----------
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CROSS-REFERENCE TABLE*
Trust Indenture Indenture
Act Section Section
----------- -------
310 (a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.10
(b)................................................... 7.10
(c)................................................... N.A.
311 (a)................................................... 7.11
(b)................................................... 7.11
(c)................................................... N.A.
312 (a)................................................... 2.06
(b)................................................... 11.03
(c)................................................... 11.03
313 (a)................................................... 7.06
(b)(1)................................................ N.A.
(b)(2)................................................ 7.06
(c)................................................... 7.06;11.02
(d)................................................... 7.06
314 (a)................................................... 4.02;4.03;11.02
(b)................................................... N.A.
(c)(1)................................................ 11.04
(c)(2)................................................ 11.04
(c)(3)................................................ N.A.
(d)................................................... N.A.
(e)................................................... 11.05
(f)................................................... N.A.
315 (a)................................................... 7.01
(b)................................................... 7.05;11.02
(c)................................................... 7.01
(d)................................................... 7.01
(e)................................................... 6.11
316 (a) (last sentence)................................... 2.10
(a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(a)(2)................................................ N.A.
(b)................................................... 6.07
(c)................................................... 2.13
317 (a)(1)........................................... 6.08
(a)(2)................................................ 6.09
(b)................................................... 2.05
318 (a).............................................. 11.01
(b)................................................... N.A.
(c)................................................... 11.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions...............................................1
SECTION 1.02. Other Definitions.........................................5
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.........5
SECTION 1.04. Rules of Construction.....................................6
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Issuable in Series........................................6
SECTION 2.02. Establishment of Terms of Series of Securities............7
SECTION 2.03. Execution and Authentication..............................9
SECTION 2.04. Registrar and Paying Agent...............................10
SECTION 2.05. Paying Agent to Hold Money in Trust......................11
SECTION 2.06. Holder Lists.............................................11
SECTION 2.07. Transfer and Exchange....................................11
SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities.........12
SECTION 2.09. Outstanding Securities...................................13
SECTION 2.10. Treasury Securities......................................13
SECTION 2.11. Temporary Securities.....................................13
SECTION 2.12. Cancellation.............................................13
SECTION 2.13. Defaulted Interest.......................................14
SECTION 2.14. Global Securities........................................14
SECTION 2.15. CUSIP Numbers............................................16
ARTICLE THREE
REDEMPTION AND PREPAYMENT
SECTION 3.01. Notices to Trustee.......................................17
SECTION 3.02. Selection of Securities to Be Redeemed...................17
SECTION 3.03. Notice of Redemption.....................................17
SECTION 3.04. Effect of Notice of Redemption...........................18
SECTION 3.05. Deposit of Redemption Price..............................18
SECTION 3.06. Securities Redeemed in Part..............................19
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ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities....................................19
SECTION 4.02. SEC Reports..............................................19
SECTION 4.03. Compliance Certificate...................................20
SECTION 4.04. Further Instruments and Acts.............................20
SECTION 4.05. Corporate Existence......................................20
SECTION 4.06. Calculation of Original Issue Discount...................20
ARTICLE FIVE
SUCCESSOR COMPANIES
SECTION 5.01. Merger, Consolidation or Sale of Assets..................20
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default........................................22
SECTION 6.02. Acceleration.............................................23
SECTION 6.03. Other Remedies...........................................24
SECTION 6.04. Waiver of Past Defaults..................................24
SECTION 6.05. Control by Majority......................................24
SECTION 6.06. Limitation on Suits......................................25
SECTION 6.07. Rights of Holders to Receive Payment.....................25
SECTION 6.08. Collection Suit by Trustee...............................25
SECTION 6.09. Trustee May File Proofs of Claim.........................26
SECTION 6.10. Priorities...............................................26
SECTION 6.11. Undertaking for Costs....................................26
SECTION 6.12. Waiver of Stay or Extension Laws.........................26
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee........................................27
SECTION 7.02. Rights of Trustee........................................28
SECTION 7.03. Individual Rights of Trustee.............................29
SECTION 7.04. Trustee's Disclaimer.....................................29
SECTION 7.05. Notice of Defaults.......................................29
SECTION 7.06. Reports by Trustee to Holder.............................29
SECTION 7.07. Compensation and Indemnity...............................30
SECTION 7.08. Replacement of Trustee...................................30
SECTION 7.09. Successor Trustee by Merger..............................31
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SECTION 7.10. Eligibility; Disqualification............................31
SECTION 7.11. Preferential Collection of Claims Against Company........31
ARTICLE EIGHT
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.32
SECTION 8.02. Legal Defeasance and Discharge...........................32
SECTION 8.03. Covenant Defeasance......................................32
SECTION 8.04. Conditions to Legal or Covenant Defeasance...............33
SECTION 8.05. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions...............34
SECTION 8.06. Repayment to Company.....................................35
SECTION 8.07. Reinstatement............................................35
ARTICLE NINE
AMENDMENTS
SECTION 9.01. Without Consent of Holders...............................35
SECTION 9.02. With Consent of Holders..................................37
SECTION 9.03. Compliance with Trust Indenture Act......................38
SECTION 9.04. Revocation and Effect of Consents and Waivers............38
SECTION 9.05. Notation on or Exchange of Securities....................38
SECTION 9.06. Trustee To Sign Amendments...............................39
SECTION 9.07. Payment for Consent......................................39
ARTICLE TEN
SUBSIDIARY GUARANTEES
SECTION 10.01. Subsidiary Guarantees...................................39
SECTION 10.02. Limitation on Liability.................................41
SECTION 10.03. Successors and Assigns..................................42
SECTION 10.04. No Waiver...............................................42
SECTION 10.05. Modification............................................42
SECTION 10.06. Release of Subsidiary Guarantor.........................42
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.01. Trust Indenture Act Controls............................43
SECTION 11.02. Notices.................................................43
SECTION 11.03. Communication by Holders with Other Holders.............43
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SECTION 11.04. Certificate and Opinion as to Conditions Precedent......44
SECTION 11.05. Statements Required in Certificate or Opinion...........44
SECTION 11.06. When Securities Disregarded.............................44
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar............44
SECTION 11.08. Legal Holidays..........................................44
SECTION 11.09. Governing Law...........................................45
SECTION 11.10. No Recourse Against Others..............................45
SECTION 11.11. Successors..............................................45
SECTION 11.12. Multiple Originals......................................45
SECTION 11.13. Table of Contents; Headings.............................45
SECTION 11.14. Severability............................................45
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INDENTURE dated as of ____________, ____, between FLOWSERVE
CORPORATION, a New York corporation (the "Company"), and _________________, as
trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Securities
issued under this Indenture (the "Securities"):
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.01. Definitions.
Certain terms used herein and not defined herein shall have the
meanings assigned to them in a Board Resolution, an Officer's Certificate or a
supplemental indenture. The following terms shall have the following meanings:
"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"), when used with respect to any Person, shall
mean the power to direct or cause the direction of the management or policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity.
"Clearstream" means Clearstream Banking, societe anonyme.
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"Company" means Flowserve Corporation, and any and all successors
thereto.
"Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Custodian" means the Trustee, as Custodian with respect to the
Securities in global form, or any successor entity thereto.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Definitive Security" means a certificated Security registered in the
name of the Holder thereof and issued in accordance with Section 2.07 hereof.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.14 hereof
as the Depositary with respect to the Securities, and any and all successors
thereto appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Dollar" means a dollar or other equivalent unit in such coin or
currency of the United States as at the time shall be legal tender for the
payment of public and private debt.
"Euroclear" means the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those principles set
forth in (i) the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, (ii) statements and
pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC which are in
effect on the date hereof.
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"Global Security" when used with respect to any Series of Securities
issued hereunder, means a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a Company
Order, which shall be registered in the name of the Depositary or its nominee
and which shall represent, and shall be denominated in an amount equal to the
aggregate principal amount of, all the outstanding Securities of such Series or
any portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal is
due, and interest rate or method of determining interest and which shall bear
the legend as prescribed by Section 2.14(c).
"Global Security Legend" means the legend set forth in Section
2.14(c), which is required to be placed on all Global Securities issued under
this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"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, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof), of all or any part of any Indebtedness. The term "Guarantor" shall
mean any Person Guaranteeing any obligation.
"Holder" means a Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" has the meaning specified in the applicable Board
Resolution, supplemental indenture or Officers' Certificate relating to a
particular Series of Securities.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Interest Payment Date" when used with respect to any Series of
Securities, means the date specified in such Securities for the payment of any
installment of interest on those Securities.
"Maturity," when used with respect to any Security or installment of
principal thereof, means the date on which the principal of such Security or
such installment of principal becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, notice of option to elect repayment or otherwise.
"Offering" means the offering of the Securities by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief
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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 11.04 hereof.
"Opinion of Counsel" means an opinion from legal counsel, that meets
the requirements of Section 11.04 hereof. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
"Original Issue Discount Security" means any Security that provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the maturity thereof pursuant to
Section 6.02.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to the Depository Trust Company,
shall include Euroclear and Clearstream).
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, rust,
unincorporated organization or government or any agency or political subdivision
thereof or any other entity.
"Responsible Officer" with respect to the Trustee, means any Vice
President, Assistant Vice President, Assistant Treasurer or any other officer of
the Trustee assigned by the Trustee to administer its corporate trust matters
and who customarily performs functions similar to those performed by such
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such Person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for administration of this Indenture.
"SEC" means the Securities and Exchange Commission.
"Securities" has the meaning assigned to it in the preamble to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.01
and 2.02 hereof.
"Significant Subsidiary" has the meaning specified in the applicable
Board Resolution, supplemental indenture or Officers' Certificate relating to a
particular Series of Securities.
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"Stated Maturity," when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the principal amount of such Security is due and payable.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) 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 (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of
the Company's obligations with respect to a particular Series of Securities.
"Subsidiary Guarantors" means Flowserve US Inc., Flowserve
International, Inc., Flowserve Holdings, Inc., BW/IP-New Mexico, Inc.,
Ingersoll-Dresser Pump Company, CFM-V.R. Tesco Inc., Flowserve Management
Company, Flowserve International L.L.C., Flowserve International Limited,
Flowserve Finance B.V., or any one or combination of such Subsidiaries as is
designated in a Board Resolution, supplemental indenture or an Officers'
Certificate as a "Subsidiary Guarantor" for a particular Series of Securities.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-
77bbbb) and the rules and regulations thereunder as in effect on the date on
which this Indenture is qualified under the TIA.
"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.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
Securities Act.
SECTION 1.02. Other Definitions.
Term Defined in Section
"Covenant Defeasance" 8.03
"Event of Default" 6.01
"Legal Defeasance" 8.02
"Legal Holiday" 11.08
"Paying Agent" 2.04
"Payment Default" 6.01
"Registrar" 2.04
"Service Agent" 2.04
"Subsidiary Guarantor Obligations" 10.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by
5
reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security Holder" means a Holder of a Security;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Securities means the Company and any successor
obligor upon the Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by the TIA's 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 or successor sections or rules
adopted by the SEC from time to time.
ARTICLE TWO
THE SECURITIES
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SECTION 2.01. Issuable in Series. The aggregate principal amount of
Securities that may be authenticated and delivered under this Indenture is
unlimited. The Securities may be issued in one or more Series. All Securities of
a Series shall be identical except as may be set forth in a Board Resolution, a
supplemental indenture or an Officers' Certificate detailing the adoption of the
terms thereof pursuant to the authority granted under a Board Resolution. In the
case of Securities of a Series to be issued from time to time, the Board
Resolution, Officers' Certificate or supplemental indenture may provide for the
method by which specified terms (such as interest rate, maturity date,
6
record date or date from which interest shall accrue) are to be determined.
Securities may differ between Series in respect of any matters.
SECTION 2.02. Establishment of Terms of Series of Securities. At or
prior to the issuance of any Securities within a Series, the following shall be
established (as to the Series generally, in the case of Subsection 2.02(a) and
either as to such Securities within the Series or as to the Series generally in
the case of Subsections 2.02(b) through 2.02(x)) by a Board Resolution, a
supplemental indenture or an Officers' Certificate pursuant to authority granted
under a Board Resolution:
(a) the title of the Securities of the Series (which shall distinguish
the Securities of that particular Series from the Securities of any other
Series);
(b) any limit upon the aggregate principal amount of the Securities of
the Series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the Series);
(c) the date or dates on which the principal and premium of the
Securities of the Series are payable;
(d) the rate or rates (which may be fixed or variable) at which the
Securities of the Series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest, if
any, shall accrue, the Interest Payment Dates on which such interest, if any,
shall be payable or the method by which such dates will be determined, the
record dates, for the determination of Holders thereof to whom such interest is
payable (in the case of Securities in registered form), and the basis upon which
such interest will be calculated if other than that of a 360-day year of twelve
30-day months;
(e) the currency or currencies, including composite currencies in
which Securities of the Series shall be denominated, if other than Dollars, the
place or places, if any, in addition to or instead of the Corporate Trust Office
of the Trustee (in the case of Securities in registered form) or the principal
New York office of the Trustee (in the case of Securities in bearer form), where
the principal, premium and interest with respect to Securities of such Series
shall be payable or the method of such payment, if by wire transfer, mail or
other means;
(f) the price or prices at which, the period or periods within which,
and the terms and conditions upon which, Securities of the Series may be
redeemed, in whole or in part at the option of the Company or otherwise;
(g) whether Securities of the Series are to be issued in registered
form or bearer form or both and, if Securities are to be issued in bearer form,
whether coupons will be attached to them, whether Securities of the Series in
bearer form may be exchanged for Securities of the Series issued in registered
form, and the circumstances under which and the places at which any such
exchanges, if permitted, may be made;
(h) if any Securities of the Series are to be issued in bearer form or
as one or more Global Securities representing individual Securities of the
Series in bearer form,
7
whether certain provisions for the payment of additional interest or tax
redemptions shall apply; whether interest with respect to any portion of a
temporary Security of the Series in bearer form payable with respect to any
Interest Payment Date prior to the exchange of such temporary Security in
bearer form for definitive Securities of the Series in bearer form shall be
paid to any clearing organization with respect to the portion of such
temporary Security in bearer form held for its account and, in such event, the
