EXHIBIT 4.1
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ADVANSTAR COMMUNICATIONS INC.,
THE GUARANTORS LISTED HEREIN,
AND
THE BANK OF NEW YORK,
as Trustee
9 1/4% Senior Subordinated Notes due 2008
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INDENTURE
Dated as of April 30, 1998
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Incorporation by Reference........................................... 1
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SECTION 1.1. Definitions............................................................................. 1
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SECTION 1.2. Other Definitions....................................................................... 19
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SECTION 1.3. Incorporation by Reference of Trust Indenture Act....................................... 20
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SECTION 1.4. Rules of Construction................................................................... 21
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ARTICLE II
The Securities....................................................................... 21
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SECTION 2.1. Form, Dating............................................................................ 21
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SECTION 2.2. Execution and Authentication............................................................ 28
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SECTION 2.3. Registrar and Paying Agent.............................................................. 29
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SECTION 2.4. Paying Agent To Hold Money in Trust..................................................... 30
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SECTION 2.5. Securityholder Lists.................................................................... 30
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SECTION 2.6. Transfer and Exchange................................................................... 30
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SECTION 2.7. Form of Certificate to be Delivered in Connection with Transfers to Institutional
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Accredited Investors................................................................. 33
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SECTION 2.8. Form of Certificate to be Delivered in Connection with Transfers Pursuant to
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Regulation S......................................................................... 35
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SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities......................................... 36
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SECTION 2.10. Outstanding Securities.................................................................. 37
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SECTION 2.11. Temporary Securities.................................................................... 37
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SECTION 2.12. Cancellation............................................................................ 38
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SECTION 2.13. Payment of Interest; Defaulted Interest................................................. 38
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SECTION 2.14. Computation of Interest................................................................. 39
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SECTION 2.15. CUSIP Numbers........................................................................... 39
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ARTICLE III
Covenants............................................................................ 40
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SECTION 3.1. Payment of Securities................................................................... 40
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SECTION 3.2. SEC Reports and Available Information................................................... 40
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SECTION 3.3. Limitation on Indebtedness.............................................................. 41
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SECTION 3.4. Limitation on Layering.................................................................. 42
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SECTION 3.5. Limitation on Restricted Payments....................................................... 42
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SECTION 3.6. Limitation on Restrictions on Distributions from Restricted Subsidiaries................ 45
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SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock...................................... 45
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SECTION 3.8. Limitation on Affiliate Transactions.................................................... 48
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SECTION 3.9. Change of Control....................................................................... 49
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SECTION 3.10. Limitation on Dispositions of Capital Stock of Restricted Subsidiaries.................. 51
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SECTION 3.11. Limitation on Liens..................................................................... 51
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SECTION 3.12. Future Subsidiary Guarantors............................................................ 52
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SECTION 3.13. Limitation on Lines of Business......................................................... 52
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SECTION 3.14. Limitation on Asset Swaps............................................................... 52
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SECTION 3.15. Maintenance of Office or Agency......................................................... 52
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SECTION 3.16. Corporate Existence..................................................................... 53
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SECTION 3.17. Payment of Taxes and Other Claims....................................................... 53
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SECTION 3.18. Compliance Certificate.................................................................. 53
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SECTION 3.19. Further Instruments and Acts............................................................ 54
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ARTICLE IV
Successor Company .......................................... 54
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SECTION 4.1. Merger and Consolidation................................................................ 54
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ARTICLE V
Redemption of Securities........................................ 55
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SECTION 5.1. Optional Redemption..................................................................... 55
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SECTION 5.2. Applicability of Article................................................................ 55
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SECTION 5.3. Election to Redeem; Notice to Trustee................................................... 55
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SECTION 5.4. Selection by Trustee of Securities to Be Redeemed....................................... 55
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SECTION 5.5. Notice of Redemption.................................................................... 56
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SECTION 5.6. Deposit of Redemption Price............................................................. 57
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SECTION 5.7. Notes Payable on Redemption Date........................................................ 57
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SECTION 5.8. Securities Redeemed in Part............................................................. 57
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ARTICLE VI
Defaults and Remedies.......................................... 58
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SECTION 6.1. Events of Default....................................................................... 58
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SECTION 6.2. Acceleration............................................................................ 60
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SECTION 6.3. Other Remedies.......................................................................... 60
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SECTION 6.4. Waiver of Past Defaults................................................................. 60
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SECTION 6.5. Control by Majority..................................................................... 61
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SECTION 6.6. Limitation on Suits..................................................................... 61
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SECTION 6.7. Rights of Holders to Receive Payment.................................................... 61
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SECTION 6.8. Collection Suit by Trustee.............................................................. 62
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SECTION 6.9. Trustee May File Proofs of Claim........................................................ 62
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SECTION 6.10. Priorities.............................................................................. 62
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SECTION 6.11. Undertaking for Costs................................................................... 62
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ARTICLE VII
Trustee.................................................. 63
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SECTION 7.1. Duties of Trustee....................................................................... 63
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SECTION 7.2. Rights of Trustee....................................................................... 64
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SECTION 7.3. Individual Rights of Trustee............................................................ 65
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SECTION 7.4. Trustee's Disclaimer.................................................................... 65
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SECTION 7.5. Notice of Defaults...................................................................... 65
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SECTION 7.6. Reports by Trustee to Holders........................................................... 65
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SECTION 7.7. Compensation and Indemnity.............................................................. 65
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SECTION 7.8. Replacement of Trustee.................................................................. 66
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SECTION 7.9. Successor Trustee by Merger............................................................. 67
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SECTION 7.10. Eligibility; Disqualification........................................................... 67
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SECTION 7.11. Preferential Collection of Claims Against Company....................................... 68
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ARTICLE VIII
Discharge of Indenture; Defeasance..................................... 68
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SECTION 8.1. Discharge of Liability on Securities; Defeasance........................................ 68
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SECTION 8.2. Conditions to Defeasance................................................................ 69
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SECTION 8.3. Application of Trust Money.............................................................. 70
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SECTION 8.4. Repayment to Company.................................................................... 70
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SECTION 8.5. Indemnity for U.S. Government Obligations............................................... 71
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SECTION 8.6. Reinstatement........................................................................... 71
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ARTICLE IX
Amendments................................................. 71
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SECTION 9.1. Without Consent of Holders.............................................................. 71
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SECTION 9.2. With Consent of Holders................................................................. 72
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SECTION 9.3. Compliance with Trust Indenture Act..................................................... 73
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SECTION 9.4. Revocation and Effect of Consents and Waivers........................................... 73
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SECTION 9.5. Notation on or Exchange of Securities................................................... 74
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SECTION 9.6. Trustee To Sign Amendments.............................................................. 74
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ARTICLE X
Subordination............................................... 74
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SECTION 10.1. Agreement To Subordinate................................................................ 74
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SECTION 10.2. Liquidation, Dissolution, Bankruptcy................................................... 74
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SECTION 10.3. Default on Senior Indebtedness......................................................... 75
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SECTION 10.4. Acceleration of Payment of Securities.................................................. 75
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SECTION 10.5. When Distribution Must Be Paid Over.................................................... 76
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SECTION 10.6. Subrogation............................................................................ 76
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SECTION 10.7. Relative Rights........................................................................ 76
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SECTION 10.8. Subordination May Not Be Impaired by Company........................................... 76
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SECTION 10.9. Rights of Trustee and Paying Agent..................................................... 76
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SECTION 10.10. Distribution or Notice to Representative............................................... 77
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SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To Accelerate................ 77
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SECTION 10.12. Trust Moneys Not Subordinated.......................................................... 77
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SECTION 10.13. Trustee Entitled To Rely............................................................... 77
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SECTION 10.14. Trustee To Effectuate Subordination.................................................... 78
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SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness............................... 78
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SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination Provisions................. 78
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ARTICLE XI
Guarantee................................................. 78
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SECTION 11.2. Limitation on Liability; Termination, Release and Discharge............................ 80
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SECTION 11.3. Right of Contribution.................................................................. 80
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SECTION 11.4. No Subrogation......................................................................... 81
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ARTICLE XII
Subordination of Note Guarantees...................................... 81
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SECTION 12.1. Agreement To Subordinate............................................................... 81
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SECTION 12.2. Liquidation, Dissolution, Bankruptcy................................................... 81
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SECTION 12.3. Default on Senior Indebtedness......................................................... 82
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SECTION 12.4. Acceleration of Payment of Securities.................................................. 82
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SECTION 12.5. When Distribution Must Be Paid Over.................................................... 83
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SECTION 12.6. Subrogation............................................................................ 83
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SECTION 12.7. Relative Rights........................................................................ 83
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SECTION 12.8. Subordination May Not Be Impaired by Guarantor......................................... 83
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SECTION 12.9. Rights of Trustee and Paying Agent..................................................... 83
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SECTION 12.10. Distribution or Notice to Representative............................................... 84
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SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate.............. 84
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SECTION 12.12. Trust Moneys Not Subordinated.......................................................... 84
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SECTION 12.13. Trustee Entitled To Rely............................................................... 84
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SECTION 12.14. Trustee To Effectuate Subordination.................................................... 85
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SECTION 12.15. Trustee Not Fiduciary for Holders of Senior Indebtedness............................... 85
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SECTION 12.16. Reliance on Subordination Provisions................................................... 85
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ARTICLE XIII
Miscellaneous............................................... 86
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SECTION 13.1. Trust Indenture Act Controls........................................................... 86
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SECTION 13.2. Notices................................................................................ 86
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SECTION 13.3. Communication by Holders with other Holders............................................ 87
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SECTION 13.4. Certificate and Opinion as to Conditions Precedent..................................... 87
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SECTION 13.5. Statements Required in Certificate or Opinion.......................................... 87
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SECTION 13.6. When Securities Disregarded............................................................ 87
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SECTION 13.7. Rules by Trustee, Paying Agent and Registrar........................................... 88
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SECTION 13.8. Legal Holidays......................................................................... 88
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SECTION 13.9. GOVERNING LAW.......................................................................... 88
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SECTION 13.10. No Recourse Against Others............................................................. 88
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SECTION 13.11. Successors............................................................................. 88
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SECTION 13.12. Multiple Originals..................................................................... 88
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SECTION 13.13. Variable Provisions.................................................................... 88
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SECTION 13.14. Qualification of Indenture............................................................. 88
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SECTION 13.15. Table of Contents; Headings............................................................ 89
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EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
vi
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1) ........................................................... 7.10
(a)(2) ........................................................... 7.10
(a)(3) ........................................................... N.A.
(a)(4) ........................................................... N.A.
(b) ........................................................... 7.8; 7.10
(c) ........................................................... N.A.
311(a) ........................................................... 7.11
(b) ........................................................... 7.11
(c) ........................................................... N.A.
312(a) ........................................................... 2.5
(b) ........................................................... 13.3
(c) ........................................................... 13.3
313(a) ........................................................... 7.6
(b)(1) ........................................................... N.A.
(b)(2) ........................................................... 7.6
(c) ........................................................... 7.6
(d) ........................................................... 7.6
314(a) ........................................................... 3.2; 13.2
(b) ........................................................... N.A.
(c)(1) ........................................................... 13.4
(c)(2) ........................................................... 13.4
(c)(3) ........................................................... N.A.
(d) ........................................................... N.A.
(e) ........................................................... 13.5
315(a) ........................................................... 7.1
(b) ........................................................... 7.5; 13.2
(c) ........................................................... 7.1
(d) ........................................................... 7.1
(e) ........................................................... 6.11
316(a)(last sentence) ........................................................... 13.6
(a)(1)(A) ........................................................... 6.5
(a)(1)(B) ........................................................... 6.4
(a)(2) ........................................................... N.A.
(b) ........................................................... 6.7
317(a)(1) ........................................................... 6.8
(a)(2) ........................................................... 6.9
(b) ........................................................... 2.4
318(a) ........................................................... 13.1
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
vii
INDENTURE dated as of April 30, 1998, among ADVANSTAR COMMUNICATIONS,
INC., a New York corporation (the "Company"), THE GUARANTORS (as defined) and
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The Bank of New York (the "Trustee").
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Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's 9 1/4% Senior
Subordinated Notes due 2008 (the "Initial Securities") and, if and when issued
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in exchange for Initial Securities as provided in the Registration Rights
Agreement (as hereinafter defined), the Company's 9 1/4% Senior Subordinated
Notes due 2008 (the "Exchange Securities" and, together with the Initial
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Securities, the "Securities"):
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ARTICLE I
Definitions and Incorporation by Reference
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SECTION I.1. Definitions.
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"Acquisitions" has the meaning set forth in the Company's Offering
Memorandum relating to the issuance of the Initial Securities dated April 27,
1998.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company; provided, however, that, in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"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 the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AHI" means Advanstar Holdings, Inc., a Delaware corporation.
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Restricted Subsidiary (other than directors' qualifying shares), property or
other assets (each referred to for the purposes of this definition as a
"disposition") by the Company or any of its Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to the Company or by the
Company or a Restricted Subsidiary to a Wholly-Owned Subsidiary Guarantor, (ii)
the sale of Cash Equivalents in the ordinary course of
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business, (iii) a disposition of inventory in the ordinary course of business,
(iv) a disposition of obsolete or worn out equipment or equipment that is no
longer useful in the conduct of the business of the Company and its Restricted
Subsidiaries and that is disposed of in each case in the ordinary course of
business, (v) transactions permitted under Section 4.1 of this Indenture, (vi)
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an Asset Swap effected in compliance with Section 3.14 of this Indenture, and
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(vii) for purposes of Section 3.7 of this Indenture only, a disposition subject
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to Section 3.5 of this Indenture.
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"Asset Swap" means the execution of a definitive agreement, subject
only to customary closing conditions that the Company in good faith believes
will be satisfied, for a concurrent purchase and sale or exchange of Related
Business Assets, between the Company or any of its Restricted Subsidiaries and
another Person, and the consummation of such purchase and sale or exchange;
provided that any amendment to or waiver of any closing condition which
individually or in the aggregate is material to any Asset Swap shall be deemed
to be a new Asset Swap that must comply with Section 3.14.
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"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded semi-annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding on
the Issue Date or thereafter Incurred, payable by the Company under or in
respect of the Senior Credit Agreement and any related notes, collateral
documents, letters of credit and guarantees, and any Interest Rate Agreement
entered into with a Lender (as defined in the Senior Credit Agreement) in
connection with the Senior Credit Agreement, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company at the rate
specified therein whether or not a claim for post filing interest is allowed in
such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banking institutions are authorized or required by law to
close in New York City.
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"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date such lease may be terminated without penalty.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.; (iii) certificates of deposit, time deposits,
eurodollar time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition thereof issued
by any commercial bank the long-term debt of which is rated at the time of
acquisition thereof at least "A" or the equivalent thereof by Standard & Poor's
Rating Group, or "A" or the equivalent thereof by Xxxxx'x Investors Service,
Inc., and having capital and surplus in excess of $500 million; (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (i), (ii) and (iii) entered into with any bank
meeting the qualifications specified in clause (iii) above; (v) commercial paper
rated at the time of acquisition thereof at least "A-2" or the equivalent
thereof by Standard & Poor's Rating Group or "P-2" or the equivalent thereof by
Xxxxx'x Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments, and in either case maturing within 270
days after the date of acquisition thereof; and (vi) interests in any investment
company which invests solely in instruments of the type specified in clauses (i)
through (v) above.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Advanstar Communications Inc. or a successor.
