EXECUTION COPY
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COINSTAR, INC.
13% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2006
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INDENTURE
Dated as of October 1, 1996
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The Bank of New York
Trustee
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CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
311 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
312 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.05
(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03
313 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;7.07
(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06;11.02
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.06
314 (a). . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.03;11.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.21
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(d). . . . . . . . . . . . . . . . . . . . . . . . . . . .11.03;11.04;11.05
(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) . . . . . . . . . . . . . . . . . . . . 2.09
(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.07
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.12
317 (a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . 6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.04
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 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitions. . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.03. Incorporation by Reference of Trust Indenture Act. . . . . . . 12
Section 1.04. Rules of Construction. . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.02. Execution and Authentication . . . . . . . . . . . . . . . . . 14
Section 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . 14
Section 2.04. Paying Agent to Hold Money in Trust. . . . . . . . . . . . . . 15
Section 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.06. Transfer and Exchange. . . . . . . . . . . . . . . . . . . . . 15
Section 2.07. Replacement Notes. . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.08. Outstanding Notes. . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.09. Treasury Notes . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.10. Temporary . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.12. Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.13. CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.02. Selection of Notes to Be Redeemed. . . . . . . . . . . . . . . 23
Section 3.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . 23
Section 3.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . 24
Section 3.05. Deposit of Redemption Price. . . . . . . . . . . . . . . . . . 24
Section 3.06. Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . 25
Section 3.07. Optional Redemption. . . . . . . . . . . . . . . . . . . . . . 25
Section 3.08. Mandatory Redemption . . . . . . . . . . . . . . . . . . . . . 26
Section 3.09. Offer to Purchase by Application of Excess Proceeds. . . . . . 26
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.02. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 28
Section 4.03. Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 4.04. Compliance Certificate . . . . . . . . . . . . . . . . . . . . 29
Section 4.05. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.06. Stay, Extension and Usury Laws . . . . . . . . . . . . . . . . 30
Section 4.07. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . 30
Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries 32
Section 4.09. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . 32
Section 4.10. Asset Sales. . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 4.11. Transactions with Affiliates . . . . . . . . . . . . . . . . . 34
Section 4.12. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . 34
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Section 4.13. Offer to Repurchase Upon Change of Control . . . . . . . . . . 35
Section 4.14. No Senior Subordinated Debt. . . . . . . . . . . . . . . . . . 36
Section 4.15. Designation of Restricted and Unrestricted Subsidiaries. . . . 36
Section 4.16. Asset Maintenance Test.. . . . . . . . . . . . . . . . . . . . 37
Section 4.17. Limitation on Changes in Capital Structure . . . . . . . . . . 38
Section 4.18. Contingent Warrants. . . . . . . . . . . . . . . . . . . . . . 38
Section 4.19. Calculation of Original Issue Discount . . . . . . . . . . . . 38
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets . . . . . . . . . . . 38
Section 5.02. Successor Corporation Substituted. . . . . . . . . . . . . . . 39
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.02. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.03. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.04. Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . 42
Section 6.05. Control by Majority. . . . . . . . . . . . . . . . . . . . . . 42
Section 6.06. Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . 43
Section 6.07. Rights of Holders of Notes to Receive Payment. . . . . . . . . 43
Section 6.08. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . 43
Section 6.09. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . 44
Section 6.10. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 6.11. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.02. Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . 46
Section 7.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . 47
Section 7.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.06. Reports by Trustee to Holders of the Notes . . . . . . . . . . 47
Section 7.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . 47
Section 7.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . 48
Section 7.09. Successor Trustee by Xxxxxx, etc . . . . . . . . . . . . . . . 49
Section 7.10. Eligibility; Disqualification. . . . . . . . . . . . . . . . . 49
Section 7.11. Preferential Collection of Claims Against The Company. . . . . 50
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance . . . 50
Section 8.02. Legal Defeasance and Discharge . . . . . . . . . . . . . . . . 50
Section 8.03. Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . 50
Section 8.04. Conditions to Legal or Covenant Defeasance . . . . . . . . . . 51
Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.. . . . . . . . . . . . . . . . 52
Section 8.06. Repayment to Company . . . . . . . . . . . . . . . . . . . . . 53
Section 8.07. Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . 53
ii
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes. . . . . . . . . . . . . . 54
Section 9.02. With Consent of Holders of Notes . . . . . . . . . . . . . . . 54
Section 9.03. Compliance with Trust Indenture Act. . . . . . . . . . . . . . 56
Section 9.04. Revocation and Effect of Consents. . . . . . . . . . . . . . . 56
Section 9.05. Notation on or Exchange of Notes . . . . . . . . . . . . . . . 56
Section 9.06. Trustee to Sign Amendments, etc. . . . . . . . . . . . . . . . 56
ARTICLE 10
SUBORDINATION
Section 10.01 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . 57
Section 10.02 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . 57
Section 10.03 Default on Designated Senior Debt. . . . . . . . . . . . . . . 57
Section 10.04 Acceleration of Notes. . . . . . . . . . . . . . . . . . . . . 58
Section 10.05 When Distribution Must be Paid Over. . . . . . . . . . . . . . 58
Section 10.06 Notice by Company. . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.07 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.08 Relative Rights. . . . . . . . . . . . . . . . . . . . . . . . 60
Section 10.09 Subordination May Not Be Impaired by Company . . . . . . . . . 60
Section 10.10 Distribution or Notice to Representative . . . . . . . . . . . 60
Section 10.11 Rights of Trustee and Paying Agent . . . . . . . . . . . . . . 61
Section 10.12 Authorization to Effect Subordination. . . . . . . . . . . . . 61
Section 10.13 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 11
MISCELLANEOUS
Section 11.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . 61
Section 11.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.03 Communication by Holders of Notes with Other Holders of Notes. 63
Section 11.04 Certificate and Opinion as to Conditions Precedent . . . . . . 63
Section 11.05 Statements Required in Certificate or Opinion. . . . . . . . . 63
Section 11.06 Rules by Xxxxxxx and Agents. . . . . . . . . . . . . . . . . . 64
Section 11.07 No Personal Liability of Directors, Officers, Employees,
Partners and Stockholders. . . . . . . . . . . . . . . . . . . 64
Section 11.08 Governing Law; Consent to Jurisdiction . . . . . . . . . . . . 64
Section 11.09 No Adverse Interpretation of Other Agreements. . . . . . . . . 65
Section 11.10 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.12 Counterpart Originals. . . . . . . . . . . . . . . . . . . . . 65
Section 11.13 Table of Contents, Headings, etc . . . . . . . . . . . . . . . 65
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B CERTIFICATE OF TRANSFEROR
Exhibit C
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INDENTURE dated as of October 22, 1996 between Coinstar, Inc., a
Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation, 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 13% Senior
Subordinated Discount Notes due 2006 (the "Original Notes") and the 13% Senior
Subordinated Discount Notes due 2006 to be issued to Holders pursuant to the
Exchange Offer (the "New Notes" and, together with the Original Notes, the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ACCRETED VALUE" means, with respect to any Note, as of any date of
determination prior to the Full Accretion Date, the sum of (i) the initial
offering price of such Note and (ii) the portion of the excess of the principal
amount of each Note over such initial offering price that shall have been
accreted thereon through such date, such amount to be so accreted on a daily
basis at the rate of 13% per annum of the initial offering price of such Note,
compounded semi-annually on each October 1 and April 1 from the Issue Date of
the Notes through the date of determination; PROVIDED that on and after the Full
Accretion Date, the Accreted Value shall be equal to the principal amount of
such Note.
"ACQUIRED DEBT" means, with respect to any specified Person: (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person; and (ii) Indebtedness
encumbering any asset acquired by such specified Person.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING," "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control and, PROVIDED, FURTHER, that the Principal shall be
deemed an Affiliate of the Company so long as the Principal directly or
indirectly owns at least 3% of the Equity Interests of the Company and Xx. Xxxxx
Xxxxx and any Person of which at least 5% of the Equity Interests of such Person
is directly or indirectly owned by Xx. Xxxxx or any Affiliate of Xx. Xxxxx shall
be deemed an affiliate of the Company so long as Xx. Xxxxx or any affiliate of
Xx. Xxxxx is a member of the Board of Directors of the Company or directly or
indirectly owns at least 3% of the Equity Interests of the Company.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"BANKRUPTCY CUSTODIAN" means any receiver, trustee, assignee,
liquidator or similar officer under any Bankruptcy Law.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law, as amended from time to time, and applicable to the relevant case,
providing for the relief of debtors.
"BOARD OF DIRECTORS" means the board of directors of the Company, or
any authorized committee of such board of directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"CAPITAL STOCK" means: (i) in the case of a corporation, corporate
stock; (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock; (iii) in the case of a partnership or limited
liability company, partnership interests (whether general or limited) or other
membership interests; and (iv) any other interest or participation that confers
on a Person the right to receive a share of the profits and losses of, or
distributions of assets of (other than any such distributions in respect of
Indebtedness), the issuing Person.
"CASH EQUIVALENTS" means: (i) United States dollars; (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than twelve months from the date of acquisition; (iii) certificates of
deposit and eurodollar time deposits with maturities of twelve months from the
date of acquisition by the Company thereof or less from the date of
acquisition, bankers' acceptances with maturities not exceeding twelve months
and overnight bank deposits, in each case with any domestic commercial bank
having combined capital and surplus in excess of $500 million and a Thomson
Bank Watch Rating of "B" or better; (iv) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) above entered into with any financial institution
meeting the qualifications specified in clause (iii) above; (v) commercial
paper having a rating of at least P-1 from Xxxxx'x or a rating of at least A-1
from Standard & Poor's on the date of acquisition by the Company thereof; (vi)
auction-rate preferred stocks of any corporation maturing within 49 days after
the date of acquisition by the Company thereof, having a rating of at least
AAA by Standard & Poor's or a rating of at least aaa from Xxxxx'x on the date
of such acquisition; (vii) debt obligations of any corporation maturing within
twelve months after the date of acquisition by the Company thereof, having a
rating of at least P-1 or aaa from Xxxxx'x or A-1 or AAA from Standard &
Poor's on the date of such acquisition; and (viii) mutual funds and money
market accounts investing 100% of the funds under management in instruments of
the types described in clauses (i) through (v) above and, in each case,
maturing within the period specified above for such instrument after the date
of acquisition by the Company thereof.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" or "group" (within the meanings of Sections 13(d)(3) and
14(d)(2), respectively, of the Exchange Act) other than (y) the holders of the
Company's Capital Stock as of the date of this Indenture, or (z) the Principal
or any Related Party, (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company and (iii) the consummation of any transaction
(including any merger or consolidation) the result of which is that any "person"
or "group" (as defined above), other than (y) the holders of the Company's
Capital Stock as of the date of this Indenture, or (z) the Principal and any
Related Party, becomes the "beneficial owner" (as such term is defined in Rules
13(d)-3 and 13(d)-5 of the Exchange Act) directly or indirectly, of more than
50% of the Voting Stock of the Company or (iv) during
any consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election to such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSOLIDATED ANNUALIZED EBITDA" means, with respect to any Person,
such Person's Consolidated EBITDA for the most recently completed full fiscal
quarter for which internal financial statements are available ending not more
than 135 days prior to the transaction or event giving rise to the need to
calculate Consolidated Annualized EBITDA, multiplied by four.