terms and conditions (including any certification requirements) upon which any
such interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date; and
the terms upon which a temporary Security in bearer form may be exchanged for
one or more definitive Securities of the Series in bearer form;
(i) the obligation, if any, of the Company to redeem, purchase or
repay the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Securities of the Series shall be redeemed, purchased or repaid, in whole
or in part, pursuant to such obligations;
(j) the terms, if any, upon which the Securities of the Series may be
convertible into or exchanged for any of the Company's common stock, preferred
stock, other debt securities or warrants for common stock, preferred stock or
other securities of any kind and the terms and conditions upon which such
conversion or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
additional provisions;
(k) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Securities of the Series shall be
issuable;
(l) if the amount of principal, premium or interest with respect to
the Securities of the Series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(m) if the principal amount payable at the Stated Maturity of
Securities of the Series will not be determinable as of any one or more dates
prior to such Stated Maturity, the amount that will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any Maturity other than the
Stated Maturity and which will be deemed to be outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to be
determined), and if necessary, the manner of determining the equivalent thereof
in Dollars;
(n) any changes or additions to Article Eight;
(o) if other than the principal amount thereof, the portion of the
principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.02;
(p) the terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Securities of the Series of any properties, assets, moneys,
proceeds, securities or other collateral, including whether certain provisions
of the TIA are
8
applicable and any corresponding changes to provisions of this Indenture as then
in effect;
(q) any addition to or change in the Events of Default which applies
to any Securities of the Series and any change in the right of the Trustee or
the requisite Holders of such Series of Securities to declare the principal
amount of, premium, if any, and interest on such Series of Securities due and
payable pursuant to Section 6.02;
(r) if the Securities of the Series shall be issued in whole or in
part in the form of a Global Security, the terms and conditions, if any, upon
which such Global Security may be exchanged in whole or in part for other
individual Definitive Securities of such Series, the Depositary for such Global
Security and the form of any legend or legends to be borne by any such Global
Security in addition to or in lieu of the Global Securities Legend;
(s) any Trustee, authenticating agent, Paying Agent, transfer agent,
Service Agent or Registrar;
(t) the applicability of, and any addition to or change in, the
covenants (and the related definitions) set forth in Articles Four or Five which
applies to Securities of the Series;
(u) the names, if any, of the Subsidiary Guarantors and the terms of
the Subsidiary Guarantees, including any provisions related to their
subordination;
(v) the subordination, if any, of the Securities of the Series
pursuant to this Indenture;
(w) with regard to Securities of the Series that do not bear interest,
the dates for certain required reports to the Trustee;
(x) any United States Federal income tax consequences applicable to
the Securities;
(y) the terms applicable to Original Issue Discount Securities,
including the rate or rates at which original issue discount will accrue;
(z) any other terms of Securities of the Series (which terms shall not
be prohibited by the provisions of this Indenture).
All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.
SECTION 2.03. Execution and Authentication. One or more Officers shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer
9
whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall nevertheless be valid. A
Security shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent. The signature shall be conclusive evidence
that the Security has been authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.
The aggregate principal amount of Securities of any Series outstanding
at any time may not exceed any limit upon the maximum principal amount for such
Series set forth in the Board Resolution, supplemental indenture hereto or
Officers' Certificate delivered pursuant to Section 2.02, except as provided in
Section 2.08.
Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.02) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 11.04, and (c) an Opinion of Counsel complying with Section 11.04.
The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice- presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain,
with respect to each Series of Securities, at the place or places specified with
respect to such Series pursuant to Section 2.02, an office or agency where
Securities of such Series may be presented or surrendered for payment ("Paying
Agent"), where Securities of such Series may be presented for registration of
transfer or exchange ("Registrar") and where notices and demands to or upon the
Company in respect of the Securities of such Series and this Indenture may be
served ("Service Agent"). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of
10
the name and address, and any change in the name or address, of each
Registrar, Paying Agent or Service Agent. If at any time the Company shall
fail to maintain any such required Registrar, Paying Agent or Service Agent or
shall fail to furnish the Trustee with the name and address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.02 for Securities of any Series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the name or address of any
such co-registrar, additional paying agent or additional service agent. The term
"Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.
The Company hereby appoints the Trustee as the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.
SECTION 2.05. 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 of any Series of
Securities, or the Trustee, all money held by the Paying Agent for the payment
of principal of or interest on the Series of Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of Holders of
any Series of Securities all money held by it as Paying Agent.
SECTION 2.06. 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 Holders of each Series of Securities 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 ten 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 Holders of each Series of Securities.
SECTION 2.07. Transfer and Exchange. When Securities of a Series are
presented to the Registrar or a co-registrar with a request to register a
transfer or to exchange them for an equal principal amount of Securities of the
same Series, the Registrar shall register the transfer or make the exchange if
its requirements for such
11
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), 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 tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.06 or
9.05).
Neither the Company nor the Registrar shall be required (a) to issue,
register the transfer of, or exchange Securities of any Series for the period
beginning at the opening of business fifteen days immediately preceding the
mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer or exchange of Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.
SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a new Security
of the same Series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
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SECTION 2.09. Outstanding Securities. The Securities outstanding at
any time are all the Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation, those reductions in the
interest on a Global Security effected by the Trustee in accordance with the
provisions hereof and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be outstanding for such
purposes shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon a declaration of acceleration
of the Maturity thereof pursuant to Section 6.02.
SECTION 2.10. Treasury Securities. In determining whether the Holders
of the required principal amount of Securities of a Series have concurred in any
request, demand, authorization, direction, notice, consent or waiver, Securities
of a Series owned by the Company or an Affiliate shall be disregarded, except
that for the purposes of determining whether the Trustee shall be protected in
relying on any such request, demand, authorization, direction, notice, consent
or waiver only Securities of a Series that a Responsible Officer of the Trustee
actually knows are so owned shall be so disregarded.
SECTION 2.11. Temporary Securities. Until Definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities upon a Company Order. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee upon request shall authenticate
Definitive Securities of the same Series and date of maturity in exchange for
temporary Securities. Until so exchanged, temporary Securities shall have the
same rights under this Indenture as the Definitive Securities.
SECTION 2.12. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment, replacement or cancellation and
shall dispose of such canceled Securities according to its normal operating
procedures (subject to the record retention requirement of the Exchange Act) and
deliver a certificate of such destruction to the
13
Company, unless the Company otherwise directs. The Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
SECTION 2.13. Defaulted Interest. If the Company defaults in a payment
of interest on a Series of Securities, it shall pay the defaulted interest,
plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the persons who are Holders of the Series on a subsequent special
record date. The Company shall fix the record date and payment date. At least 30
days before the record date, the Company shall mail to the Trustee and to each
Holder of the Series a notice that states the record date, the payment date and
the amount of interest to be paid. The Company may pay defaulted interest in any
other lawful manner.
SECTION 2.14. Global Securities.
(a) Terms of Securities. A Board Resolution, a supplemental indenture
hereto or an Officers' Certificate shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and the Depositary for such Global Security or Securities.