"Consolidated EBITDA" for any period means the Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, plus (ii) Consolidated Interest
Expense, plus (iii) depreciation expense, plus (iv) amortization of intangibles,
(v) other non-cash charges, including, without limitation, any non-cash charge
reflecting compensation expense relating to employee stock option or similar
plans, reducing Consolidated Net Income (excluding any such non-cash charge to
the extent it represents an accrual of or reserve for cash charges in any future
period or
4
amortization of a prepaid cash expense that was paid in a prior period not
included in the calculation), less (vi) non-cash items increasing Consolidated
Net Income (excluding any non-cash item to the extent it represents the reversal
of an accrual of, or a cash reserve for, anticipated cash charges in any prior
period). Notwithstanding the foregoing, the provision for taxes based on the
income or profits of, and the interest, depreciation and amortization of, a
Restricted Subsidiary of a Person shall be added to Consolidated Net Income to
compute Consolidated EBITDA of such Person only to the extent (and in the same
proportion) that the net income of such Subsidiary was included in calculating
the Consolidated Net Income of such Person.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Subsidiaries, plus, to the
extent not included in such interest expense, (i) interest expense attributable
to Capitalized Lease Obligations and the interest portion of rent expense
associated with Attributable Indebtedness in respect of the relevant lease
giving rise thereto, determined as if such lease were a capitalized lease in
accordance with GAAP, (ii) amortization of debt discount and debt issuance cost,
(iii) capitalized interest and accrued interest, (iv) non-cash interest expense,
(v) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, (vi) interest actually paid
by the Company or any such Subsidiary under any Guarantee of Indebtedness or
other obligation of any other Person, (vii) net costs associated with Hedging
Obligations (including amortization of fees), (viii) dividends in respect of all
Disqualified Stock of the Company and all Preferred Stock of Subsidiaries, in
each case, held by Persons other than the Company or a Wholly-Owned Subsidiary
and (ix) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than the Company) in connection with
Indebtedness Incurred by such plan or trust; provided, however, that there shall
be excluded therefrom any such interest expense of any Unrestricted Subsidiary
to the extent the related Indebtedness is not Guaranteed or paid by the Company
or any Restricted Subsidiary. For purposes of the foregoing, total interest
expense shall be determined after giving effect to any net payments made or
received by the Company and its Subsidiaries with respect to Interest Rate
Agreements. Notwithstanding the foregoing, the Consolidated Interest Expense
with respect to any Restricted Subsidiary of the Company that was not a Wholly-
Owned Subsidiary shall be included only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in
calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net income (loss)
of the Company and its consolidated Subsidiaries; provided, however, that there
shall be excluded for purposes of calculating Consolidated Net Income: (i) any
net income (loss) of any Person if such Person is not a Restricted Subsidiary,
except that (A) subject to the limitations contained in (iv) below, the
Company's equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (B) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period will be included in determining such Consolidated Net Income to the
extent such loss has been
5
funded with cash from the Company or a Restricted Subsidiary; (ii) any net
income (loss) of any Person acquired by the Company or a Subsidiary in a pooling
of interests transaction for any period prior to the date of such acquisition;
(iii) any net income of any Restricted Subsidiary if such Subsidiary is subject
to restrictions, directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or indirectly,
to the Company, except that (A) subject to the limitations contained in (iv)
below the Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary as
a dividend (subject, in the case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause) and (B) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income; (iv) any gain (loss) realized upon the
sale or other disposition of any property, plant or equipment of the Company or
its consolidated Subsidiaries (including pursuant to any Sale/Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary course
of business and any gain (loss) realized upon the sale or other disposition of
any Capital Stock of any Person; (v) any extraordinary gain or loss and (vi) the
cumulative effect of a change in accounting principles.
"Consolidated Tangible Assets" means, as of any date of determination,
the total assets, less goodwill, deferred financing costs and other intangibles
(in each case net of accumulated amortization), shown on the balance sheet of
the Company and its Restricted Subsidiaries as of the most recent date for which
such balance sheet is available, determined on a consolidated basis in
accordance with GAAP.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section 2.13.
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"Depositary" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Noncash Consideration" means noncash consideration
received by the Company or a Restricted Subsidiary in connection with an Asset
Disposition that is so designated as Designated Noncash Consideration pursuant
to an Officers' Certificate, setting forth the basis of determining the fair
market value thereof, executed by the principal executive officer and the
principal financial officer of the Company; provided, that in determining the
aggregate fair market value of Designated Noncash Consideration that is
outstanding from time to time, there shall be subtracted the aggregate amount of
cash or Cash Equivalents received in
6
connection with a sale of any Designated Noncash Consideration (which sale shall
be deemed an Asset Disposition, and which cash or Cash Equivalents must be
applied in accordance with Section 3.7).
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"Designated Senior Indebtedness" means (i) the Bank Indebtedness in
the case of the Company and (ii) any other Senior Indebtedness which, at the
date of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are committed to
lend up to, at least $25.0 million and is specifically designated in the
instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which 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 (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding capital stock which is convertible or exchangeable
solely at the option of the Company or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Securities, provided, that only
the portion of Capital Stock which so matures or is mandatorily redeemable, is
so convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such Stated Maturity shall be deemed to be Disqualified Stock.
"Equity Offering" means an offering for cash by the Company, Holdings
or AHI of its respective common stock, or options, warrants or rights with
respect to its common stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means, if and when issued in exchange for the
Initial Securities as provided in the Registration Rights Agreement, the
Company's 9 1/4% Senior Subordinated Notes due 2008.
"Foreign Subsidiary" means any Restricted Subsidiary that is not
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained in
this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or
7
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (ii)
entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit and
indemnities given by the Company or any of its Subsidiaries in connection with
exhibitions, in each case, in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each of AHI and Holdings (or, if AHI and Holdings
are merged, the surviving entity of such merger) and each Subsidiary Guarantor.
"Guarantor Senior Indebtedness" means, with respect to a Guarantor,
the following obligations, whether outstanding on the date of this Indenture or
thereafter issued, without duplication: (i) any Guarantee of the Bank
Indebtedness by such Guarantor and all other Guarantees by such Guarantor of
Senior Indebtedness of the Company or Guarantor Senior Indebtedness for any
other Guarantor; and (ii) all obligations consisting of the principal of and
premium, if any, and accrued and unpaid interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating
to the Guarantor regardless of whether postfiling interest is allowed in such
proceeding) on, and fees and other amounts owing in respect of, all other
Indebtedness of the Guarantor, unless, in the instrument creating or evidencing
the same or pursuant to which the same is outstanding, it is expressly provided
that the obligations in respect of such Indebtedness are not senior in right of
payment to the obligations of such Guarantor under the Note Guarantee; provided,
however, that Guarantor Senior Indebtedness shall not include (1) any
obligations of a Subsidiary Guarantor to another Subsidiary Guarantor, (2) any
liability for Federal, state, local, foreign or other taxes owed or owing by a
Guarantor, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities), (4) any Indebtedness of a Subsidiary
Guarantor that is expressly subordinate in right of payment to any of the
Indebtedness of such Guarantor, including any Guarantor Senior Subordinated
Indebtedness and Guarantor Subordinated Obligations of such Guarantor or (5) any
Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means with respect to a
Guarantor, the obligations of such Guarantor under the Note Guarantee and any
other Indebtedness of such Guarantor that specifically provides that such
Indebtedness is to rank pari passu in right of payment with the obligations of
such Guarantor under the Note Guarantee and is not expressly subordinated by its
terms in right of payment to any Indebtedness of such Guarantor which is not
Guarantor Senior Indebtedness of such Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Guarantor, any Indebtedness of such Guarantor (whether outstanding on the Issue
Date or thereafter Incurred)
8
which is expressly subordinate in right of payment to the obligations of such
Guarantor under its Note Guarantee pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered in the Note Register.
"Holdings" means AHI Holding Corp., a Delaware corporation.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
incurred by such Restricted Subsidiary at the time it becomes a Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), other than (except
for purposes of the cross-acceleration provisions described in Section 6.1)
-----------
obligations in respect of the undrawn face amount of letters of credit that are
the functional equivalents of surety or performance bonds or that support self-
insurance programs to the extent that the aggregate amount of all such
obligations does not exceed $3.0 million; (iv) all obligations of such Person to
pay the deferred and unpaid purchase price of property or services (other than
trade payables arising and accrued expenses Incurred in the ordinary course of
business), which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services (if and to the extent any such obligation would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP); (v) all Capitalized Lease Obligations and all Attributable
Indebtedness of such Person; (vi) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vii) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount of
such Indebtedness shall be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons; (viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and (ix) to the extent not otherwise included in this
definition, net obligations of such Person under Currency Agreements and
Interest Rate Agreements (the amount of any such obligations to be equal at any
time to the termination value of such agreement or arrangement giving rise to
such obligation that would be payable by such Person at such time). The amount
of Indebtedness of any Person at any date shall be the outstanding balance at
such date of all unconditional
9
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any one time of any
Indebtedness issued with original issue discount is the principal amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP. Notwithstanding the foregoing, Indebtedness shall exclude (i) obligations
created, issued or incurred by any Person with respect to customer subscription
payments or customer deposits for trade shows and exhibitions and (ii) any
indemnification obligation of the Company to third parties in respect of
customary representations and warranties contained in stock purchase, asset
purchase or similar acquisition agreements to which the Company is a party, if
such indemnification obligation would not appear as a liability upon a balance
sheet of the Company prepared in accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Appraiser" means, with respect to any transaction or
series of related transactions, an independent, nationally recognized appraisal
or investment banking firm or other expert with experience in evaluating or
appraising the terms and conditions of such transaction or series of related
transactions.
"Initial Securities" means the Company's 9 1/4% Senior Subordinated
Notes due 2008 issued under this Indenture.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business) or other
extension of credit (including by way of Guarantee or similar arrangement, but
excluding any debt or extension of credit represented by a bank deposit other
than a time deposit) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by, such Person. For purposes
of Section 3.5, (i) "Investment" shall include the portion (proportionate to the
Company's equity interest in a Restricted Subsidiary to be designated as an
Unrestricted Subsidiary) of the fair market value of the net assets of such
Restricted Subsidiary of the Company at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so redesignated a Restricted
10
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors of
the Company.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"Legal Holiday" has the meaning ascribed to it in Section 13.8.
------------
"Leverage Ratio" as of any date of determination means, with respect
to any Person, the ratio of (i) the sum of the aggregate outstanding
Indebtedness of such Person and its Subsidiaries as of the date of calculation
on a consolidated basis in accordance with GAAP to (ii) the aggregate amount of
Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination;
provided, however, that (1) if since the beginning of such period the Company or
any Restricted Subsidiary will have made any Asset Disposition or if the
transaction giving rise to the need to calculate the Leverage Ratio is an Asset
Disposition, the Consolidated EBITDA for such period will be reduced by an
amount equal to the Consolidated EBITDA (if positive) directly attributable to
the assets which are the subject of such Asset Disposition for such period or
increased by an amount equal to the Consolidated EBITDA (if negative) directly
attributable thereto for such period, (2) if since the beginning of such period
the Company or any Restricted Subsidiary (by merger or otherwise) will have made
an Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary or is merged with or into the Company) or an acquisition
of assets, including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, Consolidated EBITDA for
such period will be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness and including the pro forma expenses and cost
reductions calculated in accordance with Regulation S-X promulgated by the SEC)
as if such Investment or acquisition occurred on the first day of such period
and (3) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or any
Restricted Subsidiary since the beginning of such period) will have made any
Asset Disposition or any Investment or acquisition of assets that would have
required an adjustment pursuant to clause (1) or (2) above if made by the
Company or a Restricted Subsidiary during such period, Consolidated EBITDA for
such period will be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness and including the pro forma expenses and cost
reductions calculated in accordance with Regulation S-X promulgated by the SEC)
as if such Asset Disposition or Investment occurred on the first day of such
period. For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings relating
thereto, the pro forma calculations will be determined in good faith by a
responsible financial or accounting officer of the Company. Notwithstanding
anything herein to the contrary, if at the time the calculation of the Leverage
Ratio is to be made, the Company does not have available consolidated financial
statements reflecting the consummation of the Acquisitions for a period of at
least four full fiscal quarters, all calculations required by the Leverage Ratio
shall be prepared on a pro forma basis in accordance with Regulation S-X
promulgated by the SEC, as though each of the Acquisitions (to the extent not
otherwise reflected in the consolidated financial statements of the Company) had
11
occurred on the first day of the period of four fiscal quarters for which such
calculation is being made.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form whether or not constituting Designated
Noncash Consideration) therefrom, in each case net of (i) all legal, accounting,
investment banking, title and recording tax expenses, commissions and other fees
and expenses Incurred, and all Federal, state, provincial, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law be
repaid out of the proceeds from such Asset Disposition, (iii) all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Disposition and (iv)
the deduction of appropriate amounts to be provided by the seller as a reserve,
in accordance with GAAP, against any liabilities associated with the assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually Incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any Restricted Subsidiary (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity, agreement
or instrument that would constitute Indebtedness) or (b) is directly or
indirectly liable (as a guarantor or otherwise) and (ii) no default with respect
to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
12
"Non-U.S. Person" means a person who is not a U.S person, as defined
in Regulation S.
"Note Guarantee" means, individually, the guarantee of payment of the
Notes by Holdings and AHI (or, if they are merged, the surviving entity of such
merger) and the Subsidiary Guarantors set forth in Article XI and any additional
Guarantee of the Securities executed by any Subsidiary of the Company as
evidenced by a supplemental indenture.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to Section 2.3.
-----------
"Obligations" has the meaning ascribed to it in Section 11.1.
------------
"Officer" means the Chairman of the Board, the President, Chief
Financial Officer, any Vice President, the Treasurer or the Secretary of the
Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Holders" means each of (i) AHI Advanstar L.L.C., a Delaware
limited liability company, and partnerships in which the ultimate managing
partner is controlled by, or (ii) other entities controlled by, members of
Xxxxxxx & Xxxxxxxx LLC, a Delaware limited liability company, or any successor
entity, and shall in any event include Xxxxxxx and Xxxxxxxx Capital Partners
III, L.P., H&F International Partners III, L.P., and H&F Orchard Partners III,
L.P.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Restricted Subsidiary or a Person which will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related Business;
(iii) cash and Cash Equivalents; (iv) receivables owing to the Company or any
Restricted Subsidiary created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; provided,
however, that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances; (v) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;
(vi) loans or advances to employees made in the ordinary course of business not
exceeding in the aggregate, at any time, $1.0 million; (vii) stock, obligations
or securities received in settlement of debts created in the ordinary course of
business and owing to
13
the Company or any Restricted Subsidiary or in satisfaction of judgments; (viii)
any Asset Swap made in accordance with Section 3.14 or any Investment in
------------
securities or other assets received in connection with an Asset Disposition made
in accordance with the provisions of Section 3.7; (ix) Investments made after
-----------
the Issue Date in a Related Business in the form of joint ventures, operating
agreements, partnership agreements or other similar or customary agreements,
interests or arrangements with unaffiliated third parties, the aggregate
outstanding amount of which does not exceed $25.0 million (which aggregate
amount outstanding will be reduced by returns of capital received by the Company
or any Restricted Subsidiary in respect of such Investments) at any time; (x)
Currency Agreements, Interest Rate Agreements and related Hedging Obligations,
which transactions or obligations are Incurred in compliance with Section 3.3;
-----------
and (xi) other Investments in an aggregate amount outstanding at any time not to
exceed $5.0 million.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by law,
including carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings; or
other Liens arising out of judgments or awards against such Person with respect
to which such Person shall then be proceeding with an appeal or other
proceedings for review; (c) Liens for taxes, assessments or other governmental
charges not yet subject to penalties for non-payment or which are being
contested in good faith by appropriate proceedings provided appropriate reserves
have been taken on the books of the Company; (d) Liens in favor of issuers of
surety bonds or letters of credit issued pursuant to the request of and for the
account of such Person in the ordinary course of its business; provided,
however, that such letters of credit do not constitute Indebtedness; (e)
encumbrances, easements or reservations of, or rights of others for, licenses,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real
properties or liens incidental to the conduct of the business of such Person or
to the ownership of its properties which do not in the aggregate materially
adversely affect the value of said properties or materially impair their use in
the operation of the business of such Person; (f) Liens securing an Interest
Rate Agreement so long as the related Indebtedness is, and is permitted to be
under this Indenture, secured by a Lien on the same property securing the
Interest Rate Agreement; (g) leases and subleases of real property which do not
materially interfere with the ordinary conduct of the business of the Company or
any of its Restricted Subsidiaries; (h) judgment Liens not giving rise to an
Event of Default so long as such Lien is adequately bonded and any appropriate
legal proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired; (i) Liens for the purpose
of securing the payment (or the refinancing of the payment) of all or a part of
the purchase price of, or Capitalized Lease Obligations with respect to assets
or property acquired or constructed in the ordinary course of business provided
that (x) the aggregate principal amount of Indebtedness secured by such Liens is
otherwise permitted to be Incurred
14
under this Indenture and shall not exceed the cost of the assets or property so
acquired or constructed and (y) such Liens are created within 180 days of
construction or acquisition of such assets or property and shall not encumber
any other assets or property of the Company or any Restricted Subsidiary other
than such assets or property and assets affixed or appurtenant thereto; (j)
Liens arising solely by virtue of any statutory or common law provision relating
to banker's Liens, rights of set-off or similar rights and remedies as to
deposit accounts or other funds maintained with a creditor depository
institution; provided that (x) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against access by the
Company in excess of those set forth by regulations promulgated by the Federal
Reserve Board, and (y) such deposit account is not intended by the Company or
any Restricted Subsidiary to provide collateral to the depository institution;
(k) Liens arising from Uniform Commercial Code financing statement filings
regarding operating leases entered into by the Company and its Restricted
Subsidiaries in the ordinary course of business (l) Liens existing on the Issue
Date; (m) Liens on property or shares of stock of a Person at the time such
Person becomes a Subsidiary; provided, however, that such Liens are not created,
Incurred or assumed in connection with, or in contemplation of, such other
Person becoming a Subsidiary; provided further, however, that any such Lien may
not extend to any other property owned by the Company or any Restricted
Subsidiary; (n) Liens on property at the time the Company or a Subsidiary
acquired the property, including any acquisition by means of a merger or
consolidation with or into the Company or any Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in connection
with, or in contemplation of, such acquisition; provided further, however, that
such Liens may not extend to any other property owned by the Company or any
Restricted Subsidiary; (o) Liens securing Indebtedness or other obligations of a
Subsidiary owing to the Company or a Wholly-Owned Subsidiary; and (p) Liens
securing Refinancing Indebtedness Incurred to Refinance Indebtedness that was
previously so secured, provided that any such Lien is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision hereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Securities" shall have the meaning set forth in the
Registration Rights Agreement.
A "Public Market" exists at any time with respect to the common stock
of the Company,
15
Holdings or AHI, as the case may be, if (i) the common stock of the Company,
Holdings or AHI, as the case may be, is then registered with the Commission
pursuant to Section 12(b) or 12(g) of the Exchange Act and traded either on a
national securities exchange or in the National Association of Securities
Dealers Automated Quotation System and (ii) at least 15% of the total issued and
outstanding common stock of the Company, Holdings or AHI, as the case may be,
has been distributed prior to such time by means of an effective registration
statement under the Securities Act.
"Purchase Money Indebtedness" of any person means any Indebtedness of
such person to any seller or other person incurred to finance the acquisition or
construction (including in the case of a Capitalized Lease Obligation, the
lease) of any business or real or personal tangible property (or, in each case,
any interest therein) acquired or constructed after the Issue Date which, in the
reasonable good faith judgment of the Board of Directors of the Company is
related to a Related Business of the Company and which is incurred concurrently
with, or within 180 days of, such acquisition or the completion of such
construction and, if secured, is secured only by the assets so financed.
"QIB" means any "qualified institutional buyer" (as defined in Rule
144A under the Securities Act).
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness, provided, however, that (i) (x) if the
Stated Maturity of the Indebtedness being refinanced is earlier than the Stated
Maturity of the Securities, the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced or (y)
if the Stated Maturity of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a Stated
Maturity later than the Securities, (ii) the Refinancing Indebtedness has an
Average Life at the time such Refinancing Indebtedness is Incurred that is equal
to or greater than the Average Life of the Indebtedness being refinanced, and
(iii) such Refinancing Indebtedness is Incurred in an aggregate principal amount
(or if issued with original issue discount, an aggregate issue price) that is
equal to or less than the sum of the aggregate principal amount (or if issued
with original issue discount, the aggregate accreted value) then outstanding
(plus fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced.
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement, dated April 30, 1998, among the Company, the Guarantors, Chase
Securities Inc. and Xxxxxx Brothers Inc.
16
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Related Business Assets" means assets used or useful in a Related
Business.
"Representative" means any trustee, agent or representative (if any)
of an issue of Senior Indebtedness.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend set
forth in clause (A) of Section 2.1(c) or the Regulation S Legend set forth in
--------------
clause (B) of Section 2.1(c), as applicable.
--------------
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Subsidiary leases it
from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depositary), or any successor Person thereto and
shall initially be the Trustee.
"Senior Credit Agreement" means (i) the amended and restated Senior
Secured Credit Agreement to be entered into on the Issue Date among the Company,
the guarantors parties thereto, The Chase Manhattan Bank, as Administrative
Agent, and the lenders parties thereto from time to time, as the same may be
amended, supplemented or otherwise modified from time to time and any guarantees
issued thereunder and (ii) any renewal, extension, refunding, restructuring,
replacement or refinancing thereof (whether with the original Administrative
Agent and lenders or another administrative agent or agents or other lenders,
whether provided under the original Senior Credit Agreement or any other credit
or other
17
agreement or indenture and whether entered into concurrently with or subsequent
to the termination of the prior Senior Credit Agreement).
"Senior Indebtedness" means, whether outstanding on the Issue Date or
thereafter issued, created, incurred or assumed, the Bank Indebtedness and all
other Indebtedness of the Company, including accrued and unpaid interest thereon
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the rate specified
in the documentation with respect thereto whether or not a claim for post filing
interest is allowed in such proceeding) and fees relating thereto, unless, in
the instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that the obligations in respect of such Indebtedness
are not superior in right of, or are subordinate to, payment of the Securities;
provided, however, that Senior Indebtedness will not include (i) any obligation
of the Company to any Subsidiary, (ii) any liability for Federal, state,
foreign, local or other taxes owed or owing by the Company, (iii) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including Guarantees thereof or instruments evidencing such
liabilities), (iv) any Indebtedness, Guarantee or obligation of the Company that
is expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of the Company, including any Senior
Subordinated Indebtedness and any Subordinated Obligations or (v) any Capital
Stock.
"Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank pari passu with the Securities in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsequent Series Securities" has the meaning ascribed to it in
Section 2.2.
-----------
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person. Unless
18
otherwise specified herein, each reference to a Subsidiary shall refer to a
Subsidiary of the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment
of the Securities by a Subsidiary Guarantor pursuant to the terms of this
Indenture, and, collectively, all such Guarantees.
"Subsidiary Guarantor" means each Subsidiary of the Company (other
than a Foreign Subsidiary) in existence on the Issue Date and any Restricted
Subsidiary (other than a Foreign Subsidiary) created or acquired by the Company
after the Issue Date.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939
(15 U.S.C. (S)(S) 77aaa-77bbbb), as in effect on the date of this Indenture.
------
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Company or any Restricted Subsidiary of the Company
that is not a Subsidiary of the Subsidiary to be so designated; provided,
however, that either (A) the Subsidiary to be so designated has total
consolidated assets of $10,000 or less or (B) if such Subsidiary has
consolidated assets greater than $10,000, then such designation would be
permitted under Section 3.5. The Board of Directors may designate any
-----------
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could Incur
$1.00 of additional Indebtedness pursuant to Section 3.3 (a) and (y) no Default
---------------
shall have occurred and be continuing. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America
19
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of the United States of America is pledged and which are
not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the
Company, all of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Company or another Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary Guarantor" means a Wholly-Owned Subsidiary
which is a Subsidiary Guarantor.
SECTION I.2. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Affiliate Transaction".................................... 3.8
"Agent Member"............................................. 2.1(d)
"Authenticating Agent"..................................... 2.2
"Bankruptcy Law"........................................... 6.1
"Blockage Notice".......................................... 10.3
"Change of Control"........................................ 3.9
"Change of Control Offer".................................. 3.9
"Change of Control Payment"................................ 3.9
"Change of Control Payment Date"........................... 3.9
"Company Order"............................................ 2.2
"covenant defeasance option"............................... 8.1(b)
"Custodian"................................................ 6.1
"Definitive Securities".................................... 2.1(e)
"Event of Default"......................................... 6.1
"Excess Proceeds".......................................... 3.7
"Exchange Global Note"..................................... 2.1
"Global Securities"........................................ 2.1(a)
"Institutional Accredited Investor Global Note"............ 2.1
"Institutional Accredited Investor Note"................... 2.1
"legal defeasance option".................................. 8.1(b)
"Offer".................................................... 3.7
"Offer Amount"............................................. 3.7
"Offer Period"............................................. 3.7
"pay the Securities"....................................... 10.3
20
"Paying Agent"............................................. 2.3
"Payment Blockage Period".................................. 10.3
"Private Placement Legend"................................. 2.1(c)
"Purchase Date"............................................ 3.7
"Registrar"................................................ 2.3
"Regulation S"............................................. 2.1(a)
"Regulation S Certificate"................................. 2.1
"Regulation S Global Note"................................. 2.1
"Regulation S Legend"...................................... 2.1
"Regulation S Note"........................................ 2.1
"Regulation S Permanent Global Note"....................... 2.1
"Regulation S Temporary Global Note"....................... 2.1
"Release Date"............................................. 2.1
"Resale Restriction Termination Date"...................... 2.6
"Restricted Payment"....................................... 3.5
"Rule 144A"................................................ 2.1(b)
"Rule 144A Global Note".................................... 2.1
"Rule 144A Note"........................................... 2.1
"Special Interest Payment Date"............................ 2.13
"Special Record Date"...................................... 2.13
"Successor Company"........................................ 4.1
SECTION I.3. Incorporation by Reference of Trust Indenture Act. This
-------------------------------------------------
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
21
SECTION I.4. 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) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
The Securities
--------------
SECTION II.1. Form, Dating and Terms. (a) The Initial Securities
----------------------
are being offered and sold by the Company pursuant to a Purchase Agreement,
dated April 27, 1998, among the Company, the Guarantors, Chase Securities Inc.
and Xxxxxx Brothers Inc.
Initial Securities offered and sold to the qualified institutional
buyers (as defined in Rule 144A under the Securities Act ("Rule 144A")) in the
---------
United States of America (the "Rule 144A Note") will be issued on the Issue Date
--------------
in the form of a permanent global Security substantially in the form of Exhibit
-------
A, which is hereby incorporated by reference and made a part of this Indenture,
-
together with appropriate legends as set forth in Section 2.1(c) (the "Rule
-------------- ----
144A Global Note"), deposited with the Trustee, as custodian for the Depositary,
----------------
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The Rule 144A Global Note may be represented by more than one
certificate, if so required by the Depositary's rules regarding the maximum
principal amount to be represented by a single certificate. The aggregate
principal amount of the Rule 144A Global Note may from time to time be increased
or
22
decreased by adjustments made on the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States of
America ("Regulation S Note") in reliance on Regulation S will be issued on the
-----------------
Issue Date in the form of a temporary global Security, without interest coupons,
substantially in the form set forth in Exhibit A, which are hereby incorporated
---------
by reference and made a part of this Indenture, together with appropriate
legends as set forth in Section 2.1(c) (a "Regulation S Temporary Global Note").
-------------- ----------------------------------
Beneficial interests in a Regulation S Temporary Global Note will be
exchangeable for beneficial interests in a single permanent global security (the
"Regulation S Permanent Global Note", together with the Regulation S Temporary
----------------------------------
Global Note, the "Regulation S Global Note") on or after the expiration of the
------------------------
Restricted Period (the "Release Date") upon the receipt by the Trustee or its
------------
agent of a certificate certifying that the Holder of the beneficial interest in
the Regulation S Temporary Global Note is a non-United States Person within the
meaning of Regulation S (a "Regulation S Certificate"), substantially in the
------------------------
form set forth in Section 2.8. Upon receipt by the Trustee or Paying Agent of a
-----------
Regulation S Certificate, (i) with respect to the first such Regulation S
Certificate, the Company shall execute and upon receipt of a Company Order for
authentication, the Authenticating Agent (as defined in Section 2.2) shall
-----------
authenticate and deliver to the custodian, the applicable Regulation S Permanent
Global Note and (ii) with respect to the first and all subsequent Regulation S
Certificates, the custodian shall exchange on behalf of the applicable
beneficial owners the portion of the applicable Regulation S Temporary Global
Note covered by such Regulation S Certificates for a comparable portion of the
applicable Regulation S Permanent Global Note. Upon any exchange of a portion
of a Regulation S Temporary Global Note for a comparable portion of a Regulation
S Permanent Global Note, the custodian shall endorse on the schedules affixed to
each of such Regulation S Global Note (or on continuations of such schedules
affixed to each of such Regulation S Global Note and made parts thereof)
appropriate notations evidencing the date of transfer and (x) with respect to
the applicable Regulation S Temporary Global Note, a decrease in the principal
amount thereof equal to the amount covered by the applicable certification and
(y) with respect to the applicable Regulation S Permanent Global Note, an
increase in the principal amount thereof equal to the principal amount of the
decrease in the applicable Regulation S Temporary Global Note pursuant to clause
(x) above. The Regulation S Global Note will be deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Regulation S Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Regulation S Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Securities resold to institutional "accredited investors" (as
defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) in the
United States of America (the "Institutional Accredited Investor Note") will be
--------------------------------------
issued in the form of a permanent global Security substantially in the form of
Exhibit A, which is hereby incorporated by reference and made a part of this
Indenture, together with appropriate legends as set forth in Section 2.1(c) (the
--------------
"Institutional Accredited Investor Global Note") deposited with the Trustee, as
---------------------------------------------
custodian for the
23
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Institutional Accredited Investor Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Institutional Accredited
Investor Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A Note, the
Regulation S Note and the Institutional Accredited Investor Note will be issued
in the form of a permanent global Security substantially in the form of Exhibit
B, which is hereby incorporated by reference and made a part of this Indenture,
deposited with the Trustee as hereinafter provided, with the appropriate legend
set forth in Section 2.1(c) (the "Exchange Global Note"). The Exchange Global
-------------- --------------------
Note may be represented by more than one certificate, if so required by the
Depositary's rules regarding the maximum principal amount to be represented by a
single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the Exchange
Global Note and the Institutional Accredited Investor Global Note are sometimes
collectively herein referred to as the "Global Securities."
-----------------
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose pursuant to Section 2.3; provided,
-----------
however, that, at the option of the Company, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee.
The Private Exchange Securities shall be in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibits A and B
----------------
and in Section 2.1(c). The Company and the Trustee shall approve the forms of
--------------
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
--------- ---------
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in fully
-------------
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security is
-------------------
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement, (A) such
Rule 144A Global Note and the Institutional Accredited Investor
24
Global Note shall bear the following legend (the "Private Placement Legend") on
------------------------
the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION
S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION
INVOLVING A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SECURITIES, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST
25
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."; and
(B) the Regulation S Global Note shall bear the following legend (the
"Regulation S Legend") on the face thereof:
-------------------
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN TRANSACTION INVOLVING A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF
THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT
TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM AND IN THE CASE OF
26
THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING
ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE COMPANY AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED
AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE
DAY ON WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS
(AS DEFINED IN REGULATION S) AND (B) THE DATE OF THE CLOSING OF THE
ORIGINAL OFFERING. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT."
The Global Securities, whether or not an Initial Security, shall bear
the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
The Regulation S Temporary Global Note shall also bear the following
legend on the face thereof:
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE
REFERRED TO BELOW.
27
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall apply only
--------------------- --------------
to Global Securities deposited with the Trustee, as custodian for the
Depositary.
(ii) Each Global Security initially shall (x) be registered in the
name of the Depositary for such Global Security or the nominee of such
Depositary, (y) be delivered to the Trustee as custodian for such Depositary and
(z) bear legends as set forth in Section 2.1(c).
--------------
(iii) Members of, or participants in, the Depositary ("Agent
-----
Members") shall have no rights under this Indenture with respect to any Global
-------
Security held on their behalf by the Depositary or by the Trustee as the
custodian of the Depositary or under such Global Security, and the Depositary
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities, the Security
Trustee shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in such Global Security, an equal aggregate principal amount
of Definitive Securities of authorized denominations.
(e) Definitive Securities. Except as provided below, owners of
---------------------
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so
---------------------
pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with the Depositary's and the
Registrar's procedures. In addition, Definitive Securities shall be transferred
to all beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is
28
unwilling or unable to continue as Depositary for such Global Security or the
Depositary ceases to be a clearing agency registered under the Exchange Act, at
a time when the Depositary is required to be so registered in order to act as
Depositary, and in each case a successor depositary is not appointed by the
Company within 90 days of such notice or, (ii) the Company executes and delivers
to the Trustee and Registrar an Officers' Certificate stating that such Global
Security shall be so exchangeable or (iii) an Event of Default has occurred and
is continuing and the Registrar has received a request from the Depositary.
(f) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(d)(iv) or (v) shall, except as
-------------------------
otherwise provided by Section 2.6(c), bear the applicable legend regarding
--------------
transfer restrictions applicable to the Definitive Security set forth in Section
-------
2.1(c).
------
(g) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
SECTION II.2. Execution and Authentication. One Officer shall sign
----------------------------
the Securities for the Company by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Initial Securities for original issue on the Issue Date in an aggregate
principal amount of $150.0 million, (2) Exchange Securities for issue only in a
Registered Exchange Offer pursuant to the Registration Rights Agreement, and
only in exchange for Initial Securities of an equal principal amount, and (3)
additional series of notes which may be offered subsequent to the Issue Date
(the "Subsequent Series Securities") in an aggregate principal amount not to
exceed $100,000,000, in each case upon a written order of the Company signed by
two Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company (the "Company Order"). Such Company Order shall
-------------
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities or Exchange Securities. The aggregate
principal amount of notes which may be authenticated and delivered under this
Indenture is limited to $250.0 million outstanding except as provided in Section
-------
2.9. No Subsequent Series Securities may be authenticated and delivered in an
---
aggregate principal amount of less than $25,000,000. All Securities issued on
the Issue Date and all Subsequent Series Securities shall be identical in all
respects other than issue dates, the date from which interest accrues and any
changes relating thereto. Notwithstanding
29
anything to the contrary contained in this Indenture, all notes issued under
this Indenture shall vote and consent together on all matters as one class and
no series of notes will have the right to vote or consent as a separate class on
any matter.
The Trustee may appoint an agent (the "Authenticating Agent")
--------------------
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company, pursuant to Article IV, shall be consolidated or
merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition as aforesaid, shall have executed an indenture supplemental hereto
with the Trustee pursuant to Article IV, any of the Securities authenticated or
delivered prior to such consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Order of
the successor Person, shall authenticate and deliver Securities as specified in
such order for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section 2.2 in exchange or substitution for or upon registration of
-----------
transfer of any Securities, such successor Person, at the option of the Holders
but without expense to them, shall provide for the exchange of all Securities at
the time outstanding for Securities authenticated and delivered in such new
name.
SECTION II.3. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
---------
Securities may be presented for payment (the "Paying Agent"). The Company shall
------------
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
----
Register"). The Company may have one or more co-registrars and one or more
--------
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of each such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
-----------
The Company or
30
any of its domestically incorporated Wholly-Owned Subsidiaries may act as Paying
Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION II.4. Paying Agent To Hold Money in Trust. By at least 10:00
-----------------------------------
a.m (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Guarantor in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate the money held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require a Paying Agent (other than the Trustee) to pay all money held
by it to the Trustee and to account for any funds disbursed by such Paying
Agent. Upon complying with this Section, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money delivered
to the Trustee. Upon any bankruptcy, reorganization or similar proceeding with
respect to the Company, the Trustee shall serve as Paying Agent for the
Securities.
SECTION II.5. Securityholder 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 Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing 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 Securityholders.
SECTION II.6. Transfer and Exchange.
---------------------
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior
to the date which is two years after the later of the date of original issue and
the last date on which the Company or any affiliate of the Company was the owner
of such Securities (or any predecessor thereto) (the "Resale Restriction
------------------
Termination Date"):
----------------
(i) a transfer of an Institutional Accredited Investor Note or
a beneficial interest therein to a QIB shall be made upon the
representation of the transferee in the form of an assignment on the
reverse of the certificate that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional
buyer" within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the
31
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or a beneficial interest
therein to an institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 from the proposed transferee and, if requested by the
-----------
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.8 from the
-----------
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them.
(b) The following provisions shall apply with respect to any proposed
transfer of a Regulation S Note prior to the expiration of the Restricted
Period:
(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee,
in the form of assignment on the reverse of the certificate, that it is
purchasing the Security for its own account or an account with respect to
which it exercises sole investment discretion and that it and any such
account is a "qualified institutional buyer" within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an institutional accredited investor shall be made upon receipt
by the Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 from the proposed transferee and, if requested by the
-----------
Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them; and
After the expiration of the Restricted Period, interests in the
Regulation S Note shall be freely transferable.
(c) Restricted Securities Legend. Upon the transfer, exchange or
----------------------------
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
32
bear a Restricted Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) The Company shall deliver to the Trustee an Officer's Certificate
setting forth the Resale Restriction Termination Date and the Restricted Period.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.1 or this Section 2.6.
----------- -----------
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the
Company shall, subject to the other terms and conditions of this Article
II, execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-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, assessments, or similar
governmental charge payable in connection therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.7, 3.9 or 9.5).
------------ --- ---
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period beginning
(1) 15 days before the mailing of a notice to redeem Securities and ending
at the close of business on the day of such mailing or (2) 15 days before
an interest payment date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar may deem and treat the person in whose name a Security
is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall, except as
--------------
otherwise provided by Section 2.6(c), bear the applicable legend regarding
--------------
transfer restrictions applicable to the Definitive Security set forth in
Section 2.1(c).
--------------
33
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and
shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) The Trustee shall have no
----------------------------
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depositary or other Person with respect to
the accuracy of the records of the Depositary or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the payment of any amount or delivery of
any Securities (or other security or property) under or with respect to such
Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders in respect of the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary.
The Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION II.7. Form of Certificate to be Delivered in Connection with
------------------------------------------------------
Transfers to Institutional Accredited Investors.
-----------------------------------------------
[Date]
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 9 1/4% Senior Subordinated Notes due 2008 (the
"Securities") of Advanstar Communications Inc. (the "Company").
34
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Securities of $250,000 or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act, subject in
each of the foregoing cases to any requirement of law that the disposition of
our property or the property of such investor account or accounts be at all
times within our or their control and in compliance with any applicable state
securities laws. The foregoing restrictions on resale will not apply subsequent
to the Resale Restriction Termination Date. If any resale or other transfer of
the Securities is proposed to be made pursuant to clause (e) above prior to the
Resale Restriction Termination Date, the transferor shall deliver a letter from
the transferee substantially in the form of this letter to the Company and the
Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the Securities
Act. Each purchaser acknowledges that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Termination
Date of the Securities pursuant to clauses (d), (e) or (f) above to require the
delivery of an opinion of counsel, certifications and/or other information
satisfactory to the Company and the Trustee.
35
TRANSFEREE:_____________________
BY______________________________
Signature Medallion Guaranteed
SECTION II.8. Form of Certificate to be Delivered in Connection with
------------------------------------------------------
Transfers Pursuant to Regulation S.
----------------------------------
[Date]
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Re: Advanstar Communications Inc.
9 1/4% Senior Subordinated Notes due 2008 (the "Securities")
------------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in the
United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such
36
sale has been made in accordance with the applicable provisions of Rule
903(c)(3) or Rule 904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature Signature Medallion Guaranteed
SECTION II.9. Mutilated, Destroyed, Lost or Stolen Securities. If a
-----------------------------------------------
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any co-
registrar from any loss which any of them may suffer if a Security is replaced,
and, in the absence of notice to the Company, any Subsidiary Guarantor or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
make available for delivery, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities,
37
whether or not the mutilated, destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION II.10. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event
the Company or an Affiliate of the Company holds the Security provided, however,
that in determining whether the Trustee shall be protected in making a
determination whether the holders of the requisite principal amount of
outstanding Securities are present at a meeting of holders of Securities for
quorum purposes or have consented to or voted in favor of any request, demand,
authorization, direction, notice, consent, waiver, amendment or modification
hereunder, or relying upon any such quorum, consent or vote, only Securities
which the Trustee actually knows to be held by the Company or an Affiliate of
the Company shall not be considered outstanding.
If a Security is replaced pursuant to Section 2.9, it ceases to be
-----------
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION II.11. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
38
SECTION II.12. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Company all Securities surrendered for registration of transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
SECTION II.13. Payment of Interest; Defaulted Interest. Interest on
---------------------------------------
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 2.3.
-----------
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having been such Holder, and such defaulted interest and (to
the extent lawful) interest on such defaulted interest at the rate borne by the
Securities (such defaulted interest and interest thereon herein collectively
called "Defaulted Interest") shall be paid by the Company, at its election in
------------------
each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment (the "Special Interest Payment Date"), and
-----------------------------
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "Special Record Date") for the payment of such
-------------------
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in Section 13.2, not less than 10 days prior to such
------------
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be
39
paid on the Special Interest Payment Date to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION II.14. Computation of Interest. Interest on the Securities
-----------------------
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION II.15. CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such CUSIP
numbers.
40
In the event that the Company shall issue and the Trustee shall
authenticate any Subsequent Series Securities pursuant to Section 2.2, the
Company shall use its best efforts to obtain the same CUSIP number for such
Subsequent Series Securities as is printed on the Securities outstanding at such
time; provided, however, that if any series of Subsequent Series Securities is
--------
determined, pursuant to an Opinion of Counsel, to be a different class of
security than the Securities outstanding at such time for federal income tax
purposes, the Company may obtain a CUSIP number for such series of Subsequent
Series Securities that is different from the CUSIP number printed on the
Securities then outstanding.
ARTICLE III
Covenants
---------
SECTION III.1. Payment of Securities. The Company shall promptly pay
---------------------
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION III.2. SEC Reports and Available Information.
-------------------------------------
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13(a) or 15(d) of the Exchange Act, to the extent
permitted by the Exchange Act, the Company will file with the SEC, and provide,
within 15 days after the Company is or would be required to file the same with
the SEC, the Trustee and the holders of Securities with the annual reports and
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may, by rules and regulations prescribe), that are
specified in Sections 13 and 15(d) of the Exchange Act. In the event that the
Company is not permitted to file such reports, documents and information with
the SEC pursuant to the Exchange Act, the Company will nevertheless deliver such
Exchange Act information to the Trustee and the holders of the Securities as if
the Company were subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act. In addition, for so long as any of the Securities remain
outstanding the Company shall make available to any prospective purchaser of the
Securities or beneficial owner of the Securities in connection with any sale
thereof the information required by Rule 144A(d)(4) under the
41
Securities Act. The Company shall also comply with the other provisions of TIA
(S) 314(a). 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 its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION III.3. Limitation on Indebtedness. (a) The Company shall
--------------------------
not, and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that the Company and its Restricted
Subsidiaries which are Subsidiary Guarantors may Incur Indebtedness if on the
date thereof, after giving pro forma effect to the incurrence of such
Indebtedness, the Leverage Ratio for the Company and its Restricted Subsidiaries
is less than (i) 6.50 to 1.00, if such Indebtedness is Incurred on or prior to
the second anniversary of the Issue Date, and (ii) 6.00 to 1.00, if such
Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a) the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to the Senior Credit Agreement of (x) up to $210.0 million in
term loan borrowings outstanding at any time and (y) up to $60.0 million in
revolving credit borrowings outstanding at any time; (ii) the Subsidiary
Guarantees and Guarantees of Indebtedness Incurred pursuant to paragraph (a) or
clause (i) of this paragraph (b); (iii) Indebtedness of the Company owing to and
held by any Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary
owing to and held by the Company or any Wholly-Owned Subsidiary; provided,
however, that any subsequent issuance or transfer of any Capital Stock or any
other event which results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Company or a Wholly-Owned Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness by the issuer thereof;
(iv) Indebtedness represented by (x) $150.0 million aggregate principal amount
of the Securities, (y) any Indebtedness (other than the Indebtedness described
in clauses (i), (ii) and (iii)) outstanding on the Issue Date and (z) any
Refinancing Indebtedness Incurred in respect of any Indebtedness described in
this clause (iv) or clause (v) or Incurred pursuant to paragraph (a) above; (v)
Indebtedness of a Restricted Subsidiary Incurred and outstanding on the date on
which such Restricted Subsidiary was acquired by the Company; provided, however,
that at the time such Restricted Subsidiary is acquired by the Company, the
Company would have been able to Incur $1.00 of additional Indebtedness pursuant
to paragraph (a) above after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (v); (vi) Indebtedness under Currency
Agreements and Interest Rate Agreements; provided, however, that in the case of
Currency Agreements and Interest Rate Agreements, such Currency Agreements and
Interest Rate Agreements are entered into for bona fide hedging purposes of the
Company or its Restricted Subsidiaries (as determined in good faith by the Board
of Directors or senior management of the Company) and correspond in terms of
notional amount, duration, currencies and interest rates, as applicable, to
Indebtedness of the Company or its Restricted Subsidiaries Incurred without
violation of this Indenture or to business transactions of the Company or its
Restricted Subsidiaries on customary terms entered into in the ordinary course
of business; and (vii) Indebtedness (other than Indebtedness described in
clauses (i) - (vi)) in a principal amount
42
which, when taken together with the principal amount of all other Indebtedness
Incurred pursuant to this clause (vii) and then outstanding, will not exceed
$20.0 million.
(c) Neither the Company nor any Restricted Subsidiary shall Incur any
Indebtedness under Section 3.3(b) if the proceeds thereof are used, directly or
--------------
indirectly, to refinance any Subordinated Obligations of the Company unless such
Indebtedness shall be subordinated to the Securities to at least the same extent
as such Subordinated Obligations. No Subsidiary Guarantor shall incur any
Indebtedness under Section 3.3(b) if the proceeds thereof are used, directly or
--------------
indirectly to refinance any Guarantor Subordinated Obligations of such
Subsidiary Guarantor unless such Indebtedness shall be subordinated to the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee to at
least the same extent as such Guarantor Subordinated Obligations.
(d) For purposes of determining compliance with, and the outstanding
principal amount of, any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 3.3, in the event that Indebtedness meets the
-----------
criteria of more than one of the types of Indebtedness described in Section
-------
3.3(b), the Company, in its sole discretion, shall classify such item of
------
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
(e) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt.
SECTION III.4. Limitation on Layering. The Company shall not Incur
----------------------
any Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Subsidiary Guarantor shall Incur any
Indebtedness if such Indebtedness is contractually subordinate or junior in
ranking in any respect to any Guarantor Senior Indebtedness of such Subsidiary
Guarantor unless such Indebtedness is Guarantor Senior Subordinated Indebtedness
of such Subsidiary Guarantor or is contractually subordinated in right of
payment to Guarantor Senior Subordinated Indebtedness of such Subsidiary
Guarantor.
SECTION III.5. Limitation on Restricted Payments. (a) The Company
---------------------------------
shall not, and shall not permit any of its Restricted Subsidiaries, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and (B) dividends or distributions payable to the
Company or a Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of Capital
Stock on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than a
Restricted Subsidiary of the Company or any Capital Stock of a Restricted
Subsidiary of the Company held by any Affiliate of the Company, other than
another Restricted Subsidiary (in either case, other than in
43
exchange for its Capital Stock (other than Disqualified Stock)), (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition) or (iv)
make any Investment (other than a Permitted Investment) in any Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition, retirement or Investment being herein referred to in clauses (i)
through (iv) as a "Restricted Payment"), if at the time the Company or such
------------------
Restricted Subsidiary makes such Restricted Payment: (1) a Default shall have
occurred and be continuing (or would result therefrom); or (2) the Company shall
not be able to incur an additional $1.00 of Indebtedness pursuant to Section
-------
3.3(a); or (3) the aggregate amount of such Restricted Payments and all other
------
Restricted Payments declared or made subsequent to the Issue Date would exceed
the sum of: (A) (i) Consolidated EBITDA accrued during the period (treated as
one accounting period) from the Issue Date to the end of the most recent fiscal
quarter ending prior to the date of such Restricted Payment as to which
financial results are available (or, in case such Consolidated EBITDA is a
deficit, minus 100% of such deficit) less (ii) 150% of Consolidated Interest
Expense for such period; (B) the aggregate Net Cash Proceeds received by the
Company from the issue or sale of its Capital Stock (other than Disqualified
Stock) or other capital contributions subsequent to the Issue Date (other than
net proceeds to the extent (x) used to redeem Securities or (y) received from an
issuance or sale of such Capital Stock to a Subsidiary of the Company or an
employee stock ownership plan or similar trust to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from or
guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination); (C) the amount
by which Indebtedness of the Company is reduced on the Company's balance sheet
upon the conversion or exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Indebtedness of the Company convertible or
exchangeable for Capital Stock of the Company (less the amount of any cash, or
other property, distributed by the Company upon such conversion or exchange);
(D) the amount equal to the net reduction in Investments (other than Permitted
Investments) made by the Company or any of its Restricted Subsidiaries in any
Person resulting from (i) repurchases or redemptions of such Investments by such
Person, proceeds realized upon the sale of such Investment to an unaffiliated
purchaser, repayments of loans or advances or other transfers of assets as a
return of capital or similar payment (excluding by way of dividend or
distribution) by such Person to the Company or any Restricted Subsidiary of the
Company or (ii) the redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the definition of "Investment")
not to exceed, in the case of any Unrestricted Subsidiary, the amount of
Investments (excluding Permitted Investments) previously made by the Company or
any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was
included in the calculation of the amount of Restricted Payments; provided,
however, that no amount shall be included under this clause (D) to the extent it
is already included in Consolidated Net Income.
(b) The provisions of Section 3.5(a) shall not prohibit: (i) any
--------------
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for,
44
or out of the proceeds of the substantially concurrent sale of, Capital Stock of
the Company (other than Disqualified Stock and other than Capital Stock issued
or sold to a Subsidiary or an employee stock ownership plan or similar trust to
the extent such sale to an employee stock ownership plan or similar trust is
financed by loans from or guaranteed by the Company or any Restricted Subsidiary
unless such loans have been repaid with cash on or prior to the date of
determination); provided, however, that (A) such purchase or redemption shall be
excluded in subsequent calculations of the amount of Restricted Payments and (B)
the Net Cash Proceeds from such sale shall be excluded from clause (3) (B) of
paragraph (a); (ii) any purchase or redemption of Subordinated Obligations of
the Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Subordinated Obligations of the Company; provided, however,
that such purchase or redemption shall be excluded in subsequent calculations of
the amount of Restricted Payments; (iii) any purchase or redemption of
Subordinated Obligations from Net Available Cash to the extent permitted under
Section 3.7; provided, however, that such purchase or redemption shall be
-----------
excluded in subsequent calculations of the amount of Restricted Payments; (iv)
dividends paid within 60 days after the date of declaration if at such date of
declaration such dividend would have complied with this provision; provided,
however, that such dividends shall be included in subsequent calculations of the
amount of Restricted Payments; (v) cash dividends to AHI or Holdings for the
purpose of, and in amounts equal to, amounts required to permit AHI or Holdings
(A) to redeem or repurchase Capital Stock of AHI or Holdings (or pay dividends
to AHI Advanstar L.L.C. for the purpose of redeeming or repurchasing membership
interests in AHI Advanstar L.L.C. pursuant to the operating agreement of AHI
Advanstar L.L.C.) from existing or former employees or management of AHI,
Holdings, the Company or any Subsidiary or their assigns, estates or heirs, in
each case in connection with the repurchase provisions under employee stock
option or stock purchase agreements or other agreements to compensate management
employees; provided, however, that such dividends shall be included in
subsequent calculations of the amount of Restricted Payments; and (B) to make
loans or advances to employees or directors of the Company or any Subsidiary the
proceeds of which are used to purchase Capital Stock of AHI or Holdings or
membership interests in AHI Advanstar L.L.C.; provided, however, that such
dividends shall be included in subsequent calculations of the amount of
Restricted Payments; (C) to pay any Federal, state or local income taxes to the
extent that such income taxes are attributable to the income of the Company and
its Subsidiaries, pay franchise taxes and other fees required to maintain its
legal existence, corporate overhead expenses Incurred in the ordinary course of
business, and salaries or other compensation of employees who perform services
for both Holdings and the Company; provided, however, that such dividends will
be excluded in subsequent calculations of the amount of Restricted Payments and
(D) so long as no Default or Event of Default shall have occurred and be
continuing, in an amount not to exceed $100,000 in any fiscal year to enable AHI
or Holdings to make payments to holders of its Capital Stock in lieu of the
issuance of fractional shares of its Capital Stock; provided, however, that such
dividends will be excluded in subsequent calculations of the amount of
Restricted Payments; provided further, however, that the aggregate amount of
dividends paid to AHI or Holdings pursuant to this clause (v) shall not exceed
$3.0 million in any fiscal year; and (vi) repurchases of Capital Stock deemed to
occur upon the exercise of stock options if such Capital Stock represents a
portion of the exercise price thereof; provided, however, that such repurchases
shall be excluded from the calculation of the amount of Restricted Payments.
45
SECTION III.6. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company will not, and will not permit any
-----------------------
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company, (ii) make any loans or advances to the Company or (iii) transfer any of
its property or assets to the Company, except (a) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the date of this
Indenture (including, without limitation, the Senior Credit Agreement); (b) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by a Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was acquired by the
Company (other than Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on such
date; (c) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement effecting a refinancing of Indebtedness Incurred
pursuant to an agreement referred to in clause (a) or (b) of this Section 3.6 or
-----------
this clause (c) or contained in any amendment to an agreement referred to in
clause (a) or (b) of this Section 3.6 or this clause (c); provided, however,
-----------
that the encumbrances and restrictions with respect to such Restricted
Subsidiary contained in any such agreement or amendment are no less favorable to
Holders of the Securities than encumbrances and restrictions contained in such
agreements; (d) in the case of clause (iii) above, any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by this Indenture, (C)
contained in mortgages, pledges or other security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such mortgages,
pledges or other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary; (e) any
restriction with respect to a Restricted Subsidiary (or any of its property or
assets) imposed pursuant to an agreement entered into for the direct or indirect
sale or disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition; and (f)
encumbrances or restrictions arising or existing by reason of applicable law.
SECTION III.7. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset
Disposition at least equal to the fair market value, as determined in good faith
by the Board of Directors (including as to the value of all non-cash
consideration), of the shares and assets subject to such Asset Disposition, (ii)
at least 85% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or Cash
46
Equivalents. With respect to any Asset Disposition occurring on or after the
Issue Date from which the Company or any Restricted Subsidiary receives Net
Available Cash, the Company or such Restricted Subsidiary shall apply an amount
equal to 100% of the Net Available Cash from such Asset Disposition at its
election, to either (i) prepay, repay or purchase Senior Indebtedness or
Indebtedness (other than any Preferred Stock) of a Wholly Owned Subsidiary (in
each case other than Indebtedness owed to the Company or an Affiliate of the
Company) within 365 days from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; (ii) invest in Additional Assets within
365 days from the later of the date of such Asset Disposition or the receipt of
such Net Available Cash; or (iii) make an offer pursuant to Section 3.7(b) to
--------------
purchase the Notes and other Senior Subordinated Indebtedness outstanding with
similar provisions requiring the Company to make an offer to purchase such
Indebtedness with the proceeds from any Asset Disposition ("Pari Passu Notes")
at 100% of the principal amount thereof (or 100% of the accreted value of such
Pari Passu Notes so tendered if such Pari Passu Notes were issued at a discount)
plus accrued and unpaid interest, if any, to the date of purchase; provided,
however, that, in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (i) above, the Company or such Restricted
Subsidiary will retire such Indebtedness and will cause the related loan
commitment (if any), unless such commitment is for the provision of a revolving
credit facility, to be permanently reduced in an amount equal to the principal
amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions, the Company and its Restricted Subsidiaries will not be required to
apply any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this covenant exceed $1.0 million. Any Net Available
Cash from an Asset Disposition that is not invested or applied as provided and
within the time period set forth in clauses (i) and (ii) of the first sentence
of this paragraph will be deemed to constitute "Excess Proceeds."
For the purposes of this Section 3.7 and for no other purpose, the
-----------
following will be deemed to be cash: (x) the assumption by the transferee of
Senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary
of the Company and the release of the Company or such Restricted Subsidiary from
all liability on such Senior Indebtedness or Indebtedness in connection with
such Asset Disposition (in which case the Company will, without further action,
be deemed to have applied such assumed Indebtedness in accordance with clause
(i) of the preceding paragraph); (y) securities received by the Company or any
Restricted Subsidiary of the Company from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash; and (z) the
fair market value, as determined by the Board of Directors of the Company in
good faith, of any Designated Noncash Consideration received by the Company or
any of its Restricted Subsidiaries in any Asset Disposition, taken together with
the fair market value, as determined by the Board of Directors of the Company in
good faith, of all other Designated Noncash Consideration received pursuant to
this clause (z) that is at that time outstanding, not to exceed $25.0 million at
the time of the receipt of such Designated Noncash Consideration (with the fair
market value of each item of Designated Noncash Consideration being measured at
the time received and without giving effect to subsequent changes in value), in
which case such Designated Noncash Consideration shall not constitute Net
Available Cash.
47
(b) When the aggregate amount of Excess Proceeds exceeds $5.0 million
(with lesser amounts to be carried forward for purposes of determining whether
an Offer (as defined) is required with respect to the Excess Proceeds from any
subsequent Asset Disposition), the Company will be required to apply such Excess
Proceeds to the repayment of the Notes and any Pari Passu Notes as follows: (A)
the Company will make an offer to purchase (an "Offer") within ten days of such
-----
time from all Holders in accordance with the procedures set forth in this
Indenture in the maximum principal amount (expressed as a multiple of $1,000) of
Securities that may be purchased out of an amount (the "Note Amount") equal to
-----------
the product of such Excess Proceeds multiplied by a fraction, the numerator of
which is the outstanding principal amount of the Securities and the denominator
of which is the sum of the outstanding principal amount of the Securities and
the outstanding principal amount (or accreted value, as the case may be) of the
Pari Passu Notes at a purchase price of 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of purchase and (B) the
Company will make an offer to purchase any Pari Passu Notes (a "Pari Passu
----------
Offer") in an amount equal to the excess of the Excess Proceeds over the Note
-----
Amount at a purchase price of 100% of the principal amount (or accreted value,
as the case may be) thereof plus accrued and unpaid interest, if any, to the
date of purchase in accordance with the procedures (including prorating in the
event of oversubscription) set forth in the documentation governing such Pari
Passu Notes with respect to the Pari Passu Offer. If the aggregate purchase
price of the Notes and Pari Passu Notes tendered pursuant to the Offer and the
Pari Passu Offer is less than the Excess Proceeds, the remaining Excess Proceeds
will be available to the Company to fund other corporate purposes not otherwise
prohibited by this Indenture.
(c) (1) Promptly, and in any event within 10 days after the Company
is required to make an Offer, the Company will deliver to the Trustee and send,
by first-class mail to each Holder, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
--------
Date").
----
(2) Not later than the date upon which such written notice of an
Offer is delivered to the Trustee and the Holders, the Company will deliver to
the Trustee an Officers' Certificate setting forth (i) the amount of the Offer
(the "Offer Amount"), (ii) the allocation of the Net Available Cash from the
------------
Asset Dispositions as a result of which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 3.7(a). Upon the
--------------
expiration of the period (the "Offer Period") for which the Offer remains open,
------------
the Company shall deliver to the Trustee for cancellation the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company. The Trustee shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price of the Securities
tendered by such Holder to the extent such funds are available to the Trustee.
(3) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form entitled "Option of Holder to
Elect Purchase" duly completed, to the Company at the address specified in the
notice prior to the expiration of the
48
Offer Period. Each Holder will be entitled to withdraw its election if the
Trustee or the Company receives, not later than one Business Day prior to the
expiration of the Offer Period, a facsimile transmission or overnight mail from
such Holder setting forth the name of such Holder, the principal amount of the
Security or Securities which were delivered for purchase by such Holder and a
statement that such Holder is withdrawing his election to have such Security or
Securities purchased. If at the expiration of the Offer Period the aggregate
principal amount of Securities surrendered by Holders exceeds the Offer Amount,
the Company shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that only
Securities in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders whose Securities are purchased only in part will be issued
new Securities equal in principal amount to the unpurchased portion of the
Securities surrendered.
(d) The Company will 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 the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.7, the Company will
-----------
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION III.8. Limitation on Affiliate Transactions. (a) The Company
------------------------------------
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless: (i) the terms of
---------------------
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's-length dealings with a Person who is not
such an Affiliate; (ii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $1 million, the terms of such transaction have
been approved by a majority of the members of the Board of Directors of the
Company and by a majority of the members of such Board having no personal stake
in such transaction, if any (and such majority or majorities, as the case may
be, determines that such Affiliate Transaction satisfies the criteria in (i)
above); and (iii) in the event such Affiliate Transaction involves an aggregate
amount in excess of $5.0 million, the Company has received a written opinion
from an independent investment banking firm of nationally recognized standing
that such Affiliate Transaction is not materially less favorable than those that
might reasonably have been obtained in a comparable transaction at such time on
an arm's-length basis from a Person that is not an Affiliate; provided, however,
that this clause (iii) will not apply to any Affiliate Transaction with any
joint venture or similar entity in which the Permitted Holders do not have any
direct or indirect interests other than the interests of the Company and its
Restricted Subsidiaries in such joint venture or similar entity.
(b) The foregoing paragraph (a) shall not apply to (i) any Restricted
Payment permitted to be made pursuant to Section 3.5, (ii) any issuance of (A)
-----------
securities to any of the Permitted Holders or (B) securities, or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment arrangements, stock options and stock ownership plans approved by
the Board of Directors of the Company, (iii) loans or advances to
49
employees in the ordinary course of business of the Company or any of its
Restricted Subsidiaries or (iv) any transaction between the Company and a
Wholly-Owned Subsidiary or between Wholly-Owned Subsidiaries.
SECTION III.9. Change of Control. Upon the occurrence of any of the
-----------------
following events (each a "Change of Control"), unless the Company shall have
-----------------
exercised its right to redeem the Securities as described in Section 5.1, each
-----------
holder will have the right to require the Company to repurchase all or any part
of such holder's Securities at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest due on the relevant interest payment date) (the "Change
------
of Control Payment"):
------------------
(i) (A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time), directly or indirectly, of more than 35% (or if there is a Public
Market at the time such person is or is deemed to have beneficial
ownership, more than 50%) of the total voting power of the Voting Stock of
the Company, Holdings or AHI (or its successor by merger, consolidation or
other business combination) (for the purposes of this clause, such person
shall be deemed to beneficially own any Voting Stock of the Company,
Holdings or AHI held by a parent corporation, if such person "beneficially
owns" (as defined above), directly or indirectly, more than 35% of the
voting power of the Voting Stock of such parent corporation); and (B) if
there is no Public Market, the Permitted Holders "beneficially own" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Company, Holdings or AHI (or its successor by
merger, consolidation or purchase of all or substantially all of its
assets) than such other person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the board of directors of the Company or such successor (for
the purposes of this clause, such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person "beneficially owns" (as defined in
clause (A) above), directly or indirectly, more than 35% of the voting
power of the Voting Stock of such parent corporation and the Permitted
Holders "beneficially own" (as defined in this clause (B)), directly or
indirectly, in the aggregate a lesser percentage of the voting power of the
Voting Stock of such parent corporation and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the board of directors of such parent corporation);
or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company, Holdings or AHI or Holdings (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Company, Holdings or AHI, as
50
the case may be, was approved by a vote of at least a majority of the
directors of the Company, Holdings or AHI 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 or is a designee of the
Permitted Holders or was nominated or elected by such Permitted Holders or
any of their designees) cease for any reason to constitute a majority of
the Board of Directors of the Company, Holdings or AHI then in office; or
(iii) 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 Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
other than a Permitted Holder; or
(iv) the adoption by the stockholders of a plan for the liquidation
or dissolution of the Company.
Within 30 days following any Change of Control, unless the Company has
mailed a redemption notice with respect to all the outstanding Securities in
connection with such Change of Control as described in Section 5.1, the Company
-----------
shall mail a notice to each holder with a copy to the Trustee stating: (i) that
a Change of Control has occurred and that such holder has the right to require
the Company pursuant to this Section 3.9 to purchase such holder's Securities
-----------
(the "Change of Control Offer") at a purchase price in cash equal to 101% of the
-----------------------
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on a record date to
receive interest on the relevant interest payment date); (ii) the repurchase
date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed); (iii) that any Security not tendered shall continue
to accrue interest, if any; (iv) that, unless the Company defaults in the
payment of principal or interest, all Securities accepted for payment pursuant
to the Change of Control Offer shall cease to accrue interest, if any, after the
Change of Control Payment Date; (v) that holders electing to have any Securities
purchased pursuant to a Change of Control Offer shall be required to surrender
the Securities to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the date of
purchase for the Change of Control Payment Date; (vi) that holders shall be
entitled to withdraw their election if the Paying Agent receives, not later than
the close of business on the second Business Day preceding the Change of Control
Payment Date, a facsimile transmission or letter setting forth the name of the
holder, the principal amount of Securities delivered for purchase, and a
statement that such holder is withdrawing his election to have the Securities
purchased; and (vii) that holders whose Securities are being purchased only in
part shall be issued new Securities equal in principal amount to the unpurchased
portion of the Securities surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof.
On a Business Day that is no earlier than 30 days nor later than 60
days from the date that the Company mails or causes to be mailed notice of the
Change of Control to the holders (the "Change of Control Payment Date"), the
------------------------------
Company shall, to the extent lawful, (i) accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of
51
Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all the Securities or portions thereof so
tendered and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating the
aggregate principal amount of such Securities or portions thereof being
purchased by the Company. The Paying Agent shall promptly mail to each Holder of
the Securities so tendered the Change of Control Payment for such Securities,
and the Trustee shall promptly authenticate and mail (or cause to be transferred
by book-entry) to each Holder a new Security equal in principal amount to any
unpurchased portion of the Securities surrendered, if any; provided that each
such new Security 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.
The Company will 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 the repurchase of Securities pursuant to this
Section 3.9. To the extent that the provisions of any securities laws or
-----------
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations described in this Indenture by virtue thereof.
SECTION III.10. Limitation on Dispositions of Capital Stock of
----------------------------------------------
Restricted Subsidiaries. The Company (i) will not, and will not permit any
-----------------------
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than the Company or a Wholly Owned Subsidiary), unless (A) such
transfer, conveyance, sale, lease or other disposition is a sale of the common
stock of such Restricted Subsidiary and, after giving effect to the consummation
thereof, the Company owns (x) more than 50% of the outstanding common stock of
such Restricted Subsidiary or (y) none of the outstanding common stock of such
Restricted Subsidiary and (B) the cash net proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 3.7; and (ii) will not permit any Restricted Subsidiary to issue any of
-----------
its Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' qualifying shares) to any Person other than to the
Company or a Wholly-Owned Subsidiary, unless such issuance is an issuance of the
common stock of such Restricted Subsidiary and, after giving effect to the
consummation thereof, the Company owns (x) more than 50% of the outstanding
common stock of such Restricted Subsidiary or (y) none of the outstanding common
stock of such Restricted Subsidiary.
SECTION III.11. Limitation on Liens. The Company will not, and will
-------------------
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien (other than Permitted Liens and Liens
securing Senior Indebtedness and Guarantees of Senior Indebtedness) upon any of
its property or assets (including Capital Stock), whether owned on the date of
this Indenture or thereafter acquired, securing any Indebtedness, unless
contemporaneously therewith effective provision is made to secure the
Indebtedness due under this Indenture and the Securities or, in respect of Liens
on any Restricted Subsidiary's property or assets, any Subsidiary Guarantee of
such Restricted Subsidiary, equally and ratably with (or prior
52
to in the case of Liens with respect to Subordinated Obligations) the
Indebtedness secured by such Lien for so long as such Indebtedness is so
secured.
SECTION III.12. Future Subsidiary Guarantors. After the Issue Date,
----------------------------
the Company will cause each Restricted Subsidiary (other than a Foreign
Subsidiary) created or acquired by the Company to execute and deliver to the
Trustee a supplemental indenture (which supplemental indenture shall also be
executed and delivered by the Company and the Trustee) pursuant to which such
Subsidiary Guarantor will become a party to this Indenture and thereby
unconditionally Guarantee, on a joint and several basis, the full and prompt
payment of the principal of, premium, if any and interest on the Securities on a
senior subordinated basis.
SECTION III.13. Limitation on Lines of Business. The Company will
-------------------------------
not, nor will it permit any of its Subsidiaries to, engage in any line of
business, other than a Related Business.
SECTION III.14. Limitation on Asset Swaps. The Company will not, and
--------------------------
will not permit any Restricted Subsidiary to, engage in any Asset Swaps, unless:
(i) at the time of entering into such Asset Swap and immediately after giving
effect to such Asset Swap, no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof; (ii) in the event
such Asset Swap involves the transfer by the Company or any Restricted
Subsidiary of assets having an aggregate fair market value, as determined by the
Board of Directors of the Company in good faith, in excess of $1.0 million, the
terms of such Asset Swap have been approved by a majority of the members of the
Board of Directors of the Company and (iii) in the event such Asset Swap
involves an aggregate amount in excess of $10.0 million, the Company has
received a written opinion from an independent investment banking firm of
nationally recognized standing that such Asset Swap is fair to the Company or
such Restricted Subsidiary, as the case may be, from a financial point of view.
SECTION III.15. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in The City of New York, an office or agency
where the Securities may be presented or surrendered for payment, where, if
applicable, the Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The principal corporate trust
office (the "Corporate Trust Office") of the Trustee shall be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any 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, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or
53
surrendered for any or all such purposes and may from time to time rescind any
such designation; 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 City of New York for such purposes. The Company will give
prompt written notice to the Trustee of any such designation or rescission and
any change in the location of any such other office or agency.
SECTION III.16. Corporate Existence.
-------------------
Subject to Article IV and Section 11.2, the Company will do or cause
---------- ------------
to be done all things necessary to preserve and keep in full force and effect
the corporate existence and that of each Restricted Subsidiary and the corporate
rights (charter and statutory) licenses and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve any such existence (except the Company), right, license or franchise
if the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not, and will not be, disadvantageous in any material respect to the Holders.
SECTION III.17. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (ii)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material liability or lien upon the property of the Company or any
Restricted Subsidiary; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which appropriate reserves, if
necessary (in the good faith judgment of management of the Company), are being
maintained in accordance with GAAP or where the failure to effect such payment
will not be disadvantageous to the Holders.
SECTION III.18. Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they
do, the certificate shall describe the Default or Event of Default, its status
and what action the Company is taking or proposes to take with respect thereto.
The Company also shall comply with TIA (S) 314(a)(4).
SECTION III.19. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
54
ARTICLE IV
Successor Company
-----------------
SECTION IV.1. Merger and Consolidation. The Company shall not
------------------------
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
---------
Company") shall be a corporation, partnership, trust, limited liability
-------
company or other similar entity organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been Incurred by the Successor Company or such
Subsidiary at the time of such transaction), no Default or Event of Default
shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 3.3 of this Indenture;
-----------
and
(iv) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the
Securities. Solely for the purpose of computing amounts described in clause
3(A) of Section 3.5(a), the Successor Company shall only be deemed to have
--------------
succeeded and be substituted for the Company with respect to periods subsequent
to the effective time of such merger, consolidation, combination or transfer of
assets.
Notwithstanding clauses (ii) and (iii) of the first sentence of this
Section 4.1: (i) any Restricted Subsidiary of the Company may consolidate with,
-----------
merge into or transfer all or part of its properties and assets to the Company
and (ii) the Company may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Company in another jurisdiction to realize tax or
other benefits.
55
ARTICLE V
Redemption of Securities
------------------------
SECTION V.1. Optional Redemption. The Securities may or shall, as the
-------------------
case may be, be redeemed, as a whole or from time to time in part, subject to
the conditions and at the Redemption Prices specified in the form of Securities
set forth in Exhibits A and B hereto, which are hereby incorporated by reference
----------------
and made a part of this Indenture, together with accrued and unpaid interest to
the redemption date.
SECTION V.2. Applicability of Article. Redemption of Securities at
------------------------
the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and
this Article.
SECTION V.3. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced
-----------
by a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, upon not less than 45 and not more than 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 5.4.
-----------
SECTION V.4. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $1,000.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Securities shall relate, in
the case of any Security redeemed or to be redeemed only in part, to the portion
of the principal amount of such Security which has been or is to be redeemed.
56
SECTION V.5. Notice of Redemption. Notice of redemption shall be
--------------------
given in the manner provided for in Section 13.2 not less than 30 nor more than
------------
60 days prior to the Redemption Date, to each Holder of Notes to be redeemed.
The Trustee shall give notice of redemption in the Company's name and at the
Company's expense; provided, however, that the Company shall deliver to the
Trustee, at least 45 days prior to the Redemption Date, an Officers' Certificate
requesting that the Trustee give such notice and setting forth the information
to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 5.7, if any,
-----------
(3) if less than all outstanding Securities are to be redeemed,
the identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be Outstanding
after such partial redemption,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 5.7) will become due and payable upon each such Security, or the
-----------
portion thereof, to be redeemed, and, unless the Company defaults in making
the redemption payment, that interest on Securities called for redemption
(or the portion thereof) will cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any, listed in such
notice or printed on the Securities, and
57
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION V.6. Deposit of Redemption Price. Prior to any Redemption
---------------------------
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 2.4) an amount of money sufficient to pay the Redemption
-----------
Price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION V.7. Notes Payable on Redemption Date. Notice of redemption
--------------------------------
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified (together with accrued interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that installments of interest whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant Regular Record Date or Special Record Date, as the case may be,
according to their terms and the provisions of Section 2.13.
------------
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION V.8. Securities Redeemed in Part.
---------------------------
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 3.15 (with, if the
------------
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute, and the Trustee shall authenticate and make
available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered, provided, that each such new Security will be in a principal amount
of $1,000 or integral multiple thereof.
58
ARTICLE VI
Defaults and Remedies
---------------------
SECTION VI.1. Events of Default. An "Event of Default" occurs if:
-----------------
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, whether or not such payment shall be
prohibited by Article X of this Indenture, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal or premium,
if any, of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise, whether or not such payment shall be prohibited
by Article X of this Indenture;
(3) the Company fails to comply with Article IV of this Indenture;
----------
(4) the Company fails to comply with any of Sections 3.2, 3.3, 3.4,
------------ --- ---
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, and 3.17
--- --- --- --- --- ---- ---- ---- ---- ---- ---- ---- ----
(in each case other than a failure to repurchase Securities when required
pursuant to Sections 3.7 or 3.9, which failure shall constitute an Event of
------------ ---
Default under Section 6.1(2)) and such failure continues for 30 days after
--------------
the notice specified below;
(5) the Company defaults in the performance of or a breach by the
Company of any other covenant or agreement in this Indenture or under the
Securities (other than those referred to in (1), (2), (3) or (4) above) and
such default continues for 60 days after the notice specified below;
(6) Indebtedness of the Company or any Restricted Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof and the total amount of such unpaid or
accelerated Indebtedness exceeds $5.0 million or its foreign currency
equivalent at the time;
(7) the Company or a Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian (as defined
below) of it or for any substantial part of its property; or
59
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws relating
to insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or
any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of $5.0
million or its foreign currency equivalent at the time is rendered against
the Company or a Significant Subsidiary if such judgment or decree remains
undischarged or unstayed for a period of 60 days following such judgment or
decree becomes final and non-appealable; or
(10) the failure of any Note Guarantee by a Guarantor (if any) to be
in full force and effect (except as contemplated by the terms hereof) or
the denial or disaffirmation by any such Guarantor of its obligations under
any Guarantee.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
-------------- ------------------
similar Federal or state law for the relief of debtors. The term "Custodian"
---------
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or (5) of
this Section 6.1 will not constitute an Event of Default until the Trustee or
-----------
the Holders of more than 25% in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified in said clause (4) or (5) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
60
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clauses (3), (4), (5), (6), (9) or (10) of
this Section 6.1.
-----------
SECTION VI.2. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.1(7) or (8) with respect to the Company)
-------------- ---
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least 25% in outstanding principal amount of the Securities by notice to
the Company and the Trustee, may, and the Trustee at the request of such Holders
shall, declare the principal of, premium, if any, and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal, premium and interest shall, subject to Section 10.4 of this
------------
Indenture, be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in Section 6.1(6) above has
--------------
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default or payment default
triggering such Event of Default pursuant to Section 6.1(6) shall be remedied or
--------------
cured by the Company and/or the relevant Significant Subsidiaries or waived by
the holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event of Default specified in Section
-------
6.1(7) or (8) with respect to the Company occurs, the principal of, premium and
------ ---
accrued and unpaid interest on all the Securities will become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in principal amount of the Securities
by notice to the Trustee may waive all past defaults (except with respect to
nonpayment of principal, premium or interest) and rescind an acceleration with
respect to the Securities and its consequences if (i) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, other than the nonpayment of principal or
interest that has become due solely because of such acceleration, have been
cured or waived. No such rescission shall affect any subsequent Default or
Event of Default or impair any right consequent thereto.
SECTION VI.3. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION VI.4. Waiver of Past Defaults. The Holders of a majority in
-----------------------
principal amount of the Securities by notice to the Trustee may waive an
existing Default or Event of Default and its consequences except (i) a Default
or Event of Default in the payment of the principal of or interest on a Security
or (ii) a Default or Event of Default in respect of a provision
61
that under Section 9.2 cannot be amended without the consent of each
-----------
Securityholder affected. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any consequent right.
SECTION VI.5. Control by Majority. The Holders of a majority in
-------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
--------------------
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION VI.6. Limitation on Suits. A Securityholder may not pursue
-------------------
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense (including reasonable
attorneys' fees and expenses);
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
Subject to certain restrictions, the holders of a majority in
principal amount of the outstanding Securities are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law or
the Indenture or that the Trustee determines is unduly prejudicial to the rights
of any other holder or that would involve the Trustee in personal liability.
Prior to taking any action under the Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION VI.7. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, premium (if any) or interest on the Securities held by
such Holder, on or after the respective due
62
dates expressed in the Securities, 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 VI.8. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
-------------- ---
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
-------
7.7.
---
SECTION VI.9. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
-----------
SECTION VI.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article VI, it shall pay out the money or property in
----------
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
-----------
SECOND: to holders of Senior Indebtedness to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION VI.11. Undertaking for Costs. In any suit for the
---------------------
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, 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
63
litigant. This Section does not apply to a suit by the Trustee, a suit by the
Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more
-----------
than 10% in outstanding principal amount of the Securities.
ARTICLE VII
Trustee
-------
SECTION VII.1. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
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 provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether
or not they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
-----------
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
64
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(i) 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.
(j) 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 (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
SECTION VII.2. Rights of Trustee. Subject to Section 7.1, (a) The
----------------- -----------
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
65
SECTION VII.3. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
------------- ----
SECTION VII.4. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION VII.5. Notice of Defaults. If a Default or Event of Default
------------------
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or
Event of Default in payment of principal of, premium (if any), or interest on
any Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION VII.6. Reports by Trustee to Holders. As promptly as
-----------------------------
practicable after each April 15 beginning with the April 15 following the date
of this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such April 15 that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)
313(b). The Trustee shall also transmit by mail all reports required by TIA (S)
313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION VII.7. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Trustee's agents, counsel, accountants and experts. The Company
shall
66
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees and expenses) incurred by it without negligence or
bad faith on its part in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
-----------
against any claims (whether asserted by any Securityholder, the Company or
otherwise). 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 may have separate counsel and the Company shall pay the
fees and expenses of such counsel provided that the Company shall not be
required to pay such fees and expenses if it assumes the Trustee's defense, and,
in the reasonable judgement of outside counsel to the Trustee, there is no
conflict of interest between the Company and the Trustee in connection with such
defense. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
-----------
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
-------------- ---
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION VII.8. Replacement of Trustee. The Trustee may resign at any
----------------------
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
------------
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of the Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
67
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 Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
-----------
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
------------
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
-----------
benefit of the retiring Trustee.
SECTION VII.9. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION VII.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
SECTION VII.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA
68
(S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A
Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to
the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION VIII.1. Discharge of Liability on Securities; Defeasance.
------------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.9) for cancellation or
-----------
(ii) all outstanding Securities have become due and payable, whether at maturity
or upon redemption and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities
(other than Securities replaced pursuant to Section 2.9), including interest
-----------
thereon to maturity or such redemption date, and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.1(c), cease to be of further effect. The Trustee shall
--------------
acknowledge satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
--------------- ---
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after giving effect to such legal defeasance,
-----------------------
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3,
------------ ---
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17,
--- --- --- --- --- --- ---- ---- ---- ---- ---- ---- ---- ----
and 4.1(iii) and 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 no longer constitute a Default or an Event of Default under Section 6.1(3)
--------------
and 6.1(4) ("covenant defeasance option"), but except as specified above, the
------ --------------------------
remainder of this Indenture and the Securities shall be unaffected thereby. The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
covenant defeasance option, the Company may, by written notice to the Trustee
prior to the delivery of the Opinion of Counsel referred to in Section 8.2(8),
--------------
elect to have any Subsidiary Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of any event that, in the absence of
such legal defeasance, would have constituted an Event of Default, and the Note
Guarantees in effect at such time shall terminate. If the Company exercises its
covenant defeasance option, the events specified in Sections 6.1(4), 6.1(6),
--------------- ------
6.1(7) (but only with respect to a Significant Subsidiary), 6.1(8) (but only
------ ------
with respect to a Significant Subsidiary), 6.1(9) and 6.1(10) will no longer
------ -------
constitute an Event of
69
Default, and payment of the Securities may not be accelerated because of the
occurrence of any such event or because of the failure of the Company to comply
with Sections 4.1(iii).
-----------------
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b), the
--------------- ---
Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 7.7, 7.8, 8.4,
------------ --- --- --- --- --- --- --- ---
8.5 and 8.6 shall survive until the Securities have been paid in full.
--- ---
Thereafter, the Company's obligations in Sections 7.7, 8.4 and 8.5 shall
------------ --- ---
survive.
SECTION VIII.2. Conditions to Defeasance. The Company may exercise
------------------------
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for
the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or a combination thereof for the payment of principal of and
interest on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity;
(3) 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 with respect to the Indenture resulting from the incurrence of
Indebtedness, all or a portion of which will be used to defease the
Securities concurrently with such incurrence);
(4) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the Securities and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder of the Securities is an
insider of the Company, after 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' right
generally;
70
(6) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article X;
(7) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(8) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) 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 Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such 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;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel in the United States to
the effect that the Securityholders 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; and
(10) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION VIII.3. Application of Trust Money. The Trustee shall hold
--------------------------
in trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article X.
SECTION VIII.4. Repayment to Company. The Trustee and the Paying
--------------------
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
71
SECTION VIII.5. Indemnity for U.S. Government Obligations. The
-----------------------------------------
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION VIII.6. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
----------
SECTION IX.1. Without Consent of Holders. The Company, the
--------------------------
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
72
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities will be modified or eliminated, as appropriate), and
which will be treated, together with any outstanding Initial Securities, as
a single issue of securities.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Indebtedness or under
Article XII of any holder of Guarantor Senior Indebtedness then outstanding
unless the holders of such Senior Indebtedness (or any group or representative
thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION IX.2. With Consent of Holders. The Company, the Guarantors
-----------------------
and the Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount of the Securities. However, without the consent of
each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased in accordance with this Indenture;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Securities on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Securities;
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
73
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article X or Article XII of any holder of Senior
Indebtedness or Guarantor Senior Indebtedness then outstanding unless the
holders of such Senior Indebtedness or Guarantor Senior Indebtedness (or any
group or representative thereof authorized to give a consent) consent to such
change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION IX.3. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION IX.4. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder.
An amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as applicable.
----------- ---
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION IX.5. Notation on or Exchange of Securities. If an amendment
-------------------------------------
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall
74
authenticate a new Security that reflects the changed terms. Failure to make the
appropriate notation or to issue a new Security shall not affect the validity of
such amendment.
SECTION IX.6. Trustee To Sign Amendments. The Trustee shall sign any
--------------------------
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
--------------------
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
Subordination
-------------
SECTION X.1. Agreement To Subordinate. The Company agrees, and each
------------------------
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities and other obligations relating to the Securities are
subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment when due in cash or Cash Equivalents of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. The Securities shall in all
respects rank pari passu with all other Senior Subordinated Indebtedness of the
---- -----
Company and only Indebtedness of the Company which is Senior Indebtedness will
rank senior to the Securities in accordance with the provisions set forth
herein. All provisions of this Article X shall be subject to Section 10.12.
-------------
SECTION X.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
------------------------------------
or distribution of the assets or securities of the Company upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its respective properties:
(1) holders of Senior Indebtedness of the Company shall be entitled
to receive payment in full in cash or Cash Equivalents of the Senior
Indebtedness (including interest accruing after, or which would accrue but
for, the commencement of any proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not a claim for such interest
would be allowed) before Securityholders shall be entitled to receive any
payment of principal of or interest on or other amounts with respect to the
Securities; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Securityholders would be
entitled but for this Article X shall be made to holders of Senior
Indebtedness as their respective interests may appear.
SECTION X.3. Default on Senior Indebtedness. The Company shall not
------------------------------
pay the principal of, premium (if any) or interest on or other amounts with
respect to the Securities or make any deposit pursuant to Section 8.1 or
-----------
repurchase, redeem or otherwise retire any Securities
75
("pay the Securities") if (i) any Senior Indebtedness of the Company is not paid
------------------
when due in cash or Cash Equivalents or (ii) any other default on Senior
Indebtedness of the Company occurs and the maturity of such Senior Indebtedness
of the Company is accelerated in accordance with its terms unless, in either
case, (x) the default has been cured or waived and any such acceleration has
been rescinded in writing or (y) such Senior Indebtedness of the Company has
been paid in full in cash or Cash Equivalents; provided, however, that the
Company may pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of the Senior Indebtedness of the Company with respect to which
either of the events set forth in clause (i) or (ii) of this sentence has
occurred or is continuing. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence) with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities for a period (a "Payment
-------
Blockage Period") commencing upon the receipt by the Trustee (with a copy to the
---------------
Company) of written notice (a "Blockage Notice") of such default from the
---------------
Representative of the holders of such Designated Senior Indebtedness specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated (i) by written notice
to the Trustee and the Company from the Person or Persons who gave such Blockage
Notice, (ii) because the default giving rise to such Blockage Notice is no
longer continuing or (iii) because such Designated Senior Indebtedness has been
repaid in full in cash or Cash Equivalents). Notwithstanding the provisions of
the immediately preceding sentence, unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume payments
on the Securities after the end of such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period, irrespective
of the number of defaults with respect to Designated Senior Indebtedness during
such period.
SECTION X.4. Acceleration of Payment of Securities. If payment of
-------------------------------------
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representatives) of the acceleration; provided, however, that the
Company and the Trustee shall be obligated to notify such a Representative only
if such Representative has delivered or caused to be delivered to the Company
and the Trustee an address for service of such a notice (and the Company and the
Trustee shall only be obligated to deliver the notice to the address so
specified). If any Designated Senior Indebtedness is outstanding, the Company
shall not pay the Securities until five Business Days after the holders or
Representative of such Designated Senior Indebtedness receives notice of such
acceleration and, thereafter, may pay the Securities only if this Article X
otherwise permits payments at that time.
SECTION X.5. When Distribution Must Be Paid Over. If a payment or
-----------------------------------
distribution is made to the Trustee or Securityholders that because of this
Article X should not have been made to them, the Trustee or the Securityholders
who receive the payment or distribution shall hold it in trust for holders of
Senior Indebtedness and promptly pay it over to them as their respective
interests may appear.
76
SECTION X.6. Subrogation. After all Senior Indebtedness is paid in
-----------
full in cash or Cash Equivalents and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Senior
Indebtedness to receive distributions applicable to Senior Indebtedness. A
payment or distribution made under this Article X to holders of Senior
Indebtedness which otherwise would have been made to Securityholders is not, as
between the Company and Securityholders, a payment by the Company of Senior
Indebtedness.
SECTION X.7. Relative Rights. This Article X defines the relative
---------------
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms;
or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive payments and
distributions otherwise payable to Securityholders.
SECTION X.8. Subordination May Not Be Impaired by Company. No right
--------------------------------------------
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of any of them to comply with this
Indenture.
SECTION X.9. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
------------
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than one
Business Day prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7. Each Paying Agent shall have the same
-----------
rights and obligations under this Article X as does the Trustee.
SECTION X.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
payment or distribution is to be made or a notice given to holders of Senior
Indebtedness, the payment or distribution may be made and the notice given to
their Representative (if any).
77
SECTION X.11. Article X Not To Prevent Events of Default or Limit
---------------------------------------------------
Right To Accelerate. The failure to make a payment in respect of the Securities
-------------------
by reason of any provision in this Article X shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION X.12. Trust Moneys Not Subordinated. Notwithstanding
-----------------------------
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article X, and none of the Securityholders shall
be obligated to pay over any such amount to the Company, any holder of Senior
Indebtedness of the Company, or any other creditor of the Company.
SECTION X.13. Trustee Entitled To Rely. Upon any payment or
------------------------
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
------------
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections 7.1
------------
and 7.2 shall be applicable to all actions or omissions of actions by the
---
Trustee pursuant to this Article X.
SECTION X.14. Trustee To Effectuate Subordination. Each
-----------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION X.15. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
------------
holders of Senior Indebtedness and, subject to Section 10.9, shall not be liable
to any such holders if it shall mistakenly pay over or
78
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Indebtedness shall be entitled by virtue
of this Article X or otherwise.
SECTION X.16. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Securityholder by accepting a Security
------------------------
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
Guarantee
---------
SECTION XI.1. Guarantee. Each Guarantor hereby fully,
---------
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Guarantor, to each Holder of the
Securities the full and punctual payment when due, whether at maturity, by
acceleration, by redemption or otherwise, of the principal of, premium, if any,
and interest on the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Each Guarantor further agrees (to the extent
permitted by law) that the Obligations may be extended or renewed, in whole or
in part, without notice or further assent from it, and that it will remain bound
under this Article XI notwithstanding any extension or renewal of any
Obligation. Notwithstanding anything to the contrary contained herein, AHI and
Holdings may merge with or consolidate into one another, so long as the
surviving Person Guarantees the full and prompt payment of the principal of,
premium, if any, and interest on the Securities on a senior subordinated basis.
Each Guarantor waives presentation to, demand of payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. Each Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of each Guarantor hereunder
shall not be affected by (a) the failure of any Holder to assert any claim or
demand or to enforce any right or remedy against the Company or any other person
under the Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of the Indenture, the Securities
or any other agreement; (d) the release of any security held by any Holder or
the Trustee for the Obligations or any of them; (e) the failure of any Holder to
exercise any right or remedy against any other Guarantor; or (f) any change in
the ownership of the Company.
Each Guarantor further agrees that its Note Guarantee herein
constitutes a Guarantee of payment when due (and not a Guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Obligations.
79
The Note Guarantee of each Guarantor is, to the extent and in the
manner set forth in Article XII, subordinated and subject in right of payment to
the prior payment in full of all Guarantor Senior Indebtedness of such Guarantor
and the Note Guarantee is made subject to such provisions of such Guarantees.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason (other than
payment of the Obligations in full), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense of
setoff, counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, the obligations of each
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Holder to assert any claim or demand or to enforce any remedy
under the Indenture, the Securities or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of any Guarantor or would otherwise
operate as a discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Note Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any of the
Obligations is rescinded or must otherwise be restored by any Holder upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Company to pay any of the Obligations when and
as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in
cash, to the Holders an amount equal to the sum of (i) the unpaid amount of such
Obligations then due and owing and (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law).
Each Guarantor further agrees that, as between such Guarantor, on the
one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in the Indenture
for the purposes of the Note Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby and (y) in the event of any such declaration of
acceleration of such Obligations, such Obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the
purposes of this Note Guarantee.
Each Guarantor also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section.
80
SECTION XI.2. Limitation on Liability; Termination, Release and
-------------------------------------------------
Discharge. The obligations of each Guarantor hereunder will be limited to the
---------
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor (including, without limitation, any Guarantees
under the Senior Credit Agreement) and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Note Guarantee or pursuant to its
contribution obligations under the Indenture or as set forth below, result in
the obligations of the Guarantor under this Note Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Wholly-Owned Subsidiary Guarantor without
limitation. Each Subsidiary Guarantor may consolidate with or merge into or sell
all or substantially all its assets to a corporation, partnership, trust,
limited partnership, limited liability company or other similar entity other
than the Company or a Wholly-Owned Subsidiary Guarantor (whether or not
affiliated with the Subsidiary Guarantor), except that if the surviving
corporation of any such merger or consolidation is a Subsidiary of the Company,
such Subsidiary shall not be a Foreign Subsidiary. Upon the sale or disposition
of a Subsidiary Guarantor (by merger, consolidation, the sale of its Capital
Stock or the sale of all or substantially all of its assets) to a Person
(whether or not an Affiliate of the Subsidiary Guarantor) which is not a
Subsidiary of the Company, which sale or disposition is otherwise in compliance
with this Indenture (including Section 3.7), such Subsidiary Guarantor shall be
deemed released from all its obligations under this Indenture and its Subsidiary
Guarantee and such Subsidiary Guarantee shall terminate; provided, however, that
any such termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under the Senior Credit Agreement and all of its Guarantees
of, and under all of its pledges of assets or other security interests which
secure, any other Indebtedness of the Company shall also terminate upon such
release, sale or transfer.
SECTION XI.3. Right of Contribution. Each Guarantor hereby agrees
----------------------
that to the extent that any Guarantor shall have paid more than its
proportionate share of any payment made on the obligations under the Note
Guarantees, such Guarantor shall be entitled to seek and receive contribution
from and against the Company or any other Guarantor who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 3.6. The provisions of
this Section 11.3 shall in no respect limit the obligations and liabilities of
each Guarantor to the Trustee and the Holders and each Guarantor shall remain
liable to the Trustee and the Holders for the full amount guaranteed by such
Guarantor hereunder.
SECTION XI.4. No Subrogation. Notwithstanding any payment or
--------------
payments made by each Guarantor hereunder, no Guarantor shall be entitled to be
subrogated to any of the rights of the Trustee or any Holder against the Company
or any other Guarantor or any collateral security or guarantee or right of
offset held by the Trustee or any Holder for the payment of the Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Company or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Trustee and the
Holders by the Company on
81
account of the Obligations are paid in full. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Trustee and the Holders, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Trustee in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Trustee, if required), to be applied against
the Obligations.
ARTICLE XII
Subordination of Note Guarantees
--------------------------------
SECTION XII.1. Agreement To Subordinate. Each Guarantor agrees, and
------------------------
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by each Note Guarantee and other obligations relating to the
Securities are subordinated in right of payment, to the extent and in the manner
provided in this Article XII, to the prior payment when due in cash or Cash
Equivalents of all Guarantor Senior Indebtedness and that the subordination is
for the benefit of and enforceable by the holders of Guarantor Senior
Indebtedness. Each Note Guarantee shall in all respects rank pari passu with
---- -----
all other Guarantor Senior Subordinated Indebtedness of such Guarantor and only
Indebtedness of the Guarantor which is Guarantor Senior Indebtedness will rank
senior to such Note Guarantee in accordance with the provisions set forth
herein. All provisions of this Article XII shall be subject to Section 12.12.
SECTION XII.2. Liquidation, Dissolution, Bankruptcy. Upon any
------------------------------------
payment or distribution of the assets or securities of any Guarantor upon a
total or partial liquidation or a total or partial dissolution of a Guarantor or
in a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to any Guarantor or its respective properties:
(1) holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents of the Guarantor Senior
Indebtedness (including interest accruing after, or which would accrue but
for, the commencement of any proceeding at the rate specified in the
applicable Guarantor Senior Indebtedness, whether or not a claim for such
interest would be allowed) before Securityholders shall be entitled to
receive any payment of principal of, premium, if any, or interest on or
other amounts with respect to the Securities; and
(2) until the Guarantor Senior Indebtedness is paid in full in cash
or Cash Equivalents, any payment or distribution to which Securityholders
would be entitled but for this Article XII shall be made to holders of
Guarantor Senior Indebtedness as their respective interests may appear.
SECTION XII.3. Default on Senior Indebtedness. No Guarantor shall
------------------------------
pay the principal of, premium (if any) or interest on or other amounts with
respect to the Securities or make any deposit pursuant to Section 8.1 or pay the
Securities if (i) any Guarantor Senior Indebtedness or Senior Indebtedness of
the Company is not paid when due in cash or Cash
82
Equivalents or (ii) any other default on Guarantor Senior Indebtedness or Senior
Indebtedness of the Company occurs and the maturity of such Guarantor Senior
Indebtedness or Senior Indebtedness of the Company is accelerated in accordance
with its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been rescinded in writing or (y) such Guarantor
Senior Indebtedness or Senior Indebtedness of the Company has been paid in full
in cash or Cash Equivalents; provided, however, that a Guarantor may pay the
Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Guarantor Senior Indebtedness or the Senior Indebtedness of the Company with
respect to which either of the events set forth in clause (i) or (ii) of this
sentence has occurred or is continuing. During the continuance of any default
(other than a default described in clause (i) or (ii) of the preceding sentence)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration of
any applicable grace periods, the Guarantor may not pay the Securities for a
Payment Blockage Period commencing upon the receipt by the Trustee (with a copy
to the Company) of a Blockage Notice of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been repaid in full in
cash or Cash Equivalents). Notwithstanding the provisions of the immediately
preceding sentence, unless the holders of such Designated Senior Indebtedness or
the Representative of such holders shall have accelerated the maturity of such
Designated Senior Indebtedness, a Guarantor may resume payments on the
Securities after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period.
SECTION XII.4. Acceleration of Payment of Securities. If payment of
-------------------------------------
the Securities is accelerated because of an Event of Default and if any
Designated Senior Indebtedness is outstanding, no Guarantor shall pay the
Securities until five Business Days after the holders or Representative of the
Designated Senior Indebtedness receives notice of such acceleration as provided
in the Indenture and, thereafter, Guarantors may pay the Securities only if this
Article XII otherwise permits payments at that time.
SECTION XII.5. When Distribution Must Be Paid Over. If a payment or
-----------------------------------
distribution is made to the Trustee or Securityholders that because of this
Article XII should not have been made to them, the Trustee or the
Securityholders who receive the payment or distribution shall hold it in trust
for holders of Guarantor Senior Indebtedness and promptly pay it over to them as
their respective interests may appear.
SECTION XII.6. Subrogation. After all Guarantor Senior Indebtedness
-----------
is paid in full in cash or Cash Equivalents and the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Guarantor Senior
Indebtedness to receive distributions
83
applicable to Guarantor Senior Indebtedness. A payment or distribution made
under this Article XII to holders of Guarantor Senior Indebtedness which
otherwise would have been made to Securityholders is not, as between a Guarantor
and Securityholders, a payment by such Guarantor of Guarantor Senior
Indebtedness.
SECTION XII.7. Relative Rights. This Article XII defines the
---------------
relative rights of Holders and holders of Guarantor Senior Indebtedness.
Nothing in the Note Guarantee shall:
(1) impair, as between a Guarantor and Holders, the obligation of a
Guarantor which is absolute and unconditional, to pay the Obligations in
accordance with the terms of the Note Guarantee; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Guarantor Senior Indebtedness to receive payments and
distributions otherwise payable to Securityholders.
SECTION XII.8. Subordination May Not Be Impaired by Guarantor. No
----------------------------------------------
right of any holder of Guarantor Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Note Guarantee shall be
impaired by any act or failure to act by a Guarantor or by the failure of any of
them to comply with the Note Guarantee or this Indenture.
SECTION XII.9. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 12.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than one
Business Day prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article XII. A Guarantor, the Company, the Registrar or co-registrar, the
Paying Agent, a Representative or a holder of Senior Indebtedness of the Company
or Guarantor Senior Indebtedness may give the notice; provided, however, that,
if an issue of Senior Indebtedness of the Company or Guarantor Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article XII with respect to any Guarantor Senior Indebtedness which may at any
time be held by it, to the same extent as any other holder of Guarantor Senior
Indebtedness; and nothing in Article VII shall deprive the Trustee of any of its
rights as such holder. Nothing in this Article XII shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7. Each Paying Agent
shall have the same rights and obligations under this Article XII as does the
Trustee.
SECTION XII.10. Distribution or Notice to Representative. Whenever a
----------------------------------------
payment or distribution is to be made or a notice given to holders of Guarantor
Senior
84
Indebtedness, the payment or distribution may be made and the notice given to
their Representative (if any).
SECTION XII.11. Article XII Not To Prevent Events of Default or Limit
-----------------------------------------------------
Right To Accelerate. The failure to make a payment in respect of the Securities
-------------------
by reason of any provision in this Article XII shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article XII shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
SECTION XII.12. Trust Moneys Not Subordinated. Notwithstanding
-----------------------------
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article VIII by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Guarantor Senior Indebtedness or
subject to the restrictions set forth in this Article XII, and none of the
Securityholders shall be obligated to pay over any such amount to a Guarantor,
any holder of Guarantor Senior Indebtedness or Senior Indebtedness of the
Company, or any other creditor of a Guarantor or the Company.
SECTION XII.13. Trustee Entitled To Rely. Upon any payment or
------------------------
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Guarantor
Senior Indebtedness or Senior Indebtedness of the Company for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness or Senior
Indebtedness and other Indebtedness of the Company or a Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article XII. In the event that
the Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this Article XII, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Guarantor Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment. The provisions of Sections
7.1 and 7.2 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article XII.
SECTION XII.14. Trustee To Effectuate Subordination. Each
-----------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Guarantor Senior Indebtedness and Senior Indebtedness of the Company as provided
in this Article XII and appoints the Trustee as attorney-in-fact for any and all
such purposes.
85
SECTION XII.15. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
------------
holders of Guarantor Senior Indebtedness or Senior Indebtedness of the Company
and, subject to Section 12.9, shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.
SECTION XII.16. Reliance on Subordination Provisions. Each
------------------------------------
Securityholder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Indebtedness, whether
such Guarantor Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Guarantor Senior Indebtedness and such holder of Guarantor Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Guarantor Senior Indebtedness.
ARTICLE XIII
Miscellaneous
-------------
SECTION XIII.1. Trust Indenture Act Controls. If any provision of
----------------------------
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Guarantor in addition to performing its obligations
under the Note Guarantee shall perform such other obligations as may be imposed
upon it with respect to this Indenture under the TIA.
SECTION XIII.2. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Advanstar Communications Inc.
0000 Xxx Xxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxxx
With a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
86
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION XIII.3. Communication by Holders with other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Trustee shall comply with TIA (S) 312(b) with respect to any
such communication. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA (S) 312(c).
SECTION XIII.4. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION XIII.5. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
87
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officer's Certificate or on certificates of public officials.
SECTION XIII.6. When Securities Disregarded. In determining whether
---------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION XIII.7. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION XIII.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
-------------- -------------
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION XIII.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
-------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
SECTION XIII.10. No Recourse Against Others. An incorporator,
--------------------------
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a
88
Security, each Securityholder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the
Securities.
SECTION XIII.11. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION XIII.12. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION XIII.13. Variable Provisions. The Company initially appoints
-------------------
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION XIII.14. Qualification of Indenture. The Company shall
--------------------------
qualify this Indenture under the TIA in accordance with the terms and conditions
of the Registration Rights Agreement and shall pay all reasonable costs and
expenses (including attorneys' fees and expenses for the Company, the Trustee
and the Holders) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION XIII.15. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
89
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
ADVANSTAR COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
AHI HOLDING CORP.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
ADVANSTAR HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
THE MEN'S GUILD IN CALIFORNIA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
ART EXPOSITIONS INTERNATIONAL INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
90
EXPOCON MANAGEMENT ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
ON DEMAND MARKETING, INC.
By: /s/ Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
TECHNOLOGY EVENTS COMPANY, LLC
By: /s/ Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
MAGIC KIDS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
______________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chairman & Chief Executive Officer
BANK OF NEW YORK
By: /s/ Xxxx Xxxx Xxxxxxxxx
______________________________
Name: Xxxx Xxxx Xxxxxxxxx
Title: Vice President
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
No. [___] Principal Amount $[______________]
CUSIP NO. ____________
9 1/4% Senior Subordinated Notes due 2008
Advanstar Communications Inc., a New York corporation, promises to pay
to [___________], or registered assigns, the principal sum of
[__________________] Dollars on May 1, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
ADVANSTAR COMMUNICATIONS INC.
By:______________________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By
Authorized Signatory Date: _____________, 1998
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 1/4% Senior Subordinated Note due 2008
1. Interest
--------
Advanstar Communications Inc., a New York corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May 1 and November 1 of
each year commencing November 1, 1998. Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from April 30, 1998. The Company shall pay
interest on overdue principal or premium, if any (plus interest on such interest
to the extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the April 15 or October 15 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a banking corporation duly organized
and existing under the laws of the State of New York (the "Trustee"), will act
as Trustee, Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Company or any of its domestically incorporated Wholly-Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of April
30, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $150.0 million aggregate principal amount (subject to
Section 2.9 of the Indenture). The aggregate principal amount of notes which
-----------
may be authenticated and delivered under the Indenture, including the
Securities, is limited to $250.0 million (subject to Section 2.9 of the
-----------
Indenture). This Security is one of the Initial Securities referred to in the
Indenture. The Securities include the Initial Securities and any Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture and the Registration Rights Agreement. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on: the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the Incurrence of
Indebtedness by the Company and its Subsidiary Guarantors if subordinate or
junior in any respect to any Senior Indebtedness or Guarantor Senior
Indebtedness, respectively, the payment of dividends and other distributions on
the Capital Stock of the Company and its Restricted Subsidiaries, the purchase
or redemption of Capital Stock of the Company and Capital Stock of such
Restricted Subsidiaries, certain purchases or redemptions of Subordinated
Indebtedness, the Incurrence of Liens by the Company or its Restricted
Subsidiaries, the entering into of Asset Swaps by the Company or its Restricted
Subsidiaries, the sale or transfer of assets and Capital Stock of Restricted
Subsidiaries, the issuance or sale of Capital Stock of Restricted Subsidiaries,
the business activities and investments of the Company and its Restricted
Subsidiaries and, transactions with Affiliates. In addition, the Indenture
limits the ability of the Company and its Restricted Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior subordinated basis pursuant to the terms of the
Indenture.
5. Redemption
----------
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to May 1, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior
notice mailed by first-class mail to each holder's registered address, at the
following redemption prices (expressed in percentages of principal amount), plus
accrued and unpaid interest to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date):
If redeemed during the 12-month period commencing on May 1 of the years set
forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2003 104.625 %
2004 103.083 %
2005 101.542 %
2006 and thereafter 100.000 %
In addition, at any time and from time to time prior to May 1, 2001,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Equity Offerings
received by, or invested in, the Company so long as there is a Public Market at
the time of such redemption, at a redemption price (expressed as a percentage of
principal amount) of 109.250% plus accrued and unpaid interest, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date);
provided, however, that at least 65% of the original principal amount of the
Securities must remain outstanding after each such redemption; provided further,
however, that each such redemption occurs within 90 days of the date of closing
of such Equity Offering.
At any time on or prior to May 1, 2003, the Securities may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 30 days after the occurrence of such Change of Control) mailed
by first-class mail to each holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as of,
and accrued and unpaid interest, if any, to, the date of redemption (the
"Redemption Date") (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at May 1, 2003 (such redemption price being
described under "Optional Redemption") plus (2) all required interest payments
due on such Security through May 1, 2003, computed using a discount rate equal
to the Treasury Rate plus 50 basis points, over (B) the principal amount of such
Note.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to May 1, 2003; provided, however, that if the
period from the Redemption Date to May 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the Redemption Date to May 1, 2003 is less than one
year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security.
6. Repurchase Provisions
---------------------
(1) Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under Section 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales permitted by the Indenture, when the aggregate amount of Excess Proceeds
equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in Section 3.7 of the Indenture.
-----------
7. Subordination
-------------
The Securities are subordinated to Senior Indebtedness and the Note
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated Indebtedness.
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
9. Persons Deemed Owners
---------------------
The registered holder of this Security may be treated as the owner of
it for all purposes.
10. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company, or
to comply with any request of the SEC in connection with qualifying the
Indenture under the Act, or to make any change that does not adversely affect
the rights of any Securityholder, or to provide for the issuance of Exchange
Securities.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase, upon required
repurchase or upon redemption pursuant to paragraphs 5 and 6 of the Securities,
upon declaration or otherwise; (iii) the failure by the Company to comply with
its obligations under Article IV of the Indenture, (iv) failure by the Company
----------
to comply for 30 days after notice with any of its obligations under the
covenants described under Section 3.9 of the Indenture or under other covenants
-----------
specified in the Indenture (in each case, other than a failure to purchase
Securities, which shall constitute an Event of Default under clause (ii) above),
(v) the failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company or any
Restricted Subsidiary if not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $10 million (the
"cross acceleration provision"), (vii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (viii) any judgment or decree for the payment of money in excess
of $5.0 million is rendered against the Company or a Significant Subsidiary and
such judgment or decree shall remain undischarged or unstayed for a period of 60
days after such judgment becomes final and non-appealable (the "judgment default
provision") or (ix) any Note Guarantee ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or any Guarantor denies
or disaffirms its obligations under the Indenture or its Note Guarantee.
However, a default under clauses (iv) and (v) will not constitute an Event of
Default until the Trustee or the holders of more than 25% in principal amount of
the outstanding Securities notify the Company of the default and the Company
does not cure such default within the time specified in clauses (iv) and (v)
hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
--------------------------
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
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 Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
-------------
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 [_] acquired for the undersigned's own account, without transfer; or
2 [_] transferred to the Company; or
3 [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"); or
4 [_] transferred pursuant to an effective registration statement under
the Securities Act; or
5 [_] transferred pursuant to and in compliance with Regulation S under
the Securities Act; or
6 [_] transferred to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act),
that has furnished to the Trustee a signed letter containing
certain representations and agreements (the form of which letter
appears as Section 2.7 of the Indenture); or
-----------
7 [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
______________________________ ______________________________
(Signature must be guaranteed) Signature
____________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
____________________________
Dated:
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Date of Amount of decrease in Amount of increase in Principal Amount of Signature of authorized
Exchange Principal Amount of Principal Amount of this Global Security signatory of Trustee or
this Global Security this Global Security following such decrease Securities Custodian
or increase
___________ ______________________ _________________ _________________ ______________________
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
----------- ---
[_] [_]
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in
----------- ---
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ________________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. [_____] Principal Amount $[____________]
CUSIP NO. _____________
9 1/4% Senior Subordinated Notes due 2008
Advanstar Communications Inc., a New York corporation, promises to pay
to [______________], or registered assigns, the principal sum of
[_______________] Dollars on May 1, 2008.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
ADVANSTAR COMMUNICATIONS INC.
By:____________________________________
By:____________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
The Bank of New York
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
Authorized Signatory Date:
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9 1/4% Senior Subordinated Note due 2008
1. Interest
--------
Advanstar Communications Inc., a New York corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May 1 and November 1 of
each year commencing November 1, 1998. Interest on the Securities will accrue
from the most recent date to which interest has been paid on the Securities or,
if no interest has been paid, from April 30, 1998. The Company shall pay
interest on overdue principal or premium, if any (plus interest on such interest
to the extent lawful), at the rate borne by the Securities to the extent lawful.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
-----------------
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of the
Securities at the close of business on the April 15 or October 15 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
--------------------------
Initially, The Bank of New York, a banking corporation duly organized
and existing under the laws of the State of New York (the "Trustee"), will act
as Trustee, Paying Agent and Registrar. The Company may appoint and change any
Paying Agent, Registrar or co-registrar without notice to any Securityholder.
The Company or any of its domestically incorporated Wholly-Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of April
30, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
------
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $150.0 million aggregate principal amount (subject to
Section 2.9 of the Indenture). The aggregate principal amount of notes which
-----------
may be authenticated and delivered under the Indenture, including the
Securities, is limited to $250.0 million (subject to Section 2.9 of the
-----------
Indenture). This Security is one of the Exchange Securities referred to in the
Indenture. The Securities include the Initial Securities and any Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture and the Registration Rights Agreement. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on: the Incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the Incurrence of
Indebtedness by the Company and its Subsidiary Guarantors if subordinate or
junior in any respect to any Senior Indebtedness or Guarantor Senior
Indebtedness, respectively, the payment of dividends and other distributions on
the Capital Stock of the Company and its Restricted Subsidiaries, the purchase
or redemption of Capital Stock of the Company and Capital Stock of such
Restricted Subsidiaries, certain purchases or redemptions of Subordinated
Indebtedness, the Incurrence of Liens by the Company or its Restricted
Subsidiaries, the entering into of Asset Swaps by the Company or its Restricted
Subsidiaries, the sale or transfer of assets and Capital Stock of Restricted
Subsidiaries, the issuance or sale of Capital Stock of Restricted Subsidiaries,
the business activities and investments of the Company and its Restricted
Subsidiaries, and transactions with Affiliates. In addition, the Indenture
limits the ability of the Company and its Subsidiaries to restrict distributions
and dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior subordinated basis pursuant to the terms of the
Indenture.
5. Optional Redemption
-------------------
Except as set forth below, the Securities will not be redeemable at the
option of the Company prior to May 1, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in
percentages of principal amount), plus accrued and unpaid interest to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date):
If redeemed during the 12-month period commencing on May 1 of the years set
forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2003 104.625 %
2004 103.083 %
2005 101.542 %
2006 and thereafter 100.000 %
In addition, at any time and from time to time prior to May 1, 2001, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Securities with the proceeds of one or more Equity Offerings received by,
or invested in, the Company so long as there is a Public Market at the time of
such redemption, at a redemption price (expressed as a percentage of principal
amount) of 109.250% plus accrued and unpaid interest, if any, to the redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 65% of the original principal amount of the Securities must remain
outstanding after each such redemption; provided further, that each such
redemption occurs within 90 days of the date of closing of such Equity Offering.
At any time on or prior to May 1, 2003, the Securities may also be redeemed
as a whole at the option of the Company upon the occurrence of a Change of
Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 30 days after the occurrence of such Change of Control) mailed
by first-class mail to each holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as of,
and accrued and unpaid interest, if any, to, the date of redemption (the
"Redemption Date") (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
"Applicable Premium" means, with respect to a Security at any Redemption
Date, the greater of (i) 1.0% of the principal amount of such Security and (ii)
the excess of (A) the present value at such time of (1) the redemption price of
such Security at May 1, 2003 (such redemption price being described under
"Optional Redemption") plus (2) all required interest payments due on such
Security through May 1, 2003, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such Note.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source of similar market data)) most nearly equal to the
period from the Redemption Date to May 1, 2003; provided, however, that if the
period from the Redemption Date to May 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the period from the Redemption Date to May 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be used.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security.
6. Repurchase Provisions
---------------------
.1 Upon a Change of Control, unless the Company has exercised its
right to redeem the Securities as described under Section 5 hereof, any Holder
of Securities will have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a purchase price in cash equal to 101%
of the principal amount thereof, plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date) as provided in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales permitted by the Indenture, when the aggregate amount of Excess Proceeds
equals or exceeds $5.0 million, the Company shall make an Offer for all
outstanding Securities pro rata up to a maximum principal amount (expressed as a
multiple of $1,000) of Securities equal to such Excess Proceeds, at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, if any, to the date of purchase in accordance with the
procedures set forth in Section 3.7 of the Indenture.
-----------
7. Subordination
-------------
The Securities are subordinated to Senior Indebtedness and the Note
Guarantees are subordinated to Guarantor Senior Indebtedness, each as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose. The Securities will
in all respects rank pari passu with all other Senior Subordinated Indebtedness.
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or for a
period beginning 15 days before the mailing of a notice of Securities to be
redeemed and ending on the date of such mailing or (ii) any Securities for a
period beginning 15 days before an interest payment date and ending on such
interest payment date.
9. Persons Deemed Owners
---------------------
The registered holder of this Security may be treated as the owner of
it for all purposes.
10. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Defeasance
----------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment) or
noncompliance with any provision may be waived with the written consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Company or
Communications or to comply with any request of the SEC in connection with
qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon required repurchase, upon required
repurchase or upon redemption pursuant to paragraphs 5 and 6 of the Securities,
upon declaration or otherwise; (iii) the failure by the Company to comply with
its obligations under Article IV of the Indenture (iv) failure by the Company to
----------
comply for 30 days after notice with any of its obligations under the covenants
described under Section 3.9 of the Indenture or under other covenants specified
-----------
in the Indenture (in each case, other than a failure to purchase Securities,
which shall constitute an Event of Default under clause (ii) above), (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Company or any
Restricted Subsidiary if not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $5.0 million
(the "cross acceleration provision"), (vii) certain events of bankruptcy,
insolvency or reorganization of the Company or a Significant Subsidiary (the
"bankruptcy provisions"), (viii) any judgment or decree for the payment of money
in excess of $5.0 million is rendered against the Company or a Significant
Subsidiary and such judgment or decree shall remain undischarged or unstayed for
a period of 60 days after such judgment becomes final and non-appealable (the
"judgment default provision") or (ix) any Note Guarantee ceases to be in full
force and effect (except as contemplated by the terms of the Indenture) or any
Guarantor denies or disaffirms its obligations under the Indenture or its Note
Guarantee. However, a default under clauses (iv) and (v) will not constitute an
Event of Default until the Trustee or the holders of more than 25% in principal
amount of the outstanding Securities notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
15. No Recourse Against Others
--------------------------
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
17. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
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 Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Governing Law
-------------
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.
_______________________________________________________________________________
Date: _______________ Your Signature ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.7 or 3.9 of the Indenture, check either box:
----------- ---
[_] [_]
3.7 3.9
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in
----------- ---
principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: _____________________________
(Sign exactly as your name appears on the other side of
the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