"CONSOLIDATED EBITDA" means, with respect to any Person for any
period, the sum (without duplication) of (i) Consolidated Net Income of such
Person for such period; PLUS, (ii) to the extent that any of the following shall
have been included in determining such Consolidated Net Income, (A) an amount
equal to any extraordinary loss plus any net loss realized in connection with an
Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), (B) all income taxes for such Person and its
Restricted Subsidiaries paid or accrued in accordance with GAAP for such period
(other than income taxes attributable to extraordinary, unusual or nonrecurring
gains or losses or taxes attributable to sales or distributions of assets
outside the ordinary course of business), (C) Consolidated Interest Expense of
such Person and its Restricted Subsidiaries for such period and (D)
depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period); LESS (iii)(A) all non-cash items of such Person or any of
its Restricted Subsidiaries increasing such Consolidated Net Income for such
period and (B) all cash payments during such period relating to non-cash items
that were added back in determining Consolidated EBITDA in any prior period.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person, for any
period, the sum of: (i) the amount of interest in respect of Indebtedness
(including amortization of original issue discount, fees payable in connection
with financings, including commitment, availability and similar fees, and
amortization of debt issuance costs, capitalized interest, non-cash interest
payments on any Indebtedness and the interest portion of any deferred payment
obligation and after taking into account the effect of elections made under, and
the net costs associated with, any Interest Rate Agreement, however denominated,
with respect to such Indebtedness); (ii) the amount of Redeemable Dividends of
such Person; (iii) the amount of Preferred Equity dividends in respect of all
Preferred Equity of Restricted Subsidiaries held by Persons other than the
referent Person or a Restricted Subsidiary thereof, commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing; and (iv) the interest component of rentals in respect of
any Capital Lease Obligation, in each case, that was paid, accrued or scheduled
to be paid or accrued by such Person during such period, determined on a
consolidated basis in accordance with GAAP. For purposes of this definition,
interest on a Capital Lease Obligation will be deemed to accrue at an interest
rate reasonably determined by the referent Person to be the rate of interest
implicit in such Capital Lease Obligation in accordance with GAAP consistently
applied.
3
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded, and (iv) the cumulative effect of a change in accounting principles
shall be excluded.
"CONSOLIDATED TOTAL INDEBTEDNESS" means the sum (without duplication)
of (i) the total amount of Indebtedness and the aggregate liquidation value of
all Disqualified Capital Stock of such Person plus all Indebtedness and the
aggregate liquidation value of all Preferred Equity of its Restricted
Subsidiaries, all as shown on a consolidated balance sheet of such Person, plus
(ii) the total amount of Indebtedness shown on the balance sheet of the primary
obligor on such Indebtedness, to the extent that such Indebtedness has been
guaranteed by such Person or one of its Restricted Subsidiaries. The
Indebtedness of the Company and its Restricted Subsidiaries shall not include
any Indebtedness of Unrestricted Subsidiaries so long as such Indebtedness is
Non-Recourse Debt.
"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.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any of its Subsidiaries against fluctuation in the values of the
currencies of the countries (other than the United States) in which the Company
does business.
"CUSTODIAN OR NOTE CUSTODIAN" means the Trustee, as custodian with
respect to the Notes in global form, or any successor entity thereto.
"DEBT TO CASH FLOW RATIO" means, as to any Person, for any period of
determination, the ratio of (i) the Consolidated Total Indebtedness of such
Person as of the date of calculation to (ii) the Consolidated Annualized EBITDA
of such Person.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereof.
"DEPOSITORY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depository with respect to the Notes, until a
4
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depository" shall mean or include
such successor.
"DESIGNATED SENIOR DEBT" means Senior Debt of the Company that is
permitted under Section 4.09(iv) hereof and that has been designated by the
Company as "Designated Senior Debt."
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock to the extent
that, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the Holder thereof, in whole or in part, on or
prior to the Stated Maturity of the Notes.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $500 million or its equivalent in
foreign currency, whose debt (or the debt of whose holding company) is rated "A"
(or higher) according to Standard and Poor's or "A2" (or higher) by Moody's at
the time as of which any investment or rollover therein is made.
"EQUITY INTERESTS" means, collectively, Capital Stock and all
warrants, options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXCHANGE OFFER" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange New Notes for Original
Notes.
"EXECUTIVE OFFICER" means, for any Person, the chief financial
officer, chief operating officer or chief executive officer of such Person.
"FAIR MARKET VALUE" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and a willing buyer
under no compulsion to buy.
"FULL ACCRETION DATE" means October 1, 1999.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"GLOBAL NOTE" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
the Note attached hereto as Exhibit A.
5
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
fully guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means (without duplication), with respect to any
Person, any indebtedness, secured or unsecured, contingent or otherwise, that is
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets of such Person or only to a portion thereof), or evidenced by bonds,
notes, debentures or similar instruments or representing the balance deferred
and unpaid of the purchase price of any property (excluding any such balance
that constitutes an accrued expense or trade payable) if and to the extent any
of the foregoing indebtedness would appear as a liability upon a balance sheet
of such Person prepared in accordance with GAAP, and shall also include, to the
extent not otherwise included: (i) any Capital Lease Obligations; (ii)
Indebtedness of any other Person secured by a Lien to which the property or
assets owned or held by the referent Person is subject, whether or not the
obligation or obligations secured thereby shall have been assumed (the amount of
such Indebtedness being deemed to be the lesser of the value of such property or
assets or the amount of the Indebtedness so secured); (iii) Guarantees by such
Person of Indebtedness of any other Person; (iv) the aggregate liquidation
preference of any Disqualified Capital Stock; (v) all obligations of such Person
in respect of letters of credit, bankers' acceptance or other similar
instruments or credit transactions (including reimbursement obligations with
respect thereto); and (vi) any Hedging Obligation of such Person applicable to
any of the foregoing. In no event shall "Indebtedness" be deemed to include
trade credit or credit on open account for which payment is not overdue by more
than 60 days or endorsements for deposit in the ordinary course of business.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT APPRAISER" means an investment banking firm of national
standing with non-investment grade debt underwriting experience or any third
party appraiser of national standing; PROVIDED, HOWEVER, that such firm or
appraiser is not an Affiliate of the Company.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
6
"ISSUE DATE" means the date on which the Notes are initially issued.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction), but
excluding any such filings in respect of operating leases or similar notice or
precautionary filings relating to transactions or arrangements that do not give
rise to Indebtedness.
"LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant
to Section 5 of the Notes Registration Rights Agreement.
"MATERIAL RESTRICTED SUBSIDIARY" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date of this Indenture.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor to
the rating agency business thereof.
"NET INCOME" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Equity dividends, excluding, however, any extraordinary
gain (or loss), together with any related provision for taxes on such
extraordinary gain (or loss).
"NET PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, sales commissions
and legal, accounting and investment banking fees) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"NEW NOTES" has the meaning ascribed to such term in the preamble
hereto.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or
7
otherwise) or (c) constitutes the lender; and (ii) as to which the lenders have
been notified in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"NOTES REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement with respect to the Notes issued hereby, dated as of October 22, 1996,
by and among the Company and the other parties named on the signature pages
thereof, as such agreement may be amended, modified or supplemented from time to
time.
"NOTES" has the meaning ascribed to such term in the preamble hereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFERING" means the Offering of the Notes by the Company.
"OFFERING MEMORANDUM" means the Offering Memorandum of the Company,
dated October 22, 1996, with respect to the Notes.
"OFFICER" means the President, Chief Executive Officer, Chief
Financial Officer, Treasurer or any Executive Vice President or Vice President
of the Company.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company that meets the
requirements of Section 11.05 hereof.
"OPINION OF COUNSEL" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company or
the Trustee.
"ORIGINAL DIRECTOR" has the meaning ascribed to such term in the
definition of "Continuing Director" contained herein.
"ORIGINAL NOTES" has the meaning ascribed to such term in the preamble
hereto.
"PERMITTED INVESTMENTS" means any of the following: (i) Investments
in cash and Cash Equivalents; (ii) Investments by the Company or by any
Restricted Subsidiary in any Person that is or will become immediately after
such Investment a Restricted Subsidiary; (iii) any Investments in the Company or
in a wholly owned Restricted Subsidiary of the Company; (iv) Investments
existing on the Issue Date; (v) accounts receivable created or acquired in the
ordinary course of business of the Company or any Restricted Subsidiary and on
ordinary business terms; (vi) Investments arising from transactions by the
Company or any Restricted Subsidiaries with trade creditors or customers in the
ordinary course of business; (vii) Investments made as the result of non-cash
consideration received from an Asset Sale; and (viii) additional Investments in
Unrestricted Subsidiaries, joint ventures or similar business entities not
8
exceeding $10 million PLUS the net proceeds received by the Company from
issuance of Capital Stock since the Issue Date (other than from the issuance of
Disqualified Capital Stock).
"PERMITTED REFINANCING DEBT" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Restricted Subsidiaries; PROVIDED
that: (i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Debt does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (ii) such Permitted Refinancing Debt has a period
until its final maturity date no shorter than the final maturity date of, and
has a Weighted Average Life to Maturity no shorter than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Debt has a final maturity date
on or later than the final maturity date of, and is subordinated in right of
payment to, such Notes on terms at least as favorable to the Holders of such
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or the Restricted Subsidiary that
was the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded.
"PERSON" means any individual, corporation, company (including limited
liability company), partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof (including any subdivision or ongoing business of
any such entity or substantially all of the assets of any such entity,
subdivision or business).
"PREFERRED EQUITY" means any Capital Stock of a Person, however
designated, that entitles the holder thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Capital Stock issued by such Person.
"PRINCIPAL" means Xx. Xxxx X. Xxxxxx.
"PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other Person (but excluding Capital Stock or other securities issued by such
Person).
"PUBLIC EQUITY OFFERING" means the consummation of an offering of
Equity Interests (other than Disqualified Capital Stock) by the Company to the
public pursuant to a registration statement filed with the SEC, the aggregate
gross proceeds of which exceed $25 million.
"PUBLIC MARKET" means the condition that exists at any time after a
Public Equity Offering has been consummated and at least 20% of the Company's
Capital Stock (i) has been distributed pursuant to an effective registration
statement under the Securities Act or (ii) is saleable pursuant to Rule 144
promulgated under the Securities Act.
"RELATED PARTY" means, with respect to any Principal, (i) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such
9
Principal or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (i).
"REPRESENTATIVE" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means
any officer within the corporate trust department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
not designated to be an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SENIOR DEBT" means any Indebtedness that is permitted to be
incurred by the Company pursuant to this Indenture unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a parity
with or subordinated in right of payment to the Notes. Notwithstanding
anything to the contrary in the foregoing, Senior Debt shall not include (x)
any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates, (y) any obligations incurred for the purchase of goods or
materials or for services obtained in the ordinary course of business, other
than obligations constituting Indebtedness (except Indebtedness arising from
trade credit or credit on open account), and (z) any Indebtedness that is
incurred in violation of this Indenture.
"STANDARD AND POOR'S" means Standard and Poor's Rating Group, a
division of McGraw Hill Inc., and any successor to the rating agency business
thereof.