(b) Transfer and Exchange. Notwithstanding any provisions to the
contrary contained in Section 2.07 of the Indenture and in addition thereto, any
Global Security shall be exchangeable pursuant to Section 2.07 of the Indenture
for Securities registered in the names of Holders other than the Depositary for
such Security or its nominee only if (i) such Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depositary within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as the Depositary shall direct in writing in an aggregate principal amount
equal to the principal amount of the Global Security with like tenor and terms.
Except as provided in this Section 2.14(b) a Global Security may not
be transferred except as a whole by the Depositary with respect to such Global
Security to a nominee of such Depositary, by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by the Depositary or
any such nominee to a successor Depositary or a nominee of such a successor
Depositary.
(c) Legend. Any Global Security issued hereunder shall bear a legend
in substantially the following form:
"THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF
THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL SECURITY
MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
14
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE
INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR
DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF FLOWSERVE CORPORATION"
(d) Acts of Holders. (i) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(ii) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(iii) The ownership of bearer securities may be proved by the
production of such bearer securities or by a certificate executed by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the bearer securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such bearer
securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
bearer security continues until (i) another such certificate or affidavit
bearing a later date issued in respect of the same bearer security is produced,
(ii) such bearer security is produced to the Trustee by some other Person, (iii)
such bearer security is surrendered in exchange for a registered security or
(iv) such bearer security is no longer outstanding. The ownership of bearer
securities may also be proved in any other manner which the Trustee deems
sufficient.
(iv) The ownership of registered securities shall be proved by the
register maintained by the Registrar.
(v) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be
15
done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(vi) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to a Board Resolution, fix in advance
a record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or other Act
may be given before or after such record date, but only the Holders of record at
the close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
The Depositary, as a Holder, may appoint agents and otherwise
authorize Participants to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action which a Holder is entitled to
give or take under the Indenture.
(e) Payments. Notwithstanding the other provisions of this Indenture,
unless otherwise specified as contemplated by Section 2.02, payment of the
principal of and interest, if any, on any Global Security shall be made to the
Holder thereof.
(f) Consents, Declaration and Directions. Except as provided in
Section 2.14(e), the Company, the Trustee and any Agent shall treat a person as
the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.
SECTION 2.15. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
elements of identification printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in CUSIP Numbers.
16
ARTICLE THREE
REDEMPTION AND PREPAYMENT
-------------------------
SECTION 3.01. Notices to Trustee. The Company may, with respect to any
Series of Securities, reserve the right to redeem and pay the Series of
Securities or may covenant to redeem and pay the Series of Securities or any
part thereof prior to the Stated Maturity thereof at such time and on such terms
as provided for in such Series of Securities. If a Series of Securities is
redeemable and the Company wants or is obligated to redeem prior to the Stated
Maturity thereof all or part of the Series of Securities pursuant to the terms
of such Securities, it shall notify the Trustee of the redemption date and the
principal amount of Securities of the Series to be redeemed and the redemption
price. The Company shall give such notice to the Trustee at least 30 but no more
that 60 days before the redemption date (or such shorter notice as may be
acceptable to the Trustee).
SECTION 3.02. Selection of Securities to Be Redeemed. Unless otherwise
indicated for a particular Series by a Board Resolution, a supplemental
indenture or an Officer's Certificate, if less than all of the Securities are to
be redeemed or purchased in an offer to purchase at any time, the Trustee shall
select the Securities to be redeemed or purchased as follows:
(1) if the Securities are listed on any national securities exchange,
in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed; or
(2) if the Securities are not listed on any national securities
exchange, on a pro rata basis, by lot or by such other method as the
Trustee shall deem fair and appropriate.
No Securities of $1,000 of principal amount or less will be redeemed
in part. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall make the selection at
least 25 days but not more than 60 days before the redemption date from
outstanding Securities of a Series not previously called for redemption.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount of that Security to be redeemed. A new Security in principal
amount equal to the unredeemed portion of the original Security presented for
redemption will be issued in the name of the Holder thereof upon cancellation of
the original Security. Securities called for redemption become due on the date
fixed for redemption. On and after the redemption date, interest ceases to
accrue or accrete on Securities or portions of them called for redemption.
SECTION 3.03. Notice of Redemption. Unless otherwise provided for a
particular Series of Securities by a Board Resolution, a supplemental indenture
or an Officers' Certificate, 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 Securities are to be redeemed
at its registered address.
17
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the
redemption date upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Security;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities and/or provision of this Indenture
or any supplemental indenture pursuant to which the Securities called for
redemption are being redeemed; and
(8) the CUSIP or ISIN number, if any, printed on the Securities being
redeemed;
(9) that no representation is made as to the correctness or accuracy
of the CUSIP or ISIN number, if any, listed in such notice or printed on
the Securities.
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 required
by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Securities called
for redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. (New
York City time) on the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if any Issuer or a Subsidiary of any of
the Issuers is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of, and accrued interest on, all
Securities to be redeemed on that date, other than Securities or
18
portions of Securities called for redemption that have been delivered by the
Issuers to the Trustee for cancellation. The Trustee or the Paying Agent shall
as promptly as practicable 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 Securities to be
redeemed. If such money is then held by the Issuers in trust and is not
required for such purpose it shall be discharged from such trust.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Securities or the portions of Securities called for redemption. If a
Security 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 Security was registered at the close of
business on such record date. If any Security called for redemption shall not be
so paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, 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 Securities.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and, upon the
Company's written request, the Trustee shall authenticate for the Holder (at the
Company's expense) a new Security equal in principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
---------
SECTION 4.01. Payment of Securities. The Company covenants and agrees
for the benefit of the Holders of each Series of Securities that it will duly
and punctually make all payments in respect of each Series of Securities on the
dates and in the manner provided in such series of Securities and this
Indenture. Such payments shall be considered made on the date due if on such
date the Trustee or the Paying Agent holds, in accordance with this Indenture,
money sufficient to make all payments with respect to such Securities then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Holders on that date pursuant to the terms of this
Indenture.
SECTION 4.02. SEC Reports. Unless otherwise indicated in a Board
Resolution, a supplemental indenture hereto or an Officer's Certificate,
notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, so long as any
Securities are outstanding, the Company shall furnish to the Holders copies of
its annual report and the information, documents and other reports that are
specified in Sections 13 and 15(d) of the Exchange Act. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Company's compliance with any of the covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates). The Company also shall comply with the other provisions of TIA
ss. 314(a).
19
In addition, whether or not required by the rules and regulations of
the SEC, the Company shall file a copy of all such information and reports with
the SEC for public availability within the time periods specified in the SEC's
rules and regulations (unless the SEC will not accept such a filing) and make
such information available to securities analysts and prospective investors upon
request. The Company shall at all times comply with TIA ss. 314(a).
SECTION 4.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Issuers are taking or propose to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.04. Further Instruments and Acts. The Company shall execute
and deliver to the Trustee such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
SECTION 4.05. Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect:
(1) 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
(2) 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
the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in
any material respect to the Holders of the Securities.
SECTION 4.06 Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.
ARTICLE FIVE
SUCCESSOR COMPANIES
-------------------
SECTION 5.01. Merger, Consolidation or Sale of Assets. Unless
otherwise provided for a particular Series of Securities by a Board Resolution,
a supplemental
20
indenture or an Officers' Certificate, the Company shall not consolidate with
or merge into or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one transaction or
series of transactions, to another Person unless:
(a) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia;
(b) 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 the
sale, assignment, transfer, lease, conveyance or other disposition shall
have been made assumes all the Obligations (as defined in the Board
Resolution, a supplemental indenture hereto or an Officers' Certificate for
a particular Series) of the Company under the Securities and this Indenture
pursuant to a supplemental indenture in a form reasonably satisfactory to
the Trustee;
(c) immediately after giving effect such transaction no Default shall
have occurred and be continuing;
(d) immediately after giving effect to such transaction, the Successor
Company shall have Consolidated Net Worth (as defined in the Board
Resolution, supplemental indenture hereto or an Officer's Certificate for a
particular Series) in an amount that is not less than the Consolidated Net
Worth of the Company immediately prior to such transaction; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture (as
modified or supplemented by a Board Resolution, supplemental indenture hereto or
an Officers' Certificate), and the predecessor Company, except in the case of a
lease of all or substantially all of its assets, shall be released from the
obligation to pay the principal of and interest on the Securities.
The Company shall not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its
assets to any Person unless: (1) except in the case of a Subsidiary Guarantor
that has been disposed of in its entirety to another Person (other than to the
Company or an Affiliate of the Company), whether through a merger,
consolidation or sale of Capital Stock or assets, the resulting, surviving or
transferee Person (if not such Subsidiary) shall be a Person organized and
existing under the laws of the jurisdiction under which such Subsidiary was
organized or under the laws of the United States of America, or any State
thereof or the District of Columbia, and such Person shall expressly assume,
by a guaranty agreement, in a form satisfactory to the Trustee, all the
obligations of such Subsidiary, if any, under its Subsidiary Guarantee of the
Securities; (2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which becomes
an obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been issued by such Person at the
21
time of such transaction), no Default shall have occurred and be continuing;
and (3) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
and such guaranty agreement, if any, complies with this Indenture.
ARTICLE SIX
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01. Events of Default. Unless otherwise indicated for a
particular Series of Securities by a Board Resolution, a supplemental indenture
hereto, or an Officers' Certificate, each of the following constitutes an "Event
of Default" with respect to each Series of Securities:
(1) default for 30 days in the payment of interest when due on the
Securities;
(2) default in the payment of the principal of or premium, if any,
when due on the Securities;
(3) the Company fails to comply with the provisions described under
Article 5 hereof;
(4) the Company fails to comply with Section 4.02, 4.03 or 4.04 and
such failure continues for 30 days after notice (as specified below);
(5) the Company or any Subsidiary Guarantor fails to comply with any
of its agreements in the Securities or this Indenture (other than those referred
to in clause (1), (2), (3) or (4) above) and such failure continues for 60 days
after the notice specified below;
(6) Indebtedness (as defined in the applicable Board Resolution,
supplemental indenture hereto or Officers' Certificate relating to a particular
Series of Securities) of any Subsidiary Guarantor, the Company or any
Significant Subsidiary is not paid within any applicable grace period after
final maturity or is accelerated by the holders thereof because of a default and
the total amount of such Indebtedness unpaid or accelerated exceeds $10.0
million, or its foreign currency equivalent at the time;
(7) any Subsidiary Guarantor, the Company or any Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
22
or takes any comparable action under any foreign laws relating to insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against any Subsidiary Guarantor, the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of any Subsidiary Guarantor, the Company or
any Significant Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of any Subsidiary Guarantor,
the Company or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $10.0
million or its foreign currency equivalent at the time is entered against any
Subsidiary Guarantor, the Company or any Significant Subsidiary, remains
outstanding for a period of 60 days following the entry of such judgment or
decree and is not discharged, waived or the execution thereof stayed within 10
days after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of this Indenture) or a Subsidiary
Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Custodian" means, for the purposes of this Article Six, any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default with respect to any
Series of Securities at the time outstanding (other than an Event of Default
specified in
23
Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Securities of that Series by notice to the Company, may declare
the principal amount of (or, in the case of Original Issue Discount Securities
of that Series, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on all the Securities of that
Series to be due and payable. Upon such a declaration, such amounts shall be
due and payable immediately. If an Event of Default specified in Section
6.01(7) or (8) with respect to the Company occurs, the principal amount of
(or, in the case of Original Issue Discount Securities of that Series, the
portion thereby specified in the terms of such Security), premium, if any, and
accrued and unpaid interest on all the Securities of each Series of Security
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the Securities of any Series of
Securities by notice to the Trustee may rescind an acceleration of that Series
of Securities and its consequences if the rescission would not conflict with
any judgment or decree and if all existing Events of Default with respect to
such Series of Securities have been cured or waived except nonpayment of the
principal amount of (or, in the case of Original Issue Discount Securities of
that Series, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on all Securities of that
Series that has become due solely because of acceleration. No such rescission
shall affect any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default with respect to
any Series of Securities occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the principal amount of (or, in the
case of Original Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued and
unpaid interest on the Securities of that Series or to enforce the performance
of any provision of the Securities of that Series or this Indenture.
The Trustee may institute and maintain a suit or legal proceeding even
if it does not possess any of the Securities of a Series or does not produce any
of them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default with respect to
any Series of Securities shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities of any Series by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal amount of (or, in the case of Original Issue Discount
Securities of that Series, the portion thereby specified in the terms of such
Security), premium, if any, and accrued and unpaid interest on a Security of
that Series, (ii) a Default arising from the failure to redeem or purchase any
Security of that Series when required pursuant to the terms of this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Holder of that Series affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the outstanding Securities of any Series may direct the
time, method
24
and place of conducting any proceeding for any remedy available to the Trustee
or of exercising any trust or power conferred on the Trustee with respect to
that Series. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of any other Holder of
that Series or that would subject the Trustee to personal liability; provided,
however, that the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction. Prior to taking any
action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses
caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of the principal amount of (or, in the case of Original Issue
Discount Securities, the portion thereby specified in the terms of such
Security), premium, if any, and accrued and unpaid interest on a Security of any
Series when due, no Holder of a Security of that Series may pursue any remedy
with respect to this Indenture or the Securities of that Series unless:
1. the Holder previously gave the Trustee written notice stating that
an Event of Default with respect to that Series is continuing;
2. the Holders of at least 25%, in principal amount of the outstanding
Securities of that Series make a written request to the Trustee to pursue the
remedy;
3. such Holder or Holders of that Series offer to the Trustee security
or indemnity satisfactory to the Trustee against any loss, liability or expense;
4. the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
5. the Holders of a majority in aggregate principal amount of the
outstanding Securities of that Series do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Holder of Securities of any Series may not use this Indenture to
prejudice the rights of another Holder of that Series or to obtain a preference
or priority over another Holder of that Series.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of the principal amount of (or, in the case of Original Issue Discount
Securities, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest on the Securities held by such
Holder, on or after their Maturity, or to bring suit for the enforcement of any
such payment on or after their Maturity, 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(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
25
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may 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 and the Holders allowed in
any judicial proceedings relative to the Company, its creditors or its property
and, unless prohibited by law or applicable regulations, may vote on behalf of
the Holders in any election of a trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6 with respect to any Series of Securities, it
shall pay out the money or property in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders for amounts due and unpaid on the Securities of
that Series for the principal amount of (or, in the case of Original Issue
Discount Securities of that Series, the portion thereby specified in the terms
of such Security), premium, if any, and accrued and unpaid interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Securities of that Series for the principal amount of (or, in the
case of Original Issue Discount Securities of that Series, the portion thereby
specified in the terms of such Security), premium, if any, and accrued and
unpaid interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section. At least 15 days before such record date, the
Trustee shall mail to each Holder and the Company a notice that states the
record date, the payment date and amount to be paid.