"STATED MATURITY" means October 1, 2006.
"SUBSIDIARY," with respect to any Person, means (i) any corporation, a
majority of whose voting stock (defined as any class or classes of capital stock
having voting power under ordinary circumstances to elect a majority of the
Board of Directors) is owned, directly or indirectly, by the Company, by one or
more of its Subsidiaries, or by the Company and one or more of its Subsidiaries
and (ii) any other Person (other than a corporation) in which the Company, one
or more of its Subsidiaries, or the Company and one or more Subsidiaries,
directly or indirectly, has at least a majority ownership interest entitled to
vote in the election of directors, managers or trustees thereof. As of the
Issue Date, the Company as no Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.03 hereof.
10
"TOTAL GROSS ASSETS" means, as of any date of determination, the total
assets of the Company plus total accumulated depreciation on Coinstar units,
computer and information systems and office equipment, less (i) all goodwill,
trade names, patents and any other intangibles and (ii) any assets of, or Equity
Interests in, any Subsidiary of the Company or any Investment in any other
Person, all as would be set forth on a balance sheet of the Company on an
unconsolidated basis as of such date of determination in accordance with GAAP;
PROVIDED, HOWEVER, that Total Gross Assets shall not include (x) for any date of
determination prior to January 1, 1999, any of the Company's Coinstar units
which the Company acquired, or any capital expenditure invested in Coinstar
units expended or incurred, more than five years prior to the date of
determination; (y) for any date of determination from and after January 1, 1999,
any of the Company's Coinstar units that the Company acquired, or any capital
expenditure invested in Coinstar units expended or incurred, more than seven
years prior to the date of determination; and (z) any Coinstar unit (or any
portion of the revenue from any such unit) that has been (1) pledged or
encumbered to secure obligations of any Person other than the Company or (2)
leased, assigned or is otherwise subject to a transaction such that as a result
of such lease, assignment or other transaction any other Person shall be
entitled on a non-contingent basis to receive directly all or a portion of the
revenue generated by such Coinstar unit.
"TRANSFER RESTRICTED SECURITIES" means securities that bear or are
required to bear the legend set forth in Section 2.06(g) hereof.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors, but only to the extent that such
Subsidiary: (i) has no Indebtedness other than Non-Recourse Debt; (ii) is not
party to any agreement, contract, arrangement or understanding with the Company
or any Restricted Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding comply with the provisions of
Section 4.11 hereof; (iii) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (iv) has not Guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries; and (v) in the case of a Subsidiary that is a
corporation, such Subsidiary has at least one director on its board of directors
that is not a director or Executive Officer of the Company or any of its
Restricted Subsidiaries. Any such designation by the Board of Directors shall
be evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.15 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter be deemed a Restricted Subsidiary
for all purposes of this Indenture, including that any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such Section).
11
"VOTING STOCK" means, with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction". . . . . . . . . . . . 4.11
"Asset Sale" . . . . . . . . . . . . . . . . . 4.10
"Asset Sale Offer" . . . . . . . . . . . . . . 3.09
"Asset Sale Offer Purchase Date" . . . . . . . 3.09
"Asset Sale Offer Trigger Date". . . . . . . . 4.10
"Change of Control Offer". . . . . . . . . . . 4.13
"Change of Control Offer Purchase Price" . . . 4.13
"Change of Control Payment Date" . . . . . . . 4.13
"Contingent Warrants". . . . . . . . . . . . . 4.18
"Covenant Defeasance". . . . . . . . . . . . . 8.03
"DTC". . . . . . . . . . . . . . . . . . . . . 2.03
"Event of Default" . . . . . . . . . . . . . . 6.01
"Excess Proceeds". . . . . . . . . . . . . . . 4.10
"incur". . . . . . . . . . . . . . . . . . . . 4.09
"Legal Defeasance" . . . . . . . . . . . . . . 8.02
"Offer Amount" . . . . . . . . . . . . . . . . 3.09
"Offer Period" . . . . . . . . . . . . . . . . 3.09
"Paying Agent" . . . . . . . . . . . . . . . . 2.03
"Payment Blockage Notice". . . . . . . . . . . 10.03
"Registrar". . . . . . . . . . . . . . . . . . 2.03
"Restricted Payment" . . . . . . . . . . . . . 4.07
"Surviving Person" . . . . . . . . . . . . . . 5.01
"Warrant Agreement". . . . . . . . . . . . . . 4.18
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
12
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee;
"OBLIGOR" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A hereto. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes shall be issued
in minimum denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
13
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto). Each Global Note shall represent such principal
amount at maturity of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount at
maturity of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount at maturity of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Note to reflect the
amount of any increase or decrease in the principal amount at maturity of
outstanding Notes represented thereby shall be made by the Trustee or the Note
Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers of the Company shall sign the Notes, by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that office
at the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall, upon a written order of the Company signed by an
Officer of the Company, authenticate Notes for original issue up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed such amount
except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Notes may be presented for payment ("PAYING AGENT"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall
notify the Trustee in writing of the name and address of any Agent not a party
to this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company or any
of its Subsidiaries may act as Paying Agent or Registrar.
14
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary
thereof) shall have no further liability for the money. If the Company or a
Subsidiary thereof acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon the commencement of any proceedings under Bankruptcy Law by
or against the Company, or the appointment of any Bankruptcy Custodian for the
Company for all or substantially all of its assets, the Trustee shall serve as
Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; PROVIDED, HOWEVER, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
15
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Xxxxxx or by his
attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied
by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from such
Holder (in substantially the form of Exhibit B
hereto); or
(B) if such Transfer Restricted Security is being
transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration
in accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from
the registration requirements of the Securities
Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B
hereto) and an Opinion of Counsel from such Holder
or the transferee reasonably acceptable to the
Company and to the Registrar to the effect that
such transfer is in compliance with the Securities
Act.
(b) TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN A
GLOBAL NOTE. A Definitive Note may not be exchanged for a
beneficial interest in a Global Note except upon satisfaction of
the requirements set forth below. Upon receipt by the Trustee of
a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Definitive Note is
being transferred by such Holder to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the Global
Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of Notes
16
represented by the Global Note to be increased accordingly. If no Global Notes
are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the Trustee shall
authenticate, a new Global Note in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a
Definitive Note. Upon receipt by the Trustee of written
instructions or such other form of instructions as is
customary for the Depository, from the Depository or its
nominee on behalf of any Person having a beneficial interest
in a Global Note, and, in the case of a Transfer Restricted
Security, the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred
to the Person designated by the Depository as
being the beneficial owner, a certification to
that effect from such Person (in substantially the
form of Exhibit B hereto); or
(B) if such beneficial interest is being transferred
to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act
or pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities Act, a
certification to that effect from the transferor
(in substantially the form of Exhibit B hereto);
or
(C) if such beneficial interest is being transferred
in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor
(in substantially the form of Exhibit B hereto)
and an Opinion of Counsel from the transferee or
transferor reasonably acceptable to the Company
and to the Registrar to the effect that such
transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute
and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and
deliver to the transferee a Definitive Note in the
appropriate principal amount.
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(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.06(d)
shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes
are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Xxxxxxxxxx or
a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF DEPOSITORY. If
at any time:
(i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository
for the Global Notes and a successor Depository for the
Global Notes is not appointed by the Company within 90 days
after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive
Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) LEGENDS.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Note certificate evidencing Global Notes and
Definitive Notes (and all Notes issued in exchange therefor
or substitution thereof) shall bear legends in substantially
the following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT.
THE HOLDER OF THE NOTE EVIDENCED XXXXXX AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (A) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
18
RULE 144A, (B) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (D) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
"FOR PURPOSES OF SECTION 1272, 1273 AND 1275 OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY
IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH
$1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE
IS $679.89, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS
$320.11, THE ISSUE DATE IS OCTOBER 22, 1996 AND THE YIELD
TO MATURITY IS 13.2139% PER ANNUM."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the
Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the
first legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the first legend
set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.06(c) hereof;
PROVIDED, HOWEVER, that with respect to any request for
an exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the first legend set forth in (i) above,
which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the
form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon
receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate New
Notes in exchange for Original
19
Notes accepted for exchange in the Exchange Offer,
which New Notes shall not bear the legend set forth in
(i) above, and the Registrar shall rescind any
restriction on the transfer of such Notes, in each case
unless the Holder of such Original Notes is either (A)
a broker-dealer, (B) a Person participating in the
distribution of the Original Notes or (C) a Person who
is an affiliate (as defined in Rule 144A) of the
Company.
(h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10,
4.13 and 9.05 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for
redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations of
the Company, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the
opening of business 15 days before the day of any
selection of Notes for redemption under Section
3.02 hereof and ending at the close of business on
the day of selection; or
(B) to register the transfer of or to exchange any
Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note
being redeemed in part; or
20
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding
interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name
any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of
principal of and interest on such Notes, and neither
the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee or the Company, or
if the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon the written
order of the Company signed by two Officers thereof, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate thereof
holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If any portion of principal amount of any Note is considered paid
under Section 4.01 hereof, such portion ceases to be outstanding and interest on
it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes (or portions thereof) payable on that date, then on and
after that date such Notes (or such portions) shall be deemed to be no longer
outstanding and shall cease to accrue interest.
21
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Affiliate of the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes in exchange for
temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee and no one else shall cancel all Notes surrendered for registration
of transfer, exchange, payment, replacement or cancellation and shall retain
cancelled Notes or return them to the Company at the written request of the
Company. The Company may not issue, and the Trustee may not authenticate, new
Notes to replace Notes that the Company has paid or that have been delivered to
the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee
in writing of the amount of defaulted interest proposed to be paid on each Note
and the date of the proposed payment. The Company shall fix or cause to be
fixed each such special record date and payment date, PROVIDED that no such
special record date shall be less than 10 days prior to the related payment date
for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the
name and at the expense of the Company) shall mail or cause to be mailed to
Holders a notice that states the special record date, the related payment date
and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBERS.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders; PROVIDED
22
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
PRO RATA basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; PROVIDED that no Notes of $1,000 or less will be
redeemed in part. In the event that less than all of the Notes are to be
redeemed by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 30 nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address. Failure to receive such
notice or any defect in the notice to any such Holder shall not affect the
validity of the proceedings for the redemption of any other Notes or portion
thereof.
23
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed portion shall be
issued upon cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption shall cease to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on
the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days (unless the
Trustee and the Company agree to a shorter period) prior to the redemption date,
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, through the redemption date. A notice of
redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
No later than one Business Day prior to the redemption date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption price of and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed on that date. The Trustee or the Paying Agent
shall promptly return to the Company any money deposited with the Trustee or the
Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and any accrued interest and Liquidated Damages on, all
Notes to be redeemed.
24
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest and Liquidated Damages, if
any, shall be paid to the Person in whose name such Note was registered at the
close of business on such record date. If any Note called for redemption shall
not be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall accrue on the
principal portion of the redemption price, 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 Note and in Section
4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) of this Section 3.07, the
Company shall not have the option to redeem the Notes pursuant to this Section
3.07 prior to October 1, 2001. On and after October 1, 2001, the Company
shall have the option to redeem the Notes, in whole or in part, upon not less
than 30 nor more than 60 days' written notice, at the following respective
redemption prices (expressed as percentages of principal amount), plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to the date of
repurchase, during the twelve-month period commencing October 1 of each of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2001 . . . . . . . . . . . . . . . . . . . . 108.000%
2002 . . . . . . . . . . . . . . . . . . . . 105.333%
2003 . . . . . . . . . . . . . . . . . . . . 102.667%
2004 and thereafter. . . . . . . . . . . . . 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section
3.07, in the event that the Company consummates a Public Equity Offering after
which there is a Public Market, the Company may redeem at its option from the
proceeds thereof at any time prior to October 1, 1999 up to 100% of the
aggregate principal amount of Notes originally issued at a redemption price
equal to 118.00% of the Accreted Value thereof, plus accrued and unpaid
Liquidated Damages, if any, to the date of redemption; PROVIDED, HOWEVER, that
such redemption occurs within 60 days after the date of the completion of such
Public Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
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SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.13 hereof, the Company
shall not be required to make mandatory redemption payments or sinking fund
payments with respect to the Notes.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall
be required to commence an offer to all Holders to purchase Notes (an "ASSET
SALE OFFER"), it shall follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and shall remain
open for a period of 20 Business Days following its commencement and no longer,
except to the extent that a longer period is required by applicable law (the
"OFFER PERIOD"). No later than five Business Days after the termination of the
Offer Period (the "ASSET SALE OFFER PURCHASE DATE"), the Company shall purchase
the principal amount of Notes required to be purchased pursuant to Section 4.10
hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been tendered,
all Notes tendered in response to the Asset Sale Offer. Payment for any Notes
so purchased shall be made in the same manner as interest payments are made.
If the Asset Sale Offer Purchase Date is on or after an interest
record date and on or before the related interest payment date, accrued and
unpaid interest and Liquidated Damages thereon, if any, shall be paid to the
Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Within 10 days following any Asset Sale Offer Trigger Date, the
Company shall send, by first class mail, a notice to each of the Holders at such
Holder's registered address, with a copy to the Trustee. The notice, which
shall govern the terms of the Asset Sale Offer, shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer, and shall state:
(a) that the Asset Sale Offer Trigger Date has occurred pursuant
to Section 4.10 hereof and the length of time the Asset Sale Offer shall
remain open;
(b) the Offer Amount, the purchase price and Asset Sale Offer
Purchase Date;
(c) that any Note subject to the Asset Sale Offer not tendered
shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in the payment of the
purchase price for the Notes payable pursuant to the Asset Sale Offer, any
such Notes accepted for payment pursuant to the Asset Sale Offer shall
cease to accrete or accrue interest on the Asset Sale Offer Purchase Date;
(e) that any Holder electing to have a Note purchased pursuant
to an Asset Sale Offer may only elect to have all of such Note purchased
and may not elect to have only a portion of such Note purchased;
26
(f) that any Holder electing to have a Note purchased pursuant
to any Asset Sale Offer shall be required, in the case of a Definitive
Note, to surrender such Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, or, in the case of an
interest in a Global Note, to transfer such interest by book-entry transfer
to the Company, a depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before the
Purchase Date;
(g) that any Holder shall be entitled to withdraw its election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that
such Xxxxxx is withdrawing its election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount or less than all of the Notes tendered
pursuant to the Asset Sale Offer are accepted for payment by the Company
for any reason consistent with this Indenture, the Trustee shall select the
Notes to be purchased in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are listed or, if
the Notes are not so listed, on a pro rata basis, by lot or by such method
as the Trustee deems fair and appropriate; PROVIDED that Notes accepted for
payment in part will only be purchased in integral multiples of $1,000; and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On the Asset Sale Offer Purchase Date, the Company shall: (i) accept
for payment the Notes (or portions thereof selected by the Trustee pursuant to
clause (h) of this Section 3.09); (ii) deposit with the Paying Agent the
aggregate purchase price of all Notes or portions thereof accepted for payment;
and (iii) deliver or cause to be delivered to the Trustee all Notes tendered
pursuant to the Asset Sale Offer. The Company, the depository or the Paying
Agent, as the case may be, shall promptly mail to each Holder of Notes or
portions thereof accepted for payment an amount equal to the purchase price for
such Notes and the Trustee shall promptly authenticate and mail to any such
Holder of Notes accepted for payment in part a new Note equal in principal
amount to any unpurchased portion of the Notes, and any Note not accepted for
payment in whole or in part shall be promptly returned to the Holder of such
Note. The Company shall announce the results of the Asset Sale Offer to Holders
of the Notes on or as soon as practicable after the Asset Sale Offer Purchase
Date. The Company shall comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act, and any other securities laws or
regulations, in connection with any Asset Sale Offer.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
27
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of, premium,
if any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Notes Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1.0% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company shall furnish to the Trustee
and to all Holders of Notes: (i) for so long as the Company is not subject to
the reporting requirements of the Exchange Act, all quarterly and annual
financial information that would be required to be contained in a filing with
the SEC on Forms 10-Q and
28
10-K if the Company were required to file such forms and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants; and (ii) once the Company becomes subject to the reporting
requirements of the Exchange Act, all quarterly and annual financial information
that would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such forms (without exhibits
unless requested), including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its Restricted
Subsidiaries and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants. 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 (unless
the SEC will not accept such a filing) and shall promptly make such information
available to all securities analysts and prospective investors upon request.
The Company shall at all times comply with TIA Section 314(a).
(b) For so long as any Transfer Restricted Securities remain
outstanding, the Company shall furnish to all Holders and prospective purchasers
of the Notes designated by the Holders of Transfer Restricted Securities,
promptly upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
(c) 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).
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred and is continuing, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto), and
including, in reasonable detail, calculations evidencing the basis for such
statement with respect to financial covenants, and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the
29
Company has violated any provisions of Article 4 hereof or, if any such
violation has come to their attention, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of any
such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the 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 covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution(s) on shares of the Company's
Capital Stock to holders of such Capital Stock (other than dividends or
distributions payable solely in shares of Capital Stock (other than Disqualified
Capital Stock)), (ii) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company, (iii) make any principal payment on, or
purchase, defease, redeem, or otherwise acquire or retire for value any
Indebtedness of the Company that is subordinate in right of payment to the
Notes, or (iv) make any Investment (other than Permitted Investments) (each of
the foregoing prohibited actions set forth in clauses (i), (ii), (iii) and (iv)
being referred to as a "RESTRICTED PAYMENT"), if at the time of such proposed
Restricted Payment or immediately after giving effect thereto, (a) a Default or
an Event of Default has occurred and is continuing or would result therefrom, or
(b) the Company is not, or would not be, able to incur at least $1.00 of
additional Indebtedness under the Debt to Cash Flow Ratio test or (c) the
aggregate amount of Restricted Payments made subsequent to the Issue Date
(excluding Restricted Payments permitted by clauses (w) and (x) below) exceeds
or would exceed the sum of: (1) the difference between (A) the cumulative
Consolidated EBITDA of the Company as of the date of such Restricted Payment
since the Issue Date, minus (B) the product of 1.75 times cumulative
Consolidated Interest Expense of the Company as of the date of such Restricted
Payment since the Issue Date, PLUS (2) 100% of the aggregate net proceeds
30
received by the Company from sales of Capital Stock of the Company since the
Issue Date (other than net proceeds from the sale of Disqualified Capital Stock
and net proceeds invested pursuant to clause (viii) of the definition of
"Permitted Investments" contained herein and net proceeds with respect to which
Indebtedness has been issued pursuant to clause (x) of Section 4.09 hereof).
The Company shall not, and shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, declare or pay any dividend or make any
other payment or distribution(s) on any shares of the Company's Preferred Equity
(other than dividends or distributions payable solely in shares of Preferred
Equity of the same series (other than Disqualified Capital Stock)) prior to the
Full Accretion Date.
Notwithstanding the foregoing, the provisions set forth above shall not
prohibit (u) the payment of any dividend within 60 days of the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of this Indenture, (v) dividends and distributions
made by any Wholly Owned Subsidiary of the Company or a Restricted Subsidiary,
(w) the redemption, repurchase, retirement or other acquisition of any Equity
Interests of the Company in exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company) of, or
the substantially concurrent conversion of, other Equity Interests of the
Company (other than Disqualified Capital Stock), (x) the defeasance, redemption
or repurchase of subordinated Indebtedness with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness or the substantially concurrent
sale (other than to a Subsidiary of the Company) of Equity Interests of the
Company (other than Disqualified Capital Stock); PROVIDED, HOWEVER, that the
amount of any such net cash proceeds that are utilized for any redemption,
repurchase, retirement or defeasance pursuant to clauses (w) or (x) above shall
be excluded from clause (c)(2) above, (y) the repurchase, redemption or other
acquisition or retirement for value of any Capital Stock of the Company or any
Subsidiary of the Company held by any employee, consultant or other service
provider of the Company; PROVIDED that the aggregate price paid for all such
Capital Stock shall not exceed $1 million, and (z) with respect to any
Restricted Subsidiary organized as a partnership or limited liability company or
similar organization, distributions in respect of partners' or members' income
tax liability or such distributions as may be required by law in an amount not
to exceed $1 million; PROVIDED, HOWEVER, in each case, that no Default or Event
of Default shall have occurred and be continuing at the time of such Restricted
Payment pursuant to any of the above clauses (u) though (z) and would not result
therefrom.
The amount of all Restricted Payments (other than cash) shall be the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an Officers' Certificate delivered to the Trustee) on the date of the Restricted
Payment of the asset(s) proposed to be transferred by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the first paragraph of this Section 4.07 were computed, which
calculations may be based upon the Company's most recently available financial
statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to: (i)(a) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company
31
or any of its Restricted Subsidiaries; (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries; or (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Indebtedness as in effect on the Issue Date, (b) this Indenture and the Notes,
(c) applicable law, (d) any Indebtedness permitted by the terms of this
Indenture to be incurred, PROVIDED that the restrictions contained in the
agreements governing such other Indebtedness are no more restrictive than those
contained in Exhibit C hereto, (e) customary provisions in leases or
purchase-money or installment sales financings permitted hereunder and entered
into in the ordinary course of business and consistent with past practices,
restricting the transfer, assignment or disposition of the assets so financed,
assets directly related thereto (such as related insurance), proceeds, products
and replacements thereof and accessions thereto, but not otherwise imposing
restrictions on any transfers of properties or assets to the Company or any of
its Restricted Subsidiaries, and not imposing restrictions of the kinds
contemplated by clauses (i) or (ii) above, in each case, more restrictive than
those set forth in Exhibit C hereto, or (f) Permitted Refinancing Debt, PROVIDED
that the restrictions contained in the agreements governing such Permitted
Refinancing Debt are no more restrictive than those contained in the agreements
governing the Indebtedness being refinanced.
SECTION 4.09. LIMITATION ON INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED CAPITAL
STOCK.