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 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 and expenses, 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 or a suit by
Holders of more than 10% in principal amount of the then outstanding Securities
of any Series.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall at any time insist upon, plead, or in any
manner whatsoever claim to take the benefit or advantage of, any stay or
extension law, wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and shall not hinder,
26
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE SEVEN
TRUSTEE
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing with respect to any Series of Securities, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise thereof as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default with respect
to any Series of Securities:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture with respect to the Securities
of that Series, as modified or supplemented by a Board Resolution, a
supplemental indenture hereto or an Officers' Certificate and no implied
covenants or obligations shall be read into this Indenture against the Trustee;
and
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of that Series, 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 (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own grossly
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) 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
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) 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.
27
(f) Money held in trust by the Trustee need not be segregated from
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely
on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or gross negligence.
(e) The Trustee may consult with counsel of its choice, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities, shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
(f) 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.
(g) The Trustee shall not be deemed to have notice of any Default or
Event of Default with respect to the Securities of any Series unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice references
such Securities and this Indenture.
(h) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to and shall
28
be enforceable by, the Trustee in each of its capacities hereunder, and to
each agent, custodian and other Person employed to act hereunder.
(i) 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 this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and liabilities which might be incurred by
the Trustee in compliance with such request or direction.
(j) 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,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(k) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying
agent may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture, in the Securities, or in any
document executed in connection with the sale of the Securities, other than
those set forth in the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default with respect to
Securities of any Series occurs and is continuing and if it is actually known to
a Trust Officer of the Trustee, the Trustee shall mail to each Holder of that
Series notice of the Default within 90 days after it occurs. 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
Holders.
SECTION 7.06. Reports by Trustee to Holder. Unless otherwise specified
in the applicable Board Resolution, supplemental indenture hereto or Officers'
Certificate, as promptly as practicable after each ________ beginning with the
_________ for so long as Securities remain outstanding, the Trustee shall mail
to each Holder a brief report dated as of such reporting date that complies with
ss. 313(a) of the TIA. The Trustee shall also comply with ss. 313(b) of the TIA.
29
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation for its services as the Company and
the Trustee shall from time to time agree in writing. 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 upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. The Company shall indemnify
the Trustee against any and all loss, liability or expense (including reasonable
attorneys' fees) incurred by or in connection with the administration of this
trust and the performance of its duties hereunder. The Trustee shall notify the
Company of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company of its indemnity obligations hereunder.
The Company need not reimburse any expense or indemnify against any loss,
liability or expense incurred by an indemnified party through such party's own
willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
the principal of and interest and any additional payments on particular
Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time with respect to the Securities of any Series by so notifying the Company.
The Holders of a majority in principal amount of the Securities of any Series
may remove the Trustee and may appoint a successor Trustee with respect to such
Series of Securities. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities of any Series and such Holders
do not
30
reasonably promptly appoint a successor Trustee or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuers shall promptly appoint 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 that Series of Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities of that Series may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder of that
Series of Securities may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and if at
that time any of the Securities shall not have been authenticated, any such
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIAss. 311(a), excluding any creditor relationship
listed in TIA
31
ss. 311(b). A Trustee who has resigned or has been removed shall be subject
to TIA
ss. 311(a) to the extent indicated.
ARTICLE EIGHT
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 Securities
of any Series upon compliance with the conditions set forth below in this
Article Eight.
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 Securities of that Series 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
Securities, 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 Securities and this Indenture (and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder:
(a) the rights of Holders of outstanding Securities of that Series 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 on such Securities when such payments are due;
(b) the Company's obligations with respect to such Securities of that
Series under Article Two;
(c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and the Company's obligations in connection therewith; and
(d) this Article Eight.
Subject to compliance with this Article Eight, the Company may
exercise its option under this Section 8.02 notwithstanding the prior exercise
of its option under Section 8.03 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 with respect
to any Series of Securities, 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 a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate and
32
clause (iv) of Section 5.01 hereof with respect to the outstanding Securities
of that Series on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Securities of that
Series 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 Securities shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Securities of that Series, 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 Securities 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 with respect to any Series
of Securities, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(3) through 6.01(6) and 6.01(9) hereof shall
not constitute Events of Default with respect to such Securities.
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 Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance
with respect to any Series of Securities:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of that Series of Securities, cash in United
States dollars, noncallable Government Securities, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium, if
any, and interest on the outstanding Securities of that Series on the stated
date for payment thereof or on the applicable redemption date, as the case may
be;
(2) 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 Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(3) 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 Securities of that Series 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,
33
in the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) no Default or Event of Default with respect to that Series of
Securities shall have occurred and be continuing either:
(a) on the date of such deposit (other than a Default or Event of
Default with respect to that Series of Securities resulting from the
borrowing of funds to be applied to such deposit); or
(b) insofar as Sections 6.01(7) or 6.01(8) hereof are concerned, at
any time in the period ending on the 91st day after the date of deposit;
(5) 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 is a party or by
which the Company is bound;
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that on the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(7) 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 or with the
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company or others; and
(8) 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 noncallable 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 Securities of the Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities 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 Securities 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 noncallable
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
Securities of that Series.
34
Anything in this Article Eight 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 noncallable 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(1) 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 Security and
remaining unclaimed for two years after such principal, and premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or, if then held by the Company, shall be discharged from such trust; and the
Holder of such Security shall thereafter look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to
such trust money, 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 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 Dollars or noncallable 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 Securities 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 Security following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS
----------
SECTION 9.01. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend or supplement this Indenture or the
Securities without the consent of any Holder:
(1) to evidence the succession of another Person to the Company or any
Subsidiary Guarantor pursuant to Article Five and the assumption by such
successor of the Company's or such Subsidiary Guarantor's covenants,
agreements and obligations in this Indenture and in the Securities;
35
(2) to surrender any right or power conferred upon the Company or any
Subsidiary Guarantor by this Indenture, to add to the covenants of the
Company or any Subsidiary Guarantor such further covenants, restrictions,
conditions or provisions for the protection of the Holders of all or any
Series of Securities as the Board of Directors of the Company shall
consider to be for the protection of the Holders of such Securities, and to
make the occurrence, or the occurrence and continuance, of a default in
respect of any such additional covenants, restrictions, conditions or
provisions a Default or an Event of Default under this Indenture; provided,
however, that with respect to any such additional covenant, restriction,
condition or provision, such amendment may provide for a period of grace
after default, which may be shorter or longer than that allowed in the case
of other Defaults, may provide for an immediate enforcement upon such
Default, may limit the remedies available to the Trustee upon such Default
or may limit the right of Holders of a majority in aggregate principal
amount of the Securities of any Series to waive such default;
(3) to cure any ambiguity or correct or supplement any provision
contained in this Indenture, in any supplemental indenture or in any
Securities that may be defective or inconsistent with any other provision
contained therein;
(4) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or to make such other provisions in regard to matters or
questions arising under this Indenture as shall not adversely affect the
interests of any Holders of Securities of any Series;
(5) to modify or amend this Indenture in such a manner as to permit
the qualification of this Indenture or any supplemental indenture hereto
under the TIA as then in effect;
(6) to add or to change any of the provisions of this Indenture to
provide that Securities in bearer form may be registrable as to principal,
to change or eliminate any restrictions on the payment of principal or
premium with respect to Securities in registered form or of principal,
premium or interest with respect to Securities in bearer form, or to permit
Securities in registered form to be exchanged for Securities in bearer
form, so as to not adversely affect the interests of the Holders or any
coupons of any Series in any material respect or permit or facilitate the
issuance of Securities of any Series in uncertificated form;
(7) in the case of subordinated Securities, to make any change in the
provisions of this Indenture or any supplemental indenture relating to
subordination that would limit or terminate the benefits available to any
holder of Senior Indebtedness (as defined in the applicable Board
Resolution, supplemental indenture hereto or Officers' Certificate related
to such Series of Subordinated Securities) under such provisions (but only
if each such holder of Senior Indebtedness under such provisions consents
to such change);
(8) to add Subsidiary Guarantees with respect to the Securities or to
secure the Securities;
36
(9) to make any change that does not adversely affect the rights of
any Holder;
(10) to add to, change, or eliminate any of the provisions of this
Indenture with respect to one or more Series of Securities, so long as any
such addition, change or elimination not otherwise permitted under this
Indenture shall (A) neither apply to any Security of any Series created
prior to the execution of such supplemental indenture and entitled to the
benefit of such provision nor modify the rights of the Holders of any such
Security with respect to the benefit of such provision or (B) become
effective only when there is no such Security outstanding;
(11) to evidence and provide for the acceptance of appointment by a
successor or separate Trustee with respect to the Securities of one or more
Series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of this
Indenture by more than one Trustee; or
(12) to establish the form or terms of Securities and coupons of any
Series pursuant to Article Two.
SECTION 9.02. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities of any
Series without notice to any Holder but with the written consent of the Holders
of at least a majority in principal amount of the Securities of each Series then
outstanding (including consents obtained in connection with a tender offer or
exchange for the Securities) affected by such amendment. However, without the
consent of each Holder affected, an amendment may not:
(1) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the rate of or extend the time for payment of interest,
including default interest, on any Security;
(3) reduce the principal of or change the Stated Maturity of any
Security or alter or waive any of the provisions with respect to the redemption
of the Securities;
(4) reduce the amount payable upon the redemption of any Security or
change the time at which such Security may be redeemed, if applicable;
(5) make any Security payable in money other than that stated in the
Security;
(6) in the case of any subordinated Security, make any change in the
ranking or priority of such Security that would adversely affect the rights of
the Holders;
(7) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Securities (except a rescission of
acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities and a waiver of
the payment default that resulted from such acceleration);
37
(8) make any change in the provisions of this Indenture relating to
waivers of past Defaults or the rights of Holders of Securities to receive
payments of principal of, or premium, if any, or interest on the Securities;
(9) waive a redemption payment with respect to any Security;
(10) except as provided under Article Eight hereof or in accordance
with the terms of any Subsidiary Guarantee, release any Subsidiary Guarantor
from any of its obligations under its Subsidiary Guarantee or make any change in
a Subsidiary Guarantee that would adversely affect the Holders of the
Securities; or
(11) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof. After an amendment
under this Section becomes effective, the Company shall mail to all affected
Holders a notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Holder. An amendment or waiver
becomes effective once both (i) the requisite number of consents have been
received by the Company or the Trustee and (ii) such amendment or waiver has
been executed by the Company and the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to give their consent or take
any other action described above or required or permitted to be taken pursuant
to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security
38
regarding the changed terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in exchange for the Security
shall issue and the Trustee shall authenticate a new Security that reflects
the changed terms. Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article Nine if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders, ratably, that so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
ARTICLE TEN
SUBSIDIARY GUARANTEES
---------------------
SECTION 10.01. Subsidiary Guarantees. If so provided in a Board
Resolution, supplemental indenture hereto or Officers' Certificate with respect
to a Series of Securities, subject to this Article Ten, each Subsidiary
Guarantor hereby unconditionally and irrevocably guarantees, jointly and
severally, to each Holder and to the Trustee and its successors and assigns (a)
the full and punctual payment of principal of and interest on such Series of
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture and such Series of Securities and (b) the full and punctual
performance within applicable grace periods of all other obligations of the
Company under this Indenture and such Series of Securities (all the foregoing
being hereinafter collectively called the "Subsidiary Guarantor Obligations").
Each Subsidiary Guarantor will further agree that the Subsidiary Guarantor
Obligations may be extended or renewed, in whole or in part, without notice or
further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article Ten notwithstanding any extension or
renewal of any Subsidiary Guarantor Obligation.