The Company shall not, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR"), any
Indebtedness (including Acquired Debt), or issue any Disqualified Capital Stock,
and the Company shall not cause or permit any of its Restricted Subsidiaries to
incur any Indebtedness or issue any shares of Preferred Equity; PROVIDED,
HOWEVER, that the Company may incur Indebtedness (including Acquired Debt) and
the Company may issue Disqualified Capital Stock if: (i) no Default or Event of
Default shall have occurred and be continuing; and (ii) immediately after giving
pro forma effect to such proposed incurrence and the receipt and application of
the net proceeds therefrom, the Company's Debt to Cash Flow Ratio would not
exceed (a) 7.0 to 1.0 from the Issue Date until the Full Accretion Date, and (b)
5.0 to 1.0 thereafter. The foregoing limitation shall not apply to (i) the
Notes; (ii) Indebtedness of the Company outstanding on the Issue Date; (iii)
Indebtedness incurred by the Company or its Restricted Subsidiaries to finance
the purchase of Coinstar units; PROVIDED, HOWEVER, that (a) the aggregate
principal amount of such Indebtedness does not exceed 100% of the fair market
value (on the date of such incurrence) of the Coinstar units acquired, plus
marketing costs incurred within 120 days after the initial regional marketing
launch for the designated marketing area in which such Coinstar units are
installed, PROVIDED that such marketing costs shall not exceed $2,500 for each
Coinstar unit installed, and (b) the Company has budgeted the proceeds of the
Offering in accordance with the "Use of Proceeds" section of the Offering
Memorandum and as projected and described in Exhibit A to the Offering
Memorandum; (iv) Indebtedness incurred by the Company for working capital
purposes pursuant to a revolving credit facility in an aggregate principal
amount that, when taken together with the principal amount of all other
Indebtedness incurred pursuant to this clause (iv) and then outstanding, does
not exceed $10 million; (v) Indebtedness of the Company's Restricted
Subsidiaries to the Company or to any Wholly Owned Restricted Subsidiary of the
Company; (vi) additional Indebtedness incurred by the Company or its Restricted
Subsidiaries to the extent that the aggregate principal amount or accreted value
thereof, as applicable (measured as of the date of issuance), does not exceed
$10 million at any one time outstanding; (vii) Permitted Refinancing
Indebtedness; (viii) Hedging Obligations entered into by the Company not as
speculative investments but as hedging transactions designed to protect the
Company against fluctuations in interest rates in connection with Permitted
Indebtedness; (ix) Indebtedness of the Company or a Restricted Subsidiary under
any Currency
32
Agreements; PROVIDED that (a) such Currency Agreements relate to Indebtedness
otherwise permitted under this Indenture or the purchase of Coinstar units by
the Company or a Restricted Subsidiary in the ordinary course of business and
(b) such Currency Agreements do not increase the Indebtedness or other
obligations of the Company or a Restricted Subsidiary outstanding other than as
a result of fluctuations in foreign currency exchange rates or by reason of
fees, indemnities and compensation payable thereunder; and (x) additional
indebtedness equal to the aggregate amount of net cash proceeds received from
the sale of Capital Stock other than Disqualified Capital Stock since the Issue
Date (provided that the net proceeds from such sales of Capital Stock will be
excluded from the clause (c)(ii) of the first paragraph of Section 4.07 hereof
and the basket created by clause (viii) of the definition of Permitted
Investments).
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to: (i) sell, lease, convey or otherwise dispose of any assets (including,
without limitation, by way of a sale and leaseback or similar arrangement) other
than in the ordinary course of business, PROVIDED that the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole shall be governed by
the provisions of Sections 4.13 and 5.01 hereof and not by the provisions of
this Section 4.10; or (ii) issue or sell Equity Interests of any of the
Company's Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $1 million or (b) for aggregate net proceeds in excess
of $1 million (each of the foregoing an "ASSET SALE"), unless (x) the Company or
such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value (as evidenced by
a resolution of the Company's Board of Directors set forth in an Officers'
Certificate delivered to the Trustee) of the assets, or other property or Equity
Interests issued or sold or otherwise disposed of in the Asset Sale; and (y) at
least 100% in the case of a sale of accounts (except for a sale of past-due
accounts for collection), and 75% in the case of a sale of other assets, of such
consideration is in the form of cash or Cash Equivalents or any combination
thereof. Notwithstanding the foregoing, any Restricted Payment or Permitted
Investment that is permitted by Section 4.07 hereof shall not be deemed to be an
Asset Sale. Notwithstanding the foregoing, the consideration received by the
Company or any Restricted Subsidiary in respect of any transaction which would
constitute an Asset Sale but for the fact that the fair market value of the
property of which disposition is made, or the amount of aggregate net proceeds
yielded thereby, is less than $1 million, shall, unless such transaction is
permitted as a Restricted Payment or Permitted Investment under Section 4.07
hereof, equal to at least the fair market value of such property.
Within 270 days after any Asset Sale, the Company or such Subsidiary
shall apply the Net Proceeds from such Asset Sale, to (a) reinvest in the
business of the Company (or any Restricted Subsidiary of the Company) that the
Company was engaged in on the date of this Indenture or (b) permanently reduce
borrowings and commitments under Indebtedness permitted to be incurred pursuant
to Section 4.09 hereof. Pending the final application of any such Net Proceeds,
the Company may temporarily invest such Net Proceeds in any manner not
prohibited by this Indenture. Any Net Proceeds from an Asset Sale not applied
or invested as provided in the first sentence of this paragraph will be deemed
to constitute "EXCESS PROCEEDS."
Within five Business Days after any date that the aggregate amount of
Excess Proceeds exceeds $5 million (an "ASSET SALE OFFER TRIGGER DATE"), the
Company shall commence an Asset Sale Offer pursuant to Section 3.09 hereof to
purchase the maximum principal amount of Notes that may be
33
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to (if prior to the Full Accretion Date) 100% of the Accreted Value
thereof on the date of repurchase, plus accrued and unpaid Liquidated Damages
thereon, if any, or (if on or after the Full Accretion Date) 100% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of repurchase, in each case in accordance
with the procedures set forth in Section 3.09 hereof. To the extent that the
aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company (or such Subsidiary) may use the remaining
Excess Proceeds for any purpose not prohibited by this Indenture. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
deemed to be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, conduct any business or enter into or
suffer to exist any transaction or series of transactions (including the
purchase, sale, transfer, lease or exchange of any Property or the rendering of
any service) with or for the benefit of any Affiliate (each, an "AFFILIATE
TRANSACTION") other than any Affiliate Transaction that is on terms that are
fair and reasonable and no less favorable to the Company or such Restricted
Subsidiary than those that might reasonably have been obtained at such time in a
comparable transaction or series of related transactions on an arms-length basis
from a Person that is not such an Affiliate; PROVIDED, HOWEVER, that any
Affiliate Transaction involving aggregate consideration of $1 million or more
shall require approval by a majority of the disinterested members of the
Company's Board of Directors; and PROVIDED, FURTHER, that any Affiliate
Transaction involving aggregate consideration of $10 million or more in the
event that a Public Equity Offering shall have been consummated or $5 million or
more prior to the consummation of a Public Equity Offering, shall require a
fairness opinion from an accounting, appraisal or investment banking firm of
national standing. Notwithstanding the foregoing, transactions between or among
any combination of the Company and its Restricted Subsidiaries will not be
deemed Affiliate Transactions, and any transaction among any combination of the
Company and its Restricted Subsidiaries, on one hand, and any one or more
Unrestricted Subsidiaries on the other hand, shall not be deemed an Affiliate
Transaction if it is on terms that are fair and reasonable to the Company or any
such Restricted Subsidiary and would be permitted under Section 4.07 hereof.
SECTION 4.12. 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 (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Restricted 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 Restricted 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 Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders of the Notes.
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SECTION 4.13. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Within 30 days of the occurrence of a Change of Control, the
Company shall notify the Trustee in writing of such proposed occurrence and
shall make an offer to purchase (a "CHANGE OF CONTROL OFFER") the Notes at a
purchase price equal to (if prior to the Full Accretion Date) 101% of the
Accreted Value thereof plus accrued and unpaid Liquidated Damages thereon, if
any, to the Change of Control Payment Date or (if on or after the Full Accretion
Date) 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the Change of Control
Payment Date (in either case, the "CHANGE OF CONTROL PURCHASE PRICE"). Within
50 days of the occurrence of a Change of Control, the Company shall also: (i)
cause a notice of the Change of Control Offer to be sent at least once to the
Dow Xxxxx News Service or similar business news service in the United States and
(ii) send by first-class mail, postage prepaid, to the Trustee and to each
registered Holder of Notes, at its address appearing in the register of the
Notes maintained by the Registrar, a notice stating: (A) that the Change of
Control Offer is being made pursuant to this Section 4.13 and that all Notes
tendered will be accepted for payment, subject to the terms and conditions set
forth herein; (B) the Change of Control Purchase Price and the purchase date
(which shall be a Business Day no earlier than 30 days and no later than 60 days
after the date on which such notice is mailed) (the "CHANGE OF CONTROL PAYMENT
DATE"); (C) that any Note not tendered will continue to accrue interest (or, if
such Change of Control Offer is prior to the Full Accretion Date, the Accreted
Value will continue to accrete); (D) that unless the Company defaults in the
payment of the Change of Control Purchase Price, any such Notes accepted for
payment pursuant to the Change of Control Offer will cease to accrue interest or
accrete in value after the Change of Control Payment Date; (E) that Holders
accepting the offer to have their Notes purchased pursuant to a Change of
Control Offer will be required to surrender such Notes to the Paying Agent at
the address specified in the notice prior to the close of business on the
Business Day preceding the Change of Control Payment Date; (F) that Holders
will be entitled to withdraw their acceptance if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of such Notes delivered for purchase,
and a statement that such Holder is withdrawing its election to have such Notes
purchased; (G) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, PROVIDED that each Note purchased and each such new Note
issued shall be in an original principal amount in denominations of $1,000 and
integral multiples thereof; and (H) any other procedures that a Holder must
follow to accept a Change of Control Offer or effect withdrawal of such
acceptance. The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
and regulations in connection with the repurchase of Notes in connection with a
Change of Control and, to the extent that the provisions of such securities laws
or regulations conflict with this Section 4.13, the Company shall not be deemed
to have breached their obligations under this Section 4.13 by virtue thereof.
(b) On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment all the Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so accepted and (iii) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate stating
the aggregate principal amount of Notes or portions thereof tendered to the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
accepted payment in an amount equal to the purchase price for the Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to such Holder a new Note equal in
35
principal amount to any unpurchased portion of the Notes surrendered by such
Xxxxxx, if any; PROVIDED, that each such new Note shall be in a principal amount
of $1,000 or an integral multiple thereof. The Company shall publicly announce
the results of the Change of Control Offer on or as soon as practicable after
the Change of Control Payment Date.
(c) The Change of Control provisions described herein shall be
applicable whether or not any other provisions of this Indenture are applicable.
SECTION 4.14. NO SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, the Company
shall not incur any Indebtedness that is subordinate or junior in right of
payment to any Senior Debt and senior in any respect in right of payment to the
Notes.
SECTION 4.15. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Board of Directors of the Company may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary at any time; PROVIDED, HOWEVER, that
immediately after giving effect to such designation on a pro forma basis as if
the same had occurred at the beginning of the most recently ended full fiscal
quarter of the Company for which consolidated financial statements are
available, (i) the Company would be permitted to incur at least $1.00 of
additional Indebtedness under the Debt to Cash Flow Ratio test and (ii) an
Officers' Certificate with respect to such designation is delivered to the
Trustee within 75 days after the end of the fiscal quarter of the Company in
which such designation is made (or, in the case of a designation made during the
last fiscal quarter of the Company's fiscal year, within 120 days after the end
of such fiscal year), which Officers' Certificate states the effective date of
such designation; and PROVIDED, FURTHER, that such designation shall be deemed
to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if no Default or Event of Default would be
in existence following such designation.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default;
PROVIDED, HOWEVER, that immediately after giving effect to such designation on a
pro forma basis, the Company would be in compliance with Section 4.07 hereof.
For purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash or
in the form in which such Investment was originally made) in the Subsidiary so
designated, whether made before or after the Issue Date, shall be deemed to be
Restricted Payments at the time of such designation and shall reduce the amount
available for Restricted Payments. All such outstanding Investments shall be
deemed to constitute Investments in an amount equal to the greatest of (i) the
net book value of such Investments at the time of such designation, (ii) the
fair market value of such Investments at the time of such designation and (iii)
the original fair market value of such Investments at the time they were made.
Such designation shall only be permitted if such Restricted Payment would be
permitted at such time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary.
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SECTION 4.16. ASSET MAINTENANCE TEST.
Notwithstanding any other provision of this Indenture, the Company
shall not (i) effect any sale, lease, transfer or other disposition of any of
its property or assets to a Subsidiary or (ii) make any Permitted Investment
(except (a) the initial $10 million permitted by clause (viii) of the definition
thereof and (b) an aggregate of $1 million for Investments in Restricted
Subsidiaries solely for the creation and maintenance thereof) or (iii) make any
Restricted Payment (except a Restricted Payment permitted by clauses (u)-(z) of
the second paragraph of Section 4.07 hereof), if, as a result thereof or
immediately upon giving effect thereto, Total Gross Assets would be less than
the amounts set forth below during the twelve-month period commencing January 1
of each year set forth below:
YEAR TOTAL GROSS ASSETS
---- -----------------
1996 $60.0 million
1997 60.0 million
1998 70.0 million
1999 92.5 million
2000 and thereafter 100.0 million
In the event the Company redeems or repurchases, or effects a Legal
Defeasance or Covenant Defeasance with respect to, less than 100% of the Notes,
the amounts set forth under the caption "Total Gross Assets" above shall be
reduced by multiplying each such amount by a fraction the denominator of which
shall be the then outstanding aggregate Accreted Value (if prior to the Full
Accretion Date) or principal amount (if on or after the Full Accretion Date) of
the Notes and the numerator of which shall be the Accreted Value (if prior to
the Full Accretion Date) or principal amount (if on or after the Full Accretion
Date) of the Notes so redeemed, repurchased or defeased.
Within 30 days after the consummation by the Company of any
transaction of a type described in any of clause (i), (ii) or (iii) above, the
Company shall deliver, or cause to be delivered, to the Trustee, an Officers'
Certificate stating that such transaction complies with this Section 4.16 and
that all conditions precedent in this Indenture relating to such transaction
has been complied with.
SECTION 4.17. LIMITATION ON CHANGES IN CAPITAL STRUCTURE.
The Company shall not issue any Disqualified Capital Stock prior to
the Full Accretion Date (except for Disqualified Capital Stock issuable upon
exercise of warrants outstanding on the Issue Date), and the Company shall not
directly or indirectly amend or modify its Amended and Restated Certificate of
Incorporation with respect to the redemption provisions in effect as of the
Issue Date relating to the Preferred Equity of the Company.
SECTION 4.18. CONTINGENT WARRANTS.
If the Company has not consummated a Public Equity Offering by October
1, 1998 and an Exercise Event (as defined in the Warrant Agreement) has not
otherwise occurred, the Company shall issue warrants (the "Contingent Warrants")
to holders of the Notes pursuant to the provisions of the Warrant Agreement,
dated as of the date hereof, by and between the Company and the Initial
Purchaser (the
37
"Warrant Agreement"). The Contingent Warrants shall be exercisable initially
for 285,000 shares of Common Stock of the Company and shall not be
transferrable separately from the Notes.
SECTION 4.19. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall deliver to the Trustee, contemporaneously with the
delivery of annual financial information pursuant to section 4.03 hereof, a
written notice specifying the amount of original issue discount (including
daily rates and accrual periods) accrued on outstanding Notes as of the end of
such year.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company shall not consolidate with or merge with or into any
Person (whether or not the Company is the surviving Person) or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets (whether as an entirety or substantially as an entirety in
a transaction or a series of related transactions) to any Person or adopt a Plan
of Liquidation unless: (i) either (a) the Company will be the surviving or
continuing corporation (the "SURVIVING PERSON") or (b) the Surviving Person (if
other than the Company) formed by or surviving any such consolidation or merger
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall expressly assume, by supplemental indenture, executed and
delivered to the Trustee and in form satisfactory to the Trustee, all of the
obligations of the Company under the Notes, this Indenture and the Notes
Registration Rights Agreement, and the obligations under the Notes, this
Indenture, and the Notes Registration Rights Agreement remain in full force and
effect, (ii) immediately after giving effect to such transaction and the
assumption contemplated above, the Company or such Surviving Person shall have a
Debt to Cash Flow Ratio equal to or less than the Debt to Cash Flow Ratio of the
Company immediately preceding the transaction; (iii) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
or be continuing; and (iv) immediately after giving effect to such transaction,
the Surviving Person shall continue to operate the business of the Company that
was the principal business of the Company immediately preceding such
transaction.
In connection with any consolidation, merger or transfer contemplated
by this provision, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent in this
Indenture provided for relating to such transaction or transactions have been
complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the Surviving Person
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and
38
be substituted for (so that from and after the date of such consolidation,
merger, sale, lease, conveyance or other disposition, the provisions of this
Indenture referring to "the Company" shall refer instead to the Surviving Person
and not to the Company), and may exercise every right and power of the Company
under this Indenture with the same effect as if such Surviving Person had been
named as the Company herein; PROVIDED, HOWEVER, that the Company shall not be
relieved from the obligation to pay the principal of and interest on the Notes
except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "Event of Default" shall occur upon the happening of any of the
following:
(a) (i) the Company defaults in the payment when due of interest
or Liquidated Damages on any Note on any day and such default
continues for a period of 30 days or more after the same becomes due
and payable;
(b) the Company defaults in the payment when due of principal or
Accreted Value of any Note, when such principal or Accreted Value
becomes due and payable, at maturity, upon redemption (including in
connection with an offer to purchase), pursuant to an Asset Sale
Offer, a Change of Control Offer or otherwise;
(c) the Company defaults in the observance or performance of any
other covenant, representation, warranty or agreement contained in
this Indenture or the Notes, which default continues for a period of
45 days after the Company receives written notice specifying the
default (and requiring that such default be remedied) from the Trustee
or from the Holders of not less than 25% in Accreted Value (if prior
to the Full Accretion Date) or aggregate principal amount (if on or
after the Full Accretion Date) of the Notes then outstanding;
(d) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any
Material Restricted Subsidiary (or the payment of which is guaranteed
by the Company or any Material Restricted Subsidiary), whether such
Indebtedness or guarantee now exists, or is created after the Issue
Date, which default results in the acceleration of such Indebtedness
prior to its express maturity and the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness the maturity of which has been so accelerated, aggregates
$5 million or more;
(e) one or more judgments are entered by a court or courts of
competent jurisdiction against the Company or any of its Material
Restricted Subsidiaries and such judgment or judgments remain
undischarged, or unstayed or unsatisfied for a period of 60
consecutive days, where such judgment or judgments are for the payment
of money in an aggregate amount in excess of $5
39
million (in excess of applicable insurance coverage with respect to
which the Company's insurer has acknowledged coverage in writing);
(f) the Company or any of its Restricted Subsidiaries pursuant to
or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against
it in an involuntary case,
(iii) consents to the appointment of a Bankruptcy Custodian
of such Person or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due;
(g) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Material Restricted Subsidiaries in an involuntary case;
(ii) appoints a Bankruptcy Custodian of the Company or any
of its Material Restricted Subsidiaries for all or substantially
all of the property of the Company or any of its Material
Restricted Subsidiaries; or
(iii) orders the liquidation of the Company or any of its
Material Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(h) any holder of at least $5 million in aggregate principal
amount of Indebtedness of the Company or any Material Restricted
Subsidiary shall commence judicial proceedings to foreclose upon
assets of the Company or any Material Restricted Subsidiary having an
aggregate fair market value, individually or in the aggregate, of at
least $5 million or shall have exercised any right under applicable
law or applicable security documents to take ownership of any such
assets in lieu of foreclosure.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (f) or (g) of Section 6.01 hereof with respect to the Company, any
Material Restricted Subsidiary or any group of Material Restricted Subsidiaries
that, taken as a whole, would constitute a Material Restricted Subsidiary)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. Upon any such
40
declaration, the Notes shall become due and payable immediately.
Notwithstanding the foregoing, if an Event of Default specified in clause (f) or
(g) of Section 6.01 hereof occurs with respect to the Company, any Material
Restricted Subsidiary or any group of Material Restricted Subsidiaries that,
taken as a whole, would constitute a Material Restricted Subsidiary), all
outstanding Notes shall be due and payable immediately without further action or
notice. The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of any principal, interest or premium that has become due
solely because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after October 1, 2001 by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of the
Company with the intention of avoiding payment of the premium that the Company
would have had to pay if the Company then had elected to redeem the Notes
pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding. If an Event of Default occurs prior to October 1,
2001 by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to such date, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable in an amount, for each of the years beginning on October 1 of the years
set forth below, as set forth below (expressed as a percentage of the Accreted
Value to the date of payment that would otherwise be due but for the provisions
of this sentence):
YEAR PERCENTAGE
---- ----------
1997. . . . . . . . . . . . . . . . . . . . . 113.000%
1998. . . . . . . . . . . . . . . . . . . . . 111.750%
1999. . . . . . . . . . . . . . . . . . . . . 110.500%
2000 . . . . . . . . . . . . . . . . . . . . 109.250%
2001. . . . . . . . . . . . . . . . . . . . . 108.000%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate Accreted Value (if
prior to the Full Accretion Date) or principal amount (if on or after the Full
Accretion Date) of the then outstanding Notes by notice to the Trustee may on
behalf of the Holders of all of the Notes waive an existing Default or Event of
Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium and Liquidated Damages, if
any, or interest on the Notes (including in connection with an offer to
purchase). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Note for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes, unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in aggregate Accreted Value (if prior to the
Full Accretion Date) or aggregate principal amount (if on or after the Full
Accretion Date) of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Note only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in Accreted Value (if prior to the
Full Accretion Date) or principal amount (if on or after the Full Accretion
Date) of the then outstanding Notes make a written request to the Trustee
to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in Accreted
Value (if prior to the Full Accretion Date) or principal amount (if on or
after the Full Accretion Date) of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
42
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any, and
interest, respectively; and
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees 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 of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in Accreted Value (if prior to the Full Accretion Date) or principal
amount (if on or after the Full Accretion Date) of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel. The Trustee may consult
with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, and apply to the SEC
for permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and becomes
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after the Trustee becomes aware
thereof. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Notes, the Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each September 15 beginning with the September 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report
46
need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2)
and Section 313(b)(1). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for its
acceptance of this Indenture and services hereunder. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Company shall indemnify each of the Trustee and any predecessor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on the income of the Trustee), incurred
by it arising out of or in connection with the acceptance or administration of
its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(f) or (g) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section 313(b)(2)
to the extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property;
(d) the Trustee becomes incapable of acting; or
(e) any debt rating of the Trustee is downgraded by two or more
rating classifications.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Xxxxxxx does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in Accreted Value (if prior to Full
Accretion Date) or principal amount (if on or after the Full Accretion Date) of
the then outstanding Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10, such Holder of a Note may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, PROVIDED
all sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee.
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SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by
a resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 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 Notes on the
date the conditions set forth below are satisfied (hereinafter, "LEGAL
DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed to be "outstanding" only for
the purposes of Section 8.05 hereof and the other Sections of this Indenture
referred to in (i) -(iv) below, and to have satisfied all of its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions, which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
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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 (including Liquidated
Damages) on such Notes when such payments are due; (ii) the Company's
obligations with respect to such Notes under Article 2 and Section 4.02 hereof;
(iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder
and the Company's obligations in connection therewith; and (iv) this Article
Eight. Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10,
4.11 and 4.13 hereof with respect to the outstanding Notes on and after the date
the conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.01 hereof of the option applicable to this Section 8.03 hereof,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
Sections 6.01(c) through 6.01(e) and Section 6.01(h) hereof shall not constitute
Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either Section
8.02 or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination thereof,
in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the
principal of, premium and Liquidated Damages, if any, and interest on
the outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be;
(b) 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
50
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income
tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had
not occurred;
(c) in the case of an election under Section 8.03 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel
in the United States reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the incurrence of Indebtedness all or
a portion of the proceeds of which will be used to defease the Notes
pursuant to this Article Eight concurrently with such incurrence);
PROVIDED, HOWEVER, that the benefits of any Covenant Defeasance or
Legal Defeasance shall immediately and automatically cease if any
Event of Default under Section 6.01(f) or 6.01(g) hereof shall have
occurred, at any time in the period ending on the 91st day after the
date of deposit;
(e) 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 or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that, as of the date such opinion:
after the 91st day following the deposit (assuming that no Holder of
any Notes would be considered an insider of the Company under
applicable Bankruptcy Law), the rights of the Holders will not be
adversely affected in any proceeding under applicable Bankruptcy Law
by reason of such Covenant Defeasance or Legal Defeasance (by
comparison to the rights such Holders would have had such Covenant
Defeasance or Legal Defeasance not been effected);
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by it with
the intent of preferring the Holders of Notes over any other creditors
of the Company or with the intent of defeating, hindering, delaying or
defrauding its creditors or others; and
(h) 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.
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SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest
(including Liquidated Damages), but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 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 non-callable Government Securities held by it as
provided in Section 8.04 hereof that, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(a) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Notes shall thereafter, as a
secured creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such
52
time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; PROVIDED,
HOWEVER, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes in the case of a merger or consolidation pursuant to
Article Five hereof;
(d) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of a Note; or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture or the Notes with the consent of
the Holders of at least a majority in principal amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a tender offer or exchange offer for the Notes) and, subject to Sections 6.04
and 6.07 hereof, any existing Default or Event of Default (other than a Default
or Event of Default in the payment of the principal of, premium, if any, or
interest on the Notes, except a payment default resulting from an acceleration
that has been rescinded) or compliance with any provision of this Indenture or
the Notes may be waived with the
53
consent of the Holders of a majority in principal amount of the then outstanding
Notes (including consents obtained in connection with a tender offer or exchange
offer for the Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Notes or alter any provision that, directly or indirectly, affects
the redemption price, redemption date or the Accreted Value (if prior
to the Full Accretion Date) or principal amount (if on or after the
Full Accretion Date) of the Notes;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in any currency other than that stated
in the Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or premium, if any, or interest on
the Notes (or, if applicable, Accreted Value);
54
(g) waive a redemption payment with respect to any Note (other
than a payment required by Section 4.10 or 4.13 hereof); or
(h) make any change in the foregoing amendment and waiver
provisions.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Xxxxxx's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until its Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
55
ARTICLE 10
SUBORDINATION
SECTION 10.01 AGREEMENT TO SUBORDINATE.
(a) The Company agrees, and each Holder by accepting a Note agrees,
that the Indebtedness evidenced by the Note is subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
(B) For purposes of this Article 10, a distribution may consist of
cash, securities or other property, by set-off or otherwise.
SECTION 10.02 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities:
(a) holders of Senior Debt shall be entitled to receive payment in
full of all Obligations due in respect of such Senior Debt (including
interest after the commencement of any such proceeding at the rate
specified in the applicable Senior Debt) before Holders shall be entitled
to receive any payment with respect to the Notes (except that Holders may
receive (i) securities that are subordinated to at least the same extent as
the Notes to (A) Senior Debt and (B) any securities issued in exchange for
Senior Debt and (ii) payments and other distributions made from any
defeasance trust created pursuant to Article 8 hereof); and
(b) until all Obligations with respect to Senior Debt (as provided in
subsection (a) above) are paid in full, any distribution to which Holders
would be entitled but for this Article 10 shall be made to holders of
Senior Debt (except that Holders may receive securities that are
subordinated to at least the same extent as the Notes to (i) Senior Debt
and (ii) any securities issued in exchange for Senior Debt), as their
interests may appear.
SECTION 10.03 DEFAULT ON DESIGNATED SENIOR DEBT.
The Company may not make any payment or distribution to the Trustee or
any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than (i) securities that are subordinated to at least the same extent as the
Notes to (A) Senior Debt and (B) any securities issued in exchange for Senior
Debt and (ii) payments and other distributions made from any defeasance trust
created pursuant to Section 8.01 hereof) until all principal and other
Obligations with respect to the Senior Debt have been paid in full if:
56
(a) a default in the payment of any principal or other Obligations
with respect to Designated Senior Debt occurs and is continuing beyond any
applicable grace period in the agreement, indenture or other document
governing such Designated Senior Debt; or
(b) a default, other than a payment default, on Designated Senior
Debt occurs and is continuing that then permits holders of the Designated
Senior Debt to accelerate its maturity and the Trustee receives a notice of
the default (a "PAYMENT BLOCKAGE NOTICE") from a Person who may give it
pursuant to Section 10.11 hereof. If the Trustee receives any such Payment
Blockage Notice, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until (i) at least 360 days shall
have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if
any, and interest on the Notes that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) 179 days have passed after notice is received if the maturity of
such Designated Senior Debt has not been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
SECTION 10.04 ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event of Default,
the Company shall promptly notify holders of Senior Debt of the acceleration.
SECTION 10.05 WHEN DISTRIBUTION MUST BE PAID OVER.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company that would prohibit the making of any payment to or
by the Trustee in respect of the Notes under this Article 10. Failure to give
such notice shall not affect the subordination of the Notes to Senior Debt.
Notwithstanding the provisions of this Article 10 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment to or by
the Trustee in respect of the Notes, unless and until the Trustee shall have
received a Payment Blockage Notice; and, prior to the receipt of any Payment
Blockage Notice, the Trustee, subject to the provisions of Section 7.01
hereof, shall be entitled in all respects to assume that no such facts exist;
PROVIDED, HOWEVER, that if a Responsible Officer of the Trustee shall not have
received, at least three Business Days prior to the date upon which by the
terms hereof any such money may become payable for any purpose (including,
without limitation, the payment of the principal amount, issue price, accrued
original issue discount, redemption price, purchase price, Change of Control
Offer Purchase Price or interest, if any, as the case may be, in respect of
any Note), a Payment Blockage Notice, then, anything
57
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to
the contrary that may be received by it within three Business Days prior to
such date.
Subject to the provisions of Section 7.01 hereof, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee or agent on
behalf of such holder), or a Representative of any of the foregoing, to
establish that such notice has been given by a holder of Senior Debt (or a
trustee or agent on behalf of any such holder). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment
or distribution pursuant to Article 10, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 10, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such Person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such Person to
receive such payment.
In the event that the Trustee or any Holder receives any payment of
any Obligations with respect to the Notes at a time when the Trustee or such
Holder, as applicable, has received a Payment Blockage Notice or otherwise has
actual knowledge that such payment is prohibited by Section 10.03 hereof, such
payment shall be held by the Trustee or such Holder, in trust for the benefit
of, and shall be paid forthwith over and delivered, upon written request, to,
the holders of Senior Debt as their interests may appear or their Representative
under the indenture or other agreement (if any) pursuant to which Senior Debt
may have been issued, as their respective interests may appear, for application
to the payment of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in accordance with their
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06 NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice shall not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
58
SECTION 10.07 SUBROGATION.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Debt. A distribution made under this Article 10 to holders of Senior
Debt that otherwise would have been made to Holders is not, as between the
Company and Holders, a payment by the Company on the Notes.
SECTION 10.08 RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders and holders of
Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation of the
Company, which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
SECTION 10.09 SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Note shall be impaired by any act or failure
to act by the Company or any Holder or by the failure of the Company or any
Holder to comply with this Indenture.
SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative(s).
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
59
SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights.
SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as the Holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
6.09 hereof at least 30 days before the expiration of the time to file such
claim, the Representatives are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
SECTION 10.13 AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the requisite percentage of the holders of all
Senior Debt in accordance with the terms of the documents governing such Senior
Debt.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA Section 318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the
others is duly given if in writing and delivered in person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next-day delivery, to the others' address:
60
If to the Company:
Coinstar, Inc.
00000 XX 00xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
with a copy to:
Xxxx X. Xxxxxxx
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
and a copy to:
Xxxxx X. Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Trustee Administration
The Company or the Trustee, by notice to the other, may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next-day delivery, to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed
61
to any Person described in TIA Section 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
62
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES, PARTNERS
AND STOCKHOLDERS.
No past, present or future director, officer, employee, incorporator,
partner or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Notes, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder by accepting a Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
SECTION 11.08. GOVERNING LAW; CONSENT TO JURISDICTION.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES. Each of the parties hereto hereby
irrevocably and unconditionally: (i) submits itself and its property in any
legal action or proceeding relating to this Indenture, the Notes and the Notes
Registration Rights Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive jurisdiction of the courts of
the State of New York and the courts of the United States of America for the
Southern District of New York, and appellate courts thereof, and consents and
agrees to such action or proceeding being brought in such courts; and (ii)
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in any inconvenient court and agrees not to plead or claim the same.
SECTION 11.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
63
SECTION 11.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
[signature page follows]
64
SIGNATURES
Dated as of October 1, 1996.
COINSTAR, INC.
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
President
Dated as of October ___, 1996.
THE BANK OF NEW YORK,
as Trustee
By:
----------------------------------------
Name:
Title:
SIGNATURES
Dated as of October __,1996 COINSTAR, INC.
a Delaware corporation
By:
----------------------------------------
Xxxx X. Xxxxxx
President
Dated as of October 1, 1996.
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT A
(Face of Note)
13% Senior Subordinated Discount Notes due 2006
FOR PURPOSES OF SECTION 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT;
FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS NOTE, THE ISSUE PRICE IS $679.89.
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $320.11. THE ISSUE DATE IS OCTOBER
22, 1996 AND THE YIELD TO MATURITY IS 13.2139% PER ANNUM.
CUSIP: 19259P AA0
No. $ 95,000,000
COINSTAR, INC.
promises to pay to CEDE & CO.
or registered assigns,
the principal sum of ninety-five million
dollars on October 1, 2006.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
COINSTAR, INC.
By: ______________________________
Name: Xxxx X. Xxxxxx
Title: President
Dated as of October ___, 1996
This is one of the
Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By: ___________________________
Authorized Signatory
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-1
(Back of Note)
13% Senior Subordinated Discount Notes due 2006
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED
HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER
OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. INTEREST. Coinstar, Inc., a Delaware corporation (the "COMPANY"),
promises to pay interest on the principal amount of this Note at 13% per annum.
Cash interest on this Note will neither accrue nor be payable prior to October
1, 1999. The Company shall pay interest on this Note commencing April 1, 2000
until maturity and shall pay the Liquidated Damages, if any, payable pursuant to
Section 5 of the Notes Registration Rights Agreement referred to below. The
Company will pay interest and Liquidated Damages semi-annually in arrears on
October 1 and April 1 of each year, or if any such day is not a Business Day, on
the next succeeding Business Day (each, an "INTEREST PAYMENT DATE"). Interest
on the Notes shall
A-2
accrue from the most recent date to which interest has been paid or, if no
interest has yet been paid, from October 1, 1999 (the "FULL ACCRETION DATE").
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages, if any, (without regard to any applicable grace periods)
from time to time on demand at the same rate to the extent lawful. Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 next preceding the Interest Payment Date, even if such Notes are
cancelled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium, interest and
Liquidated Damages at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and PROVIDED that payment by wire transfer of immediately available funds
shall be required with respect to principal of and interest, premium and
Liquidated Damages, if any, on, all Global Notes and all other Notes the
Holders of which shall have provided written wire transfer instructions to the
Company or the Paying Agent at least 10 days prior to the applicable payment
date. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED that Liquidated Damages may be paid through the
issuance of additional Notes having an Accreted Value at the time of issuance
equal to the amount of Liquidated Damages so paid.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as
of October 1, 1996 (the "INDENTURE") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended
(15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement
of such terms. The Notes are obligations of the Company limited to $95
million in aggregate principal amount.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to October 15,
2001. On and after October 15, 2001, the Company shall have the option to
redeem the Notes, in whole or in part, upon not less than 30 nor more than 60
days' written notice, at the redemption prices (expressed as percentages of
the principal amount) set forth below, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period commencing October 1 of each of the
years indicated below:
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YEAR PERCENTAGE
---- ----------
2001. . . . . . . . . . . . . . . . . . . . . 108.000%
2002 . . . . . . . . . . . . . . . . . . . . 105.333%
2003 . . . . . . . . . . . . . . . . . . . . 102.667%
2004 and thereafter . . . . . . . . . . . . . 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph
5, in the event that the Company consummates a Public Equity Offering after
which there is a Public Market, the Company may redeem at its option from the
proceeds thereof at any time prior to October 1, 1999, up to 100% of the
aggregate principal amount of Notes originally issued at 118.000% of the
Accreted Value thereof as of the date of redemption, plus accrued and unpaid
Liquidated Damages, if any, to the date of redemption; PROVIDED, HOWEVER,
that such redemption occurs within 60 days of the date of the closing of such
Public Equity Offering.
6. MANDATORY REDEMPTION.
The Company shall not be required to make mandatory redemption payments or
sinking fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the Accreted Value thereof (if prior to the Full
Accretion Date) plus accrued and unpaid Liquidated Damages thereon, if any, or
(if on or after the Full Accretion Date) 101% of the principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
Change of Control Payment Date (as hereinafter defined) (the "CHANGE OF CONTROL
PURCHASE PRICE"). Within 30 days of the occurrence of a Change of Control, the
Company shall notify the Trustee in writing of such proposed occurrence and
shall make a Change of Control Offer. Within 50 days following the occurrence
of a Change of Control, the Company shall mail a notice to each Holder setting
forth the procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales,
within five days of each Asset Sale Trigger Date, the Company shall commence an
offer to all Holders of Notes (an "ASSET SALE OFFER") pursuant to Section 3.09
of the Indenture to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds at an offer price in cash in an amount
equal to (if prior to the Full Accretion Date) 100% of the Accreted Value
thereof on the date of repurchase, plus accrued and unpaid Liquidated Damages
thereon, if any, to the Asset Sale Offer Purchase Date, or (if on or after the
Full Accretion Date) 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the Asset Sale Offer
Purchase Date, in each case in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate amount of Notes tendered pursuant
to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such
Subsidiary) may use the remaining Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. Holders of Notes that are the subject of an offer
to purchase shall receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
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8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least 30
days but not more than 60 days before a redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest shall cease to accrue on Notes or portions
thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000.
The transfer of Notes may be registered and Notes may be exchanged as provided
in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA.
12. DEFAULTS AND REMEDIES. Events of Default include:
(i) default for 30 days in the payment when due of interest or Liquidated
Damages on any Note; (ii) default in payment when due of principal or Accreted
Value of or premium, if any, on the Notes when the same becomes due and
payable, at maturity, upon redemption (including in connection with an offer
to purchase) or otherwise, (iii) failure by the Company for 45 days after
notice to the Company by the Trustee or the Holders of at least 25% in
principal amount of the Notes then outstanding to comply with any other
covenant or agreement in the Indenture or the Notes; (iv) default under
certain other agreements relating to Indebtedness of the Company or any
Material Restricted Subsidiary, which default results in the acceleration of
such Indebtedness prior to its express maturity; (v) certain final judgments
for the payment of money that remain undischarged for a period of 60 days;
(vi) certain events of bankruptcy or insolvency with respect to the Company or
any of its Material Restricted Subsidiaries; and (vii) certain foreclosure
proceedings with respect to the assets of the Company or any Material
Restricted Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in Accreted Value (if prior to the Full
Accretion Date) or principal amount (if on or after the Full Accretion Date)
of the then outstanding Notes may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency with respect
to the Company or any of its Restricted Subsidiaries, all outstanding Notes
will become due and
A-5
payable immediately without further action or notice. Holders may not enforce
the Indenture or the Notes except as provided in the Indenture. Subject to
certain limitations, Holders of a majority in aggregate Accreted Value (if prior
to the Full Accretion Date) or aggregate principal amount (if on or after the
Full Accretion Date) of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate Accreted Value (if prior to the Full Accretion Date) or
aggregate principal amount (if on or after the Full Accretion Date) of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of the principal of, premium or Liquidated Damages, if any, or interest
on the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company, as such, shall
have any liability for any obligations of the Company under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Securities (as defined in the Notes Registration
Rights Agreement) shall have all the rights set forth in the Notes Registration
Rights Agreement, dated as of October 22, 1996, by and among the Company and the
parties named on the signature pages thereof (the "NOTES REGISTRATION RIGHTS
AGREEMENT").
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Notes Registration Rights Agreement.
Requests may be made to:
A-6
Coinstar, Inc.
00000 XX 00xx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Chief Financial Officer
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
________________________________________________________________________________
Date: _________________
Your Signature:______________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.13 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.13
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.13 of the Indenture, state the amount you
elect to have purchased: $___________
Date:_________________________ Your Signature:_________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_________________
Signature Guarantee.
A-9
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE(1).
The following exchanges of a part of this Global Note for Definitive Notes
have been made:
Date of Exchange Amount of decrease in Amount of increase in Principal Amount of this Signature of
---------------- Principal Amount of Principal Amount of Global Note authorized signatory
this Global Note this Global Note following such decrease of Trustee or Note
--------------------- --------------------- (or increase) Custodian
------------------------ --------------------
--------------------
(1) This should be included only if the Note is issued in global form.
A-10
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EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: 13% Senior Subordinated Discount Notes due 2006 of the Company.
This Certificate relates to $_____ principal amount of Notes held in *
________ book-entry or *_______ definitive form by ________________ (the
"TRANSFEROR").
The Transferor*:
/ / has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a
Note or Notes in definitive, registered form of authorized
denominations in an aggregate principal amount equal to its beneficial
interest in such Global Note (or the portion thereof indicated above);
or
/ / has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above captioned Notes and as provided in Section 2.06 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act (as defined below) because:*
/ / Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.06(a)(ii)(A) or Section
2.06(d)(i)(A) of the Indenture).
/ / Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended
(the "SECURITIES ACT")) in reliance on Rule 144A (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(i) or Section 2.06(d)(i)(B)
of the Indenture) or pursuant to an exemption from registration in
accordance with Rule 904 under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture.)
--------------------
*Check applicable box.
B-1
/ / Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement
under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture).
/ / Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act,
other than Rule 144A, 144 or Rule 904 under the Securities Act. An
Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
_____________________________________________
[INSERT NAME OF TRANSFEROR]
By:__________________________________________
Date:___________________________
--------------------
*Check applicable box.
B-2
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EXHIBIT C
The Subsidiary shall not, and shall not cause or permit any of its
subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
pay any dividend or make any other payment or distribution(s) on shares of the
Subsidiary's Capital Stock to holders of such Capital Stock (other than
dividends or distributions payable solely in shares of Capital Stock (other
than Disqualified Capital Stock)); (ii) purchase, redeem or otherwise acquire
or retire for value any Capital Stock of the Subsidiary; or (iii) make any
principal payment on, or purchase, defease, redeem, or otherwise acquire or
retire for value any Indebtedness of the Subsidiary that is subordinate in
right of payment to the [Obligations under the Indebtedness documents] (each
of the foregoing prohibited actions set forth in clauses (i), (ii) and (iii)
being referred to as a "RESTRICTED PAYMENT"), if at any time of such proposed
Restricted Payment or immediately after giving affect thereto, (a) a Default
or an Event of Default has occurred and is continuing or would result
therefrom, or (b) the Subsidiary is not, or would not be, able to incur at
least $1.00 of additional Indebtedness under [refer to section that restricts
Indebtedness in documentation evidencing Indebtedness in question], or (c) the
aggregate amount of Restricted Payments made subsequent to the date hereof
exceeds or would exceed the sum of (1) difference between (A) the cumulative
Consolidated EBITDA of the Subsidiary as of the date of such Restricted
Payment since the date hereof, minus (B) the product 2.25 times cumulative
Consolidated Interest Expense of the Subsidiary as of the date of such
Restricted Payment since the date hereof, PLUS (2) 100% of the aggregate net
proceeds received by the Subsidiary from sales of Capital Stock of the
Subsidiary since the date hereof (other than net proceeds from sales of
Disqualified Capital Stock), or (d) the aggregate amount of Restricted
Payments proposed to be made at such time exceeds the amount that is due and
payable (assuming no acceleration) in respect of those certain 13% Senior
Subordinated Discount Notes due 2006 issued by Coinstar, Inc. under the
Indenture dated October 1, 1996, during the calendar quarter in which such
determination is made. Notwithstanding the foregoing, the provisions set
forth above shall not prohibit the payment of any dividend within 60 days of
the date of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Agreement.
C-1