In addition, if a Subsidiary Guarantee has been so provided by Board
Resolution, supplemental indenture hereto or Officers' Certificate with respect
to a particular Series of Securities, each of the applicable Subsidiary
Guarantors shall (1) waive presentation to, demand of, payment from and protest
to the Company of any of the Subsidiary Guarantor Obligations and also shall
waive notice of protest for nonpayment and (2) waive notice of any default under
the Securities or the Subsidiary Guarantor Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected
39
by (a) the failure of any Holder or the Trustee to assert any claim or demand
or to enforce any right or remedy against the Company or any other Person
under this Indenture, such Securities or any other agreement or otherwise; (b)
any extension or renewal of any thereof; (c) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Indenture, such
Securities or any other agreement; (d) the release of any security held by any
Holder or the Trustee for the Subsidiary Guarantor Obligations or any of them;
(e) the failure of any Holder or the Trustee to exercise any right or remedy
against any other guarantor of the Subsidiary Guarantor Obligations; or (f)
except as set forth in Section 10.06, any change in the ownership of such
Subsidiary Guarantor.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee, each Subsidiary Guarantor will
further agree that its Subsidiary Guarantee constitutes a guarantee of payment,
performance and compliance when due (and not a guarantee of collection) and will
waive any right to require that any resort be had by any Holder or the Trustee
to any security held for payment of the Subsidiary Guarantor Obligations.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, the Subsidiary Guarantee set forth in this Article Ten
will be subordinated to the extent and in the manner set forth in the applicable
Board Resolution, supplemental indenture or Officers' Certificate, as the case
may be.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, and except as expressly set forth in Sections 8.02, 8.03,
10.02 and 10.06, the obligations of each Subsidiary Guarantor so provided for
shall not be subject to any reduction, limitation, impairment or termination for
any reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Subsidiary Guarantor Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Subsidiary Guarantor if so provided shall not be discharged or impaired or
otherwise affected by the failure of any Holder or the Trustee to assert any
claim or demand or to enforce any remedy under this Indenture, such Series of
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the obligations, or by any other act or thing or omission or delay to do any
other act or thing which may or might in any manner or to any extent vary the
risk of such Subsidiary Guarantor or would otherwise operate as a discharge of
such Subsidiary Guarantor as a matter of law or equity.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, each Subsidiary Guarantor will further agree that its
Guarantee shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of principal of or interest on any
Subsidiary Guarantor Obligation is rescinded or must otherwise be restored by
any Holder or the Trustee upon the bankruptcy or reorganization of the Company
or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by
40
virtue hereof, if a Board Resolution, supplemental indenture hereto or
Officers' Certificate provides for a Subsidiary Guarantee with respect to a
particular Series of Securities, and upon the failure of the Company to pay
the principal of or interest on any Subsidiary Guarantor Obligation when and
as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, or to perform or comply with any other Subsidiary
Guarantor Obligation, each Subsidiary Guarantor will promise to and shall,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders or the Trustee an amount equal to the sum of (1)
the unpaid amount of such Subsidiary Guarantor Obligations, (2) accrued and
unpaid interest on such Subsidiary Guarantor Obligations (but only to the
extent not prohibited by law) and (3) all other monetary Subsidiary Guarantor
Obligations of the Company to the Holders and the Trustee.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, each Subsidiary Guarantor will agree that it shall not be
entitled to any right of subrogation in respect of any Subsidiary Guarantor
Obligations guaranteed hereby until payment in full of all Subsidiary Guarantor
Obligations and all obligations to which the Subsidiary Guarantor Obligations
are subordinated, as provided by the applicable Board Resolution, supplemental
indenture or Officers' Certificate. Each such Subsidiary Guarantor will further
agree that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the Subsidiary Guarantor Obligations
guaranteed hereby may be accelerated as provided in Article Six for the purposes
of such Subsidiary Guarantor's Subsidiary Guarantee herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Subsidiary Guarantor Obligations guaranteed hereby, and (y) in the event of
any declaration of acceleration of such Subsidiary Guarantor Obligations as
provided in Article Six, such Subsidiary Guarantor Obligations (whether or not
due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section 10.01.
If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, each Subsidiary Guarantor will also agree to pay any and
all costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Holder in enforcing any rights under this Section.
In addition to the requirement of a Board Resolution, supplemental
indenture or Officers' Certificate providing for the Subsidiary Guarantee with
respect to a particular Series of Securities, the Subsidiary Guarantee set forth
in this Section 10.01 shall not be valid or become obligatory for any purpose
with respect to such Series of Securities until the certificate of
authentication on such Securities shall have been signed by or on behalf of the
Trustee.
SECTION 10.02. Limitation on Liability. Any term or provision of this
Indenture to the contrary notwithstanding, the maximum aggregate amount of the
Subsidiary Guarantor Obligations to be guaranteed by any Subsidiary Guarantor
shall not exceed the maximum amount that can be guaranteed without rendering
this Indenture, as it relates to such Subsidiary Guarantor, or the applicable
Board Resolution, supplemental indenture or Officers' Certificate, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
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If a Board Resolution, supplemental indenture hereto or Officers'
Certificate provides for a Subsidiary Guarantee with respect to a particular
Series of Securities, each Subsidiary Guarantor that makes a payment under its
Subsidiary Guarantee will be entitled to a contribution from each other
Subsidiary Guarantor so providing a Subsidiary Guarantee with respect to such
Series of Securities in an amount equal to such other Subsidiary Guarantor's pro
rata portion of such payment based on the respective net assets of all the
Subsidiary Guarantors so providing a Subsidiary Guarantee with respect to such
Series of Securities at the time of such payment determined in accordance with
GAAP.
SECTION 10.03. Successors and Assigns. If a Board Resolution,
supplemental indenture hereto or Officers' Certificate provides for a Subsidiary
Guarantee with respect to a particular Series of Securities, this Article Ten
shall be binding upon each Subsidiary Guarantor so providing a Subsidiary
Guarantee with respect to such Series and its successors and assigns and shall
enure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in such Series of Securities shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
of this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article Ten shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article Ten at
law, in equity, by statute or otherwise.
SECTION 10.05. Modification. No modification, amendment or waiver of
any provision of this Article Ten, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case shall
entitle such Subsidiary Guarantor to any other or further notice or demand in
the same, similar or other circumstances.
SECTION 10.06. Release of Subsidiary Guarantor. Unless otherwise
specified in the applicable Board Resolution, supplemental indenture or
Officers' Certificate, providing for a Subsidiary Guarantee with respect to a
particular Series of Securities, upon the sale or other disposition (including
by way of consolidation or merger) of a Subsidiary Guarantor or the sale or
disposition of all or substantially all the assets of such Subsidiary Guarantor
(in each case other than a sale or disposition to the Company or an Affiliate of
the Company) or at such other time as specified in the applicable Board
Resolution, supplemental indenture or Officers' Certificate, such Subsidiary
Guarantor shall be deemed released from all obligations under this Article Ten
without any further action required on the part of the Trustee or any Holder. At
the request of the Company, the Trustee shall execute and deliver an appropriate
instrument evidencing such release.
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ARTICLE ELEVEN
MISCELLANEOUS
-------------
SECTION 11.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 11.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
If to the Company or any Subsidiary Guarantor:
Flowserve Corporation
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to the Trustee:
[ ]
The Company, any Subsidiary Guarantor or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
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, it is duly given,
whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA ss. 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, any Subsidiary
Guarantor, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss. 312(c).
43
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 11.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and the Paying Agent may make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, Sunday
or other day on which banking institutions in New York State are authorized or
required by law to close. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the
44
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 11.09. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION 11.10. No Recourse Against Others. A director, officer,
employee or shareholder, as such, of any Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or such Subsidiary Guarantor under its Subsidiary
Guarantee or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issuance of the Securities.
SECTION 11.11. Successors. All agreements of each Issuer in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple 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. One signed copy of the Indenture is
enough to prove this Indenture.
SECTION 11.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 11.14. Severability. If any provision in this Indenture is
deemed unenforceable, it shall not affect the validity or enforceability of any
other provision set forth herein, or of the Indenture as a whole.
[Signatures on following page]
45
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
FLOWSERVE CORPORATION
By:______________________________
Name:
Title:
FLOWSERVE US INC.
FLOWSERVE INTERNATIONAL, INC.
FLOWSERVE HOLDINGS, INC.
BW/IP-NEW MEXICO, INC.
INGERSOLL-DRESSER PUMP COMPANY
FLOWSERVE INTERNATIONAL L.L.C.
FLOWSERVE MANAGEMENT COMPANY
CFM-V.R. TESCO INC.
FLOWSERVE INTERNATIONAL LIMITED
FLOWSERVE FINANCE B.V.
By:______________________________
Name:
Title:
[ , as Trustee]
By:______________________________
Name:
Title:
