EXHIBIT 10.5
CROWN MEDIA HOLDINGS, INC.,
Issuer
AND
JPMORGAN CHASE BANK,
Indenture Trustee
----------
INDENTURE
Dated as of December 17, 2001
----------
6.75% Subordinated Debentures due 2007
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
------------------- ----------
310(a)................................................................................. 7.09
310(b)................................................................................. 7.08
7.10
310(c)................................................................................. Inapplicable
311(a)................................................................................. 7.13(a)
311(b)................................................................................. 7.13(b)
311(c)................................................................................. Inapplicable
312(a)................................................................................. 5.01
5.02(a)
312(b)................................................................................. 5.02(b)
312(c)................................................................................. 5.02(c)
313(a)................................................................................. 5.04(a)
313(b)................................................................................. 5.04(b)
313(c)................................................................................. 5.04(a)
5.04(b)
313(d)................................................................................. 5.04(c)
314(a)................................................................................. 5.03
314(b)................................................................................. Inapplicable
314(c)................................................................................. 13.06
314(d)................................................................................. Inapplicable
314(e)................................................................................. 13.06
314(f)................................................................................. Inapplicable
315(a)................................................................................. 7.01(a)
7.02
315(b)................................................................................. 6.07
315(c)................................................................................. 7.01
315(d)................................................................................. 7.01(b)
7.01(c)
315(e)................................................................................. 6.07
----------
* This Cross-Reference Table does not constitute part of the
Indenture
and shall not have any bearing on the interpretation of any of its
terms or provisions.
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Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
------------------- ----------
316(a)................................................................................. 6.06
8.04
316(b)................................................................................. 6.04
316(c)................................................................................. 8.01
317(a)................................................................................. 6.02
317(b)................................................................................. 4.03
318(a)................................................................................. 13.08
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TABLE OF CONTENTS
PAGE
ARTICLE I INTERPRETATION AND DEFINITIONS.............................................................1
SECTION 1.01. Definitions of Terms...............................................................1
ARTICLE II ISSUE, DESCRIPTION, TERMS AND EXECUTION AND REGISTRATION OF DEBENTURES....................19
SECTION 2.01. Principal Amount and Maturity.....................................................19
SECTION 2.02. Form of Securities and Payment....................................................19
SECTION 2.03. Interest..........................................................................19
SECTION 2.04. Denominations: Provisions for Payment............................................20
SECTION 2.05. Execution and Authentication......................................................21
SECTION 2.06. Registration of Transfer..........................................................22
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities...................................23
SECTION 2.08. Cancellation......................................................................23
SECTION 2.09. Benefits of Indenture.............................................................24
SECTION 2.10. Authenticating Agent..............................................................24
ARTICLE III REDEMPTION AND PURCHASE OF DEBENTURES.....................................................25
SECTION 3.01. Optional Redemption and Special Event Redemption..................................25
SECTION 3.02. Change of Control Redemption and Offer to Purchase................................25
SECTION 3.03. Notice of Redemption..............................................................25
SECTION 3.04. Payment Upon Redemption or Purchase...............................................26
SECTION 3.05. No Sinking Fund...................................................................27
ARTICLE IV COVENANTS OF THE COMPANY..................................................................27
SECTION 4.01. Payment of Principal and Interest.................................................27
SECTION 4.02. Maintenance of Office or Agency...................................................27
SECTION 4.03. Paying Agent......................................................................28
SECTION 4.04. Limitations on Indebtedness.......................................................29
SECTION 4.05. Restricted Payments...............................................................30
SECTION 4.06. Limitation on Affiliate Transactions..............................................32
SECTION 4.07. Covenants as to the Trust.........................................................34
ARTICLE V HOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE INDENTURE TRUSTEE.......................34
SECTION 5.01. Company to Furnish Indenture Trustee Names and Addresses of Holders...............34
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SECTION 5.02. Preservation of Information; Communications With Holders..........................35
SECTION 5.03. Reports by the Company............................................................35
SECTION 5.04. Reports by the Indenture Trustee..................................................36
ARTICLE VI REMEDIES OF THE INDENTURE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT.........................37
SECTION 6.01. Events of Default.................................................................37
SECTION 6.02. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.........40
SECTION 6.03. Application of Amounts Collected..................................................41
SECTION 6.04. Limitation on Suits...............................................................42
SECTION 6.05. Rights and Remedies Cumulative; Delay or Omission Not Waiver......................43
SECTION 6.06. Control by Holders................................................................43
SECTION 6.07. Undertaking to Pay Costs..........................................................44
ARTICLE VII CONCERNING THE INDENTURE TRUSTEE..........................................................45
SECTION 7.01. Certain Duties and Responsibilities of Indenture Trustee..........................45
SECTION 7.02. Certain Rights of Indenture Trustee...............................................46
SECTION 7.03. Indenture Trustee Not Responsible for Recitals or Issuance or Debentures..........48
SECTION 7.04. May Hold Debentures...............................................................48
SECTION 7.05. Amounts Held in Trust.............................................................48
SECTION 7.06. Compensation and Reimbursement....................................................48
SECTION 7.07. Reliance on Officer's Certificate.................................................49
SECTION 7.08. Disqualification; Conflicting Interests...........................................49
SECTION 7.09. Corporate Indenture Trustee Required; Eligibility.................................50
SECTION 7.10. Resignation and Removal; Appointment of Successor.................................50
SECTION 7.11. Acceptance of Appointment by Successor............................................51
SECTION 7.12. Merger, Conversion, Consolidation or Succession to Business.......................52
SECTION 7.13. Preferential Collection of Claims Against the Company.............................53
ARTICLE VIII CONCERNING THE HOLDERS....................................................................53
SECTION 8.01. Evidence of Action by Holders.....................................................53
SECTION 8.02. Proof of Execution by Holders.....................................................54
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SECTION 8.03. Who May be Deemed Owners..........................................................54
SECTION 8.04. Certain Securities Owned by Company Disregarded...................................54
SECTION 8.05. Actions Binding on Future Holders.................................................55
ARTICLE IX SUPPLEMENTAL INDENTURES...................................................................55
SECTION 9.01. Supplemental Indentures Without the Consent of the Holders........................55
SECTION 9.02. Supplemental Indentures With Consent of the Holders...............................56
SECTION 9.03. Effect of Supplemental Indentures.................................................56
SECTION 9.04. Debentures Affected by Supplemental Indentures....................................57
SECTION 9.05. Execution of Supplemental Indentures..............................................57
SECTION 9.06. Consents..........................................................................57
ARTICLE X SUCCESSOR CORPORATION.....................................................................58
SECTION 10.01. Company May Consolidate, Etc. ....................................................58
SECTION 10.02. Successor Corporation Substituted.................................................58
SECTION 10.03. Evidence of Consolidation, Etc. to Indenture Trustee..............................59
ARTICLE XI SATISFACTION AND DISCHARGE................................................................59
SECTION 11.01. Satisfaction and Discharge of Indenture...........................................59
SECTION 11.02. Discharge of Obligations..........................................................60
SECTION 11.03. Deposited Amounts to be Held in Trust.............................................60
SECTION 11.04. Payment of Amounts Held by Paying Agents..........................................60
SECTION 11.05. Repayment to the Company..........................................................60
SECTION 11.06. Reinstatement.....................................................................61
ARTICLE XII IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................61
SECTION 12.01. No Recourse.......................................................................61
ARTICLE XIII SUBORDINATION.............................................................................62
SECTION 13.01. Agreement to Subordinate..........................................................62
SECTION 13.02. Default on Senior Indebtedness....................................................62
SECTION 13.03. Liquidation; Dissolution; Bankruptcy..............................................63
SECTION 13.04. Subrogation.......................................................................64
SECTION 13.05. Indenture Trustee to Effectuate Subordination.....................................65
SECTION 13.06. Notice by the Company.............................................................65
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SECTION 13.07. Rights of the Indenture Trustee; Holders of Senior Indebtedness...................66
SECTION 13.08. Subordination May Not Be Impaired.................................................66
ARTICLE XIV EXPENSES..................................................................................67
SECTION 14.01. Payment of Expenses...............................................................67
ARTICLE XV FORM OF DEBENTURE.........................................................................68
ARTICLE XVI MISCELLANEOUS PROVISIONS..................................................................75
SECTION 16.01. Effect on Successors and Assigns..................................................75
SECTION 16.02. Actions by Successor..............................................................75
SECTION 16.03. Surrender of Company Powers.......................................................75
SECTION 16.04. Notices...........................................................................75
SECTION 16.05. Governing Law.....................................................................75
SECTION 16.06. Treatment of Debentures as Debt; Preservation of Grantor Trust Status.............76
SECTION 16.07. Compliance Certificates and Opinions..............................................76
SECTION 16.08. Payments on Business Days.........................................................76
SECTION 16.09. Conflict with Trust Indenture Act.................................................77
SECTION 16.10. Counterparts......................................................................77
SECTION 16.11. Separability......................................................................77
SECTION 16.12. Assignment........................................................................77
SECTION 16.13. Subordination and Support Agreement...............................................77
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INDENTURE, dated as of December 17, 2001, between Crown Media
Holdings, Inc., a Delaware corporation (the "Company"), and JPMorgan Chase Bank,
a
New York banking corporation, as trustee (the "Indenture Trustee"):
WHEREAS, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of its 6.75% Subordinated
Debentures due 2007 (the "Debentures") as hereinafter provided, which Debentures
evidence loans made to the Company of the proceeds from the issuance by Crown
Media Trust, a Delaware statutory business trust (the "Trust"), of preferred
securities of the Trust (the "Preferred Securities") and the common securities
of the Trust (the "Common Securities," and together with the Preferred
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Debentures are to be authenticated, issued and delivered;
WHEREAS, the Preferred Securities are to be issued together
with contingent appreciation certificates (the "Contingent Appreciation
Certificates") to either receive a cash payment in the amount of the Minimum
Return Amount (as defined herein) or shares of Class A Common Stock, par value
$0.01 (the "Class A Common Stock"), of the Company, issued by the Company, as
units (the "Units");
WHEREAS, the Trust is subject to the Amended and Restated
Declaration of Trust, dated as of December 17, 2001, among the Company, as
Sponsor, and the trustees named therein (the "Declaration"), which Declaration
sets forth the terms and conditions of the Trust Securities;
NOW, THEREFORE, in consideration of the premises and the
purchase of the Debentures by the Holders thereof, it is mutually covenanted and
agreed as follows for the equal and ratable benefit of the holders of the
Debentures:
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.01. Definitions of Terms.
The terms defined in this Section (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture shall have the respective meanings specified in this
Section and shall include the plural as well as the singular. All other terms
used in this Indenture that are defined in the Trust Indenture Act, or that are
by reference in such Act defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires), shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the Issue Date. Any reference to a party hereto
shall include the successors and permitted assigns of such party.
Unless the context otherwise requires:
(a) capitalized terms used in this Indenture but not defined
in the preamble above have the respective meanings assigned thereto in this
Section 1.1;
1
(b) a term defined anywhere in this Indenture has the same
meaning throughout;
(c) all references to "the Indenture" or "this Indenture" are
to this Indenture as modified, supplemented or amended from time to time;
(d) all references in this Indenture to Articles and Sections
and Exhibits are to Articles and Sections of and Exhibits to this Indenture
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Indenture unless otherwise defined in this Indenture;
and
(f) a reference to the singular includes the plural and vice
versa.
"Acceleration Date" means any date on which Debentures become
due and payable pursuant to Section 6.01 hereof.
"Additional Interest" has the meaning specified in Section
2.03(c) hereof.
"Administrative Agent" means JPMorgan Chase Bank, and any
successor, as administrative agent under the Credit Agreement.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder. For purposes of the
covenant described under Section 4.06 hereof, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10% or more of the total voting
power of the Fully Diluted Outstanding Voting Stock of the Company or of rights
or warrants to purchase such Capital Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such beneficial
owner pursuant to the first sentence hereof.
"Affiliate Transaction" has the meaning set forth in Section
4.06 hereof.
"Assumed Obligations" means the obligations set forth in
Schedule 4.29(a) to the Securities Purchase Agreement.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, 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 or
redemption or similar payment with respect to such
Indebtedness multiplied by the amount of such
payment, by
(ii) the sum of all such payments.
2
"Authenticating Agent" means an authenticating agent with
respect of the Debentures appointed with respect to the Debentures by the
Indenture Trustee pursuant to Section 2.10 hereof.
"Authorized Officer" of a Person means the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice-President of such
Person.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
successor or federal or state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or any duly authorized committee thereof acting within the scope of such
authorization.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means any day other than a day on which Federal
and State banking institutions in The Borough of Manhattan, the City of
New York
are authorized or obligated by law, executive order or regulation to close.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital 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 upon which such lease may be terminated by the
lessee without payment of a penalty.
"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.
"Change of Control" means the occurrence of any of the
following:
(i) the Permitted Holders cease to be the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause
(i) the Permitted Holders shall be deemed to have
"beneficial ownership" of (A) all shares that any
such Permitted Holder has the right to acquire,
whether such right is exercisable immediately or only
after the passage of time and (B) any Voting Stock of
the Company held by any other Person (the "parent
entity") so long as the Permitted Holders
beneficially own (as so defined), directly or
indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent entity),
directly or indirectly, of a majority in the
aggregate of the total voting
3
power of the Voting Stock of the Company, whether as
a result of issuance of securities of the Company,
conversion of shares of Class B Common Stock of the
Company, any merger, consolidation, liquidation or
dissolution of the Company, or any direct or indirect
transfer of securities by the Company or otherwise;
provided however, that any shares underlying any
option or other agreement to reacquire economic or
voting control of shares of Capital Stock of the
Company entered into by a Permitted Holder in
connection with the sale, transfer or other
disposition by such Permitted Holder shall not
constitute shares beneficially owned by such
Permitted Holder;
(ii) any Person or group other than a Permitted Holder
becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause (ii) such Person or group
shall be deemed to have "beneficial ownership" of (A)
all shares that any such Person or group has the
right to acquire, whether such right is exercisable
immediately or only after the passage of time and (B)
any Voting Stock of the Company held by any parent
entity so long as the Person or group beneficially
owns (as so defined), directly or indirectly, in the
aggregate a majority of the voting power of the
Voting Stock of the parent entity), directly or
indirectly, in the aggregate of a majority of the
total voting power of the Voting Stock of the
Company, whether as a result of issuance of
securities of the Company, conversion of shares of
Class B Common Stock of the Company, any merger,
consolidation, liquidation or dissolution of the
Company, or any direct or indirect transfer of
securities by the Company or otherwise; provided
however, that any shares underlying any option or
other agreement to reacquire economic or voting
control of shares of Capital Stock of the Company
entered into by a Person in connection with the sale,
transfer or other disposition by such Person shall
not constitute shares beneficially owned by such
Person;
(iii) individuals who on the Issue Date constituted the
Board of Directors (together with any new directors
whose election by such Board of Directors or whose
nomination for election by the stockholders of the
Company was approved by a vote of at least 66-2/3% of
the Board of Directors then still in office who were
either directors on the Issue Date or whose election
or nomination for election was previously so
approved) cease for any reason to constitute a
majority of the Board of Directors then in office;
(iv) the consummation by the Company of any transaction
that would constitute a "Rule 13e-3 transaction" as
defined in the Exchange Act; or
(v) the sale of all or substantially all the assets of
the Company (determined on a consolidated basis) to
another Person, other than a transaction following
which the transferee Person becomes a Subsidiary of
the
4
transferor of such assets and fully and
unconditionally guarantees the Company's obligations
under the Debentures and the Contingent Appreciation
Certificates.
"Change of Control Offer" has the meaning specified in Section
3.01 hereof.
"Change of Control Redemption" has the meaning specified in
Section 3.01 hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the U.S. Securities and Exchange Commission
or, in the absence of the U.S. Securities and Exchange Commission, such other
federal agency then administering the Securities Act and other federal
securities laws.
"Common Securities" means that class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in the Declaration.
"Company" means Crown Media Holdings, Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject to
the provisions of Article X, its successors and assigns.
"Consolidated Adjusted Net Loss" for any period means the sum
of Consolidated Net Income plus depreciation and amortization expense of the
Company and its consolidated Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in a
prior period) for such period to the extent deducted in calculating such
Consolidated Net Income. Notwithstanding the foregoing, the provision for
depreciation and amortization of a Subsidiary shall be added to Consolidated Net
Income to compute Consolidated Adjusted Net Loss only to the extent (and in the
same proportion) that the net income of such Subsidiary was included in
calculating Consolidated Net Income.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(i) any net income of any Person (other than the Company)
if such Person is not a Subsidiary of the Company,
except that:
(a) subject to the exclusion contained in clause
(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 any of its
Subsidiaries as a dividend or other
distribution (subject, in the case of a
dividend or other distribution paid to a
Subsidiary, to the limitations contained in
clause (iii) below); and
5
(b) the Company's equity in a net loss of any
such Person for such period shall be
included in determining such Consolidated
Net Income;
(ii) any net income (or loss) of any Person acquired by
the Company or any of its Subsidiaries in a pooling
of interests transaction for any period prior to the
date of such acquisition;
(iii) any net income of any Subsidiary of the Company if
such Subsidiary is subject to restrictions, directly
or indirectly, on the payment of dividends or the
making of distributions by such Subsidiary, directly
or indirectly, to the Company, except that:
(a) subject to the exclusion contained in clause
(iv) below, the Company's equity in the net
income of any such Subsidiary for such
period shall be included in such
Consolidated Net Income up to the aggregate
amount of cash actually distributed by such
Subsidiary during such period to the Company
or another Subsidiary of the Company as a
dividend or other distribution (subject, in
the case of a dividend or other distribution
paid to another Subsidiary of the Company,
to the limitation contained in this clause);
and
(b) the Company's equity in a net loss of any
such Subsidiary for such period shall be
included in determining such Consolidated
Net Income;
(iv) any gain (but not loss) realized upon the sale or
other disposition of any assets of the Company, its
consolidated Subsidiaries or any other Person
(including pursuant to any sale-and-leaseback
arrangement) which is not sold or otherwise disposed
of in the ordinary course of business and any gain
(but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(v) extraordinary gains or losses; and
(vi) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section
4.05, there shall be excluded from Consolidated Net Income any repurchases,
repayments or redemptions of Investments, proceeds realized on the sale of
Investments or return of capital to the Company or a Subsidiary to the extent
such repurchases, repayments, redemptions, proceeds or returns increase the
amount of Restricted Payments permitted under Section 4.05(a)(ii)(D).
"Contingent Appreciation Certificate" has the meaning set
forth in the recitals hereto.
6
"Contingent Appreciation Certificate Agreement" means the
Contingent Appreciation Certificate Agreement, dated as of the Issue Date,
between the Company and the holders named therein.
"Corporate Trust Office" means the office of the Indenture
Trustee at which, at any particular time, its corporate trust business shall be
principally administered, which office at the Issue Date is located at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Institutional Trust Services.
"Coupon Rate" has the meaning specified in Section 2.03(a).
"Credit Agreement" means the Credit, Security, Guaranty, and
Pledge Agreement, dated as of August 31, 2001, by and among, the Company,
certain of its Subsidiaries, the lenders referred to therein, JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as Arranger and Sole
Bookrunner, Bank of America, N.A., as Arranger and Syndication Agent, Citicorp
USA, Inc. and Deutsche Bank AG
New York Branch, as Co-Arrangers and
Documentation Agents, together with the related documents thereto (including the
term loans and revolving loans thereunder, any guarantees and security
documents), as amended, extended, renewed, restated, supplemented or otherwise
modified (in whole or in part, and without limitation as to amount, terms,
conditions, covenants and other provisions) from time to time, and any agreement
(and related document) governing Indebtedness incurred to Refinance, in whole or
in part, the borrowings and commitments then outstanding or permitted to be
outstanding under such Credit Agreement or a successor Credit Agreement, whether
by the same or any other lender or group of lenders in accordance with Section
4.04 hereof.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
or similar official under any Bankruptcy Law.
"Debenture Register" has the meaning specified in Section
2.06.
"Debenture Registrar" has the meaning specified in Section
2.06.
"Debentures" means the Debentures authenticated and delivered
under this Indenture to be held by the Trust, a specimen certificate for such
Debentures being set forth in Article XV hereof.
"Declaration" means the Amended and Restated Declaration of
Trust of the Trust dated and effective as of the Issue Date.
"Default" means any event, act or condition which is, or after
notice or passage of time, or both, would constitute an Event of Default.
7
"Defaulted Interest" means any interest on the Debentures that
is payable, but is not punctually paid, or provided for, on any Interest Payment
Date.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) 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 at the option of the
holder for Indebtedness or Disqualified Stock; or
(iii) is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in
whole or in part;
in each case on or prior to the first anniversary of the Maturity Date of the
Debentures; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Maturity Date of the Debentures shall not constitute
Disqualified Stock if:
(a) the "change of control" provisions
applicable to such Capital Stock are not
more favorable to the holders of such
Capital Stock than the terms applicable to
the Debentures under this Indenture or
otherwise; and
(b) any such requirement only becomes operative
after compliance in full with such terms
applicable to the Debentures, including the
purchase of any Debentures tendered pursuant
thereto.
"Distribution and Programming Agreements" means (i) that
certain Amended and Restated Program License Agreement, dated as of January 1,
2001, by and between Crown Media International, Inc. and Hallmark Entertainment
Distribution, LLC and that certain Amended and Restated Program License
Agreement, dated as of January 1, 2001, by and between Hallmark Entertainment
Distribution, LLC and Crown Media United States, LLC, as such agreements may be
amended, modified, renewed or otherwise revised, or (ii) any agreement or series
of related agreements entered into by the Company or any of its Subsidiaries in
the ordinary course of business in connection with the licensing and/or
distribution of pay television or satellite programming, as any such agreement
may be amended, modified, renewed or otherwise revised.
"Event of Default" means any event specified in Section 6.01
hereof, continued for the period of time, if any, therein designated.
8
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended from time to time or any successor statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect
from time to time.
"Fully Diluted Outstanding" means, when used with reference to
Capital Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Capital Stock Outstanding at such date and other
options, warrants or Certificates to purchase, or securities convertible into,
shares of such Capital Stock outstanding on such date which would be deemed
outstanding in accordance with GAAP for purposes of determining book value or
net income per share.
"GAAP" means generally accepted accounting principles, as in
effect in the United States on the Issue Date.
"Governmental Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depositary receipt; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"Hallmark Cards" means Hallmark Cards, Incorporated, a
Missouri corporation, and its successors and assigns.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement, in
each case entered into in the ordinary course of business for bona fide hedging
purposes and not for the purpose of speculation.
"herein", "hereof" and "hereunder", and other words of similar
import, refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Holder" means a Person in whose name or names a Debenture
shall be registered on the books of the Company kept for that purpose in
accordance with the terms of this Indenture.
"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 Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall
9
be deemed to be incurred by such Person at the time it becomes a Subsidiary. The
term "incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(i) indebtedness of such Person for borrowed money
(whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of
property or services purchased (other than amounts
constituting trade payables (payable within 90 days)
arising in the ordinary course of business);
(ii) obligations of such Person in respect of letters of
credit, acceptance facilities, or drafts or similar
instruments issued or accepted by banks and other
financial institutions for the account of such
Person;
(iii) obligations of such Person under Capital Lease
Obligations;
(iv) deferred payment obligations of such Person resulting
from the adjudication or settlement of any
litigation;
(v) obligations of such Person under synthetic leases or
financing leases (but not operating leases);
(vi) obligations of such Person with respect to the
redemption, repayment or other repurchase of any
Disqualified Stock of such Person, or with respect to
any Preferred Stock of any Subsidiary of such Person,
the principal amount of such Preferred Stock to be
determined in accordance with this Indenture (but
excluding, in each case, any accrued dividends);
(vii) to the extent not otherwise included in this
definition, Hedging Obligations;
(viii) obligations under the Debentures and Contingent
Appreciation Certificates; and
(ix) indebtedness of others of the type described in
clauses (i) through (vii) above which such Person has
(a) directly or indirectly assumed or guaranteed in
connection with a guarantee or (b) secured by a Lien
on the assets of such Person, whether or not such
Person has assumed such indebtedness (provided, that
if such Person has not assumed such indebtedness of
another Person then the amount of indebtedness of
such Person pursuant to this clause (ix) for purposes
of this Indenture shall be equal to the lesser of the
amount of the indebtedness of the other Person
10
and the fair market value of the assets of such
Person which secure such other indebtedness).
Notwithstanding the foregoing, in connection with the purchase by the Company or
any Subsidiary of any business, the term "Indebtedness" shall exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional 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.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended.
"Indenture Trustee" means JPMorgan Chase Bank and, subject to
the provisions of Article VII, shall also include its successors and assigns,
and, if at any time there is more than one Person acting in such capacity
hereunder, "Indenture Trustee" shall mean each such Person.
"Interest Payment Date" has the meaning specified in Section
2.03 hereof.
"Interest Rate Agreement" means in respect of a Person any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of guarantee or similar
arrangement) 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. Except as otherwise provided
for herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value.
"Investment Company Event" means that the Regular Trustees
under the Declaration shall have received an opinion of a nationally recognized
independent counsel experienced in practice under the Investment Company Act
that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in 1940 Act Law"), there is more than an insubstantial risk that the Trust is or
will be considered an Investment Company which is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the Issue Date.
11
"Issue Date" means December 17, 2001.
"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).
"Maturity Date" means the date on which the Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Defaulted Interest and Additional
Interest, if any.
"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 thereof.
"Notice of Redemption" has the meaning specified in Section
3.03(a) hereof.
"Officer's Certificate" with respect to any Person, a
certificate signed by an Authorized Officer of such Person.
"Opinion of Counsel" means an opinion in writing of legal
counsel, who may be an employee of or counsel for the Company, that is delivered
to the Indenture Trustee in accordance with the terms hereof. Each such opinion
shall include the statements provided for in Section 16.07, if and to the extent
required by the provisions thereof.
"Optional Redemption" has the meaning specified in Section
3.01 hereof.
"Outstanding" when used with reference to the Debentures,
means, subject to the provisions of Section 8.04, as of any particular time, all
Debentures theretofore authenticated and delivered by the Indenture Trustee
under this Indenture, except (a) Debentures theretofore canceled by the
Indenture Trustee or any Paying Agent, or delivered to the Indenture Trustee or
any Paying Agent for cancellation or that have previously been canceled; (b)
Debentures for the payment or redemption of which cash or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Indenture Trustee or with any Paying Agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent); provided, however, that if such Debentures are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as in Article III provided, or provision satisfactory to the
Indenture Trustee shall have been made for giving such notice; and (c)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.07. When
used with reference to Capital Stock, at any date as of which the number of
shares thereof is to be determined, all issued shares of Capital Stock, except
shares then owned or held by or for the account of the Company or any Subsidiary
or Affiliate thereof, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Capital Stock.
12
"Paying Agent" means one or more Persons authorized by the
Company to pay interest, principal or any other payments on the Debentures.
"Permitted Holders" means Hallmark Cards and its Affiliates.
"Permitted Investment" means an Investment by the Company or
any Subsidiary in:
(i) the Company, a Wholly Owned Subsidiary or a Person
that will, upon the making of such Investment, become
a Wholly Owned Subsidiary, HM Holdings of Delaware,
LLC, HM Intermediary, LLC or Hallmark India Private
Limited;
(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 Wholly Owned Subsidiary;
(iii) cash and Temporary Cash Investments;
(iv) receivables owing to the Company or any Wholly Owned
Subsidiary if 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
Wholly Owned 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 consistent with past practices of
the Company or such Wholly Owned Subsidiary;
(vii) stock, obligations or securities received in
settlement of debts created in the ordinary course of
business and owing to the Company or any Wholly Owned
Subsidiary or in satisfaction of judgments;
(viii) any Investment acquired by the Company or any of its
Subsidiaries (a) in exchange for any other Investment
or accounts receivable held by the Company or any
such Wholly Owned Subsidiary in connection with or as
a result of a bankruptcy, workout, reorganization or
recapitalization of the issuer of such other
Investment or accounts receivable or (b) as a result
of a foreclosure by the Company or any of its
Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to
any secured Investment in default;
13
(ix) an Investment acquired by the Company or any of its
Subsidiaries as consideration in a single, one-time
strategic transaction involving the sale, lease,
transfer, merger, consolidation or other disposition
(or series of related sales, leases, transfers,
mergers or consolidations or dispositions) by the
Company or any of its Subsidiaries of a significant
portion of the business of the Company or any such
Subsidiary, which Investment relates to a business in
which the Company or any of its Subsidiaries was
engaged on the Issue Date;
(x) any Investment in existence on the Issue Date; and
(xi) other Investments in any Person having an aggregate
fair market value (measured on the date each such
Investment was made), when taken together with all
other Investments made pursuant to this clause (xi)
since the Issue Date, not to exceed $50.0 million.
"Person" means any individual, sole proprietorship,
partnership, limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency,
body or department thereof).
"Preferred Securities" means that class of preferred
securities representing undivided preferred beneficial interests in the assets
of the Trust and having such terms as are set forth in the Declaration.
"Preferred Securities Guarantee" means the guarantee
agreement, dated as of December 17, 2001, between of the Company and JPMorgan
Chase Bank, as the initial Preferred Securities Guarantee Trustee thereunder in
respect of the Preferred Securities.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of the Debentures means the principal of the
Debentures plus the premium, if any, payable on the Debentures which is due or
overdue or is to become due at the relevant time.
"Property Trustee" means the entity performing the functions
of the Property Trustee of the Trust under the Declaration.
"Refinance" means, in respect of any Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
14
"Refinancing Indebtedness" means Indebtedness that refinances
any Indebtedness of the Company or any Subsidiary of the Company existing on the
Issue Date or incurred in compliance with the Indenture, including Indebtedness
that refinances Refinancing Indebtedness; provided, however, that:
(i) such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the
Indebtedness being Refinanced;
(ii) such 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;
(iii) such Refinancing Indebtedness has an aggregate
principal amount (or if incurred with original issue
discount, an aggregate issue price) that is equal to
or less than the aggregate principal amount (or if
incurred with original issue discount, the aggregate
accreted value) then outstanding or committed (plus
fees and expenses and defeasance costs) under the
Indebtedness being Refinanced; and
(iv) to the extent that the Indebtedness being Refinanced
constitutes Subordinated Obligations, such
Refinancing Indebtedness shall also constitute
Subordinated Obligations;
provided further, however, that Refinancing Indebtedness shall
not include Indebtedness of a Subsidiary that Refinances Indebtedness of the
Company.
"Regular Record Date" means for any Interest Payment Date, the
fifteenth day or next earlier Business Day if such fifteenth day is not a
Business Day, next preceding such Interest Payment Date.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer of the Indenture Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to any particular
corporate trust matter, any other officer to whom such matter is referred based
on such officer's knowledge of any familiarity with particular matter.
"Restricted Payment" with respect to any Person means:
(i) the declaration or payment of any dividends or any
other distributions of any sort in respect of its
Capital Stock (including any payment in connection
with any merger or consolidation involving such
Person) or similar payment to the direct or indirect
holders (in any such case in their capacity as such)
of its Capital Stock (other than dividends or
distributions payable solely in its Capital Stock
(other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a
Subsidiary of the Company, and other than pro rata
dividends or other distributions made by a Subsidiary
that is not a Wholly Owned Subsidiary to minority
15
stockholders (or owners of an equivalent interest in
the case of a Subsidiary that is an entity other than
a corporation));
(ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the
Company held by any Person or of any Capital Stock of
a Subsidiary held by any Affiliate of the Company
(other than a Subsidiary), including the exercise of
any option to exchange any Capital Stock (other than
into Capital Stock of the Company that is not
Disqualified Stock);
(iii) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value prior to
scheduled maturity, scheduled repayment or scheduled
sinking fund payment of any Subordinated Obligations
of such Person (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 such purchase, repurchase or other
acquisition); or
(iv) the making of any Investment (other than a Permitted
Investment) in any Person.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect from time to time.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, dated as of December 17, 2001, by and among the Company, the Trust
and the Investors named therein.
"Senior Indebtedness" means (i) Indebtedness of the Company,
whether outstanding on the Issue Date or thereafter incurred and (ii) accrued
and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not post-filing interest is allowed in such proceeding), fees, expenses,
reimbursement obligations under letters of credit and any other "Obligations"
(as defined in the Credit Agreement) under the Credit Agreement, in the case of
each of clauses (i) and (ii), in respect of (A) Indebtedness of the Company for
money borrowed and (B) Indebtedness evidenced by debentures, bonds or other
similar instruments for the payment of which such Person is responsible or
liable, unless, in the case of clauses (i) and (ii), in the instrument creating
or evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are not superior in right of payment to the
Debentures; provided, however, that Senior Indebtedness shall not include: (a)
any obligation of the Company to any Subsidiary of the Company; (b) any
liability for federal, state, local or other taxes owed or owing by the Company
or any Subsidiary of the Company (including payments pursuant to any tax sharing
agreement between the Company and any of its Subsidiaries, on the one hand, and
Hallmark Cards and any of its Subsidiaries, on the other hand); (c) any accounts
16
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities); (d) any Indebtedness of the Company (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect to
any other Indebtedness or other obligation of the Company; (e) that portion of
any Indebtedness which at the time of incurrence is incurred in violation of
this Indenture; or (f) obligations in respect of performance, bid and surety
bonds and completion guarantees provided by the Company or any Subsidiary.
"Special Event" means a Tax Event or an Investment Company
Event.
"Special Event Redemption" has the meaning set forth in
Section 3.01 hereof.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Hallmark Obligations" has the meaning set forth
in the Subordination and Support Agreement.
"Subordinated Obligations" means any Indebtedness of the
Company (whether Outstanding on the Issue Date or thereafter incurred, including
the Subordinated Hallmark Obligations) which is subordinate or junior in right
of payment to the Debentures and the Contingent Appreciation Certificates
pursuant to a written agreement, executed by the Person to whom such
Indebtedness is owed, to that effect.
"Subordination and Support Agreement" means the Subordination
and Support Agreement, dated as of December 17, 2001, by and among the Company,
the Trust, Hallmark Cards, the Indenture Trustee, the Property Trustee and the
holders of Contingent Appreciation Certificates named therein.
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
"Tax Event" means that the Regular Trustees under the
Declaration shall have received an opinion of a nationally recognized
independent tax counsel experienced in such matters to the effect that on or
after the Issue Date, as a result of (a) any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority therefore
or therein, or (b) any amendment to, or change in, an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority, which
17
amendment or change is enacted, promulgated, issued or announced or which
interpretation or pronouncement is issued or announced or which action is taken,
in each case on or after the Issue Date, there is more than an insubstantial
risk that (i) the Trust is or will be within 90 days of the date thereof,
subject to United States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of taxes, duties or other
governmental charges, or (iii) interest payable by the Company to the Trust on
the Debentures is not, or within 90 days of the date thereof will not be,
deductible, in whole or in part, by the Company for United States federal income
tax purposes.
"Temporary Cash Investments" means any of the following:
(i) marketable securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition,
(ii) time deposits, demand deposits, certificates of deposit,
acceptances or prime commercial paper or repurchase obligations for underlying
securities of the types described in clause (i) entered into with any commercial
bank organized under the laws of the United States or a state thereof having a
short-term deposit rating at the time of acquisition of at least A-2 or the
equivalent thereof by Standard & Poor's Ratings Services or at least P-2 or the
equivalent thereof by Xxxxx'x Investors Service, Inc.,
(iii) commercial paper issued by a corporation with a rating
at the time of acquisition of A-1 or A-2 or the equivalent thereof by Standard &
Poor's Ratings Services or P-1 or P-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. and in each case maturing within twelve months after the
date of acquisition,
(iv) repurchase agreements and reverse repurchase agreements
with any bank meeting the requirements set forth in clause (ii) above relating
to marketable direct obligations issued or unconditionally backed by the full
faith and credit of the United States, in each case maturing within one year
from the date thereof, and
(v) marketable direct obligations issued by any state of the
United States or any agency or instrumentality thereof maturing within twelve
months from the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings generally obtainable from either Standard
& Poor's Ratings Services or Xxxxx'x Investors Service, Inc.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means Common Securities and Preferred
Securities issued by the Trust.
"Unit" has the meaning set forth in the recitals to this
Indenture.
18
"Voting Stock" of a Person means all classes of Capital Stock
or other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Subsidiary all the Capital
Stock of which (other than directors' qualifying shares, investments by foreign
nationals mandated by applicable law and the minority interest held in Crown
Media United States LLC, a Delaware limited liability company, on the Issue
Date) is owned by the Company or one or more Wholly Owned Subsidiaries.
ARTICLE II
ISSUE, DESCRIPTION, TERMS AND EXECUTION AND
REGISTRATION OF DEBENTURES
SECTION 2.01. Principal Amount and Maturity.
(a) The aggregate principal amount of Debentures that may be
authenticated and delivered under this Indenture is $273,196,000.
(b) The Maturity Date shall be December 15, 2007.
SECTION 2.02. Form of Securities and Payment.
The Debentures shall be issued in fully registered
certificated form. Each Debenture shall be dated the date of its authentication.
Principal and interest on the Debentures issued in certificated form shall be
payable and the transfer of such Debentures shall be registrable at the office
or agency of the Paying Agent designated by the Company; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered Holder at such address as shall appear in the Debenture Register.
The Company shall be required to maintain a Paying Agent in each place of
payment for the Debentures. Notwithstanding the foregoing, so long as the Holder
of any of the Debentures is the Property Trustee, the payment of the principal
of and interest on, such Debentures shall be made at such place and to such
account as may be designated by the Property Trustee.
SECTION 2.03. Interest.
(a) The Debentures shall bear interest at the rate of 6.75%
per annum (the "Coupon Rate") from the original date of issuance until the
principal thereof becomes due and payable, and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, payable quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year (each, an "Interest Payment Date"), commencing on March
15, 2002, to the Person in whose name such Debenture is registered, at the close
of business on the Regular Record Date for such Interest Payment Date. Interest
payments not paid when due shall accrue interest at the Coupon Rate on the
amount of accrued and unpaid interest (to the extent permitted by law). So
19
long as an Event of Default shall have occurred and be continuing (after, as
well as before, a judgment), the Company shall on each such date on which
Defaulted Interest is payable, pay interest, to the extent permitted by
applicable law, on any then unpaid amount of the Debentures Outstanding at a
rate equal to 8.75%, representing 2% per annum in excess of the Coupon Rate. The
term "interest" shall include Defaulted Interest and any Additional Interest.
(b) The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
shall be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the Debentures
is not a Business Day, then payment of interest payable on such date shall be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(c) If at any time while the Property Trustee is the Holder of
any Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority
(in the case of the Property Trustee, attributable to its holding the
Debentures), then, in any case, the Company shall pay as additional interest
("Additional Interest") on the Debentures held by the Property Trustee, such
additional amounts as shall be required so that the net amounts received and
retained by the Trust and the Property Trustee after paying such taxes, duties,
assessments or other governmental charges shall be equal to the amounts the
Trust and the Property Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
SECTION 2.04. Denominations: Provisions for Payment.
(a) The principal of and the interest on the Debentures shall
be payable in the coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debt, at the
office or agency of the Paying Agent designated by the Company maintained for
that purpose in the Borough of Manhattan, the City and State of
New York.
(b) Any Defaulted Interest shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder and such Defaulted Interest shall be paid by the Company to the
Persons in whose names the Debentures are registered at the close of business on
a special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Indenture Trustee in
writing of the amount of Defaulted Interest proposed to be paid on the
Debentures and the date of the proposed payment, and at the same time the
Company shall deposit with the Indenture Trustee an amount of cash equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Indenture Trustee for such deposit
prior to the date of the proposed payment, such amount when deposited
20
to be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Indenture Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall not
be more than 15 nor less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Indenture Trustee of the
notice of the proposed payment. The Indenture 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 therefor to be mailed, by first class mail postage
prepaid, to each Holder at his or her address as it appears in the Debenture
Register, 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 therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names the Debentures are registered on such special record
date.
SECTION 2.05. Execution and Authentication.
The Debentures shall be signed on behalf of the Company by,
its President, or one of its Vice Presidents, or its Treasurer, or one of its
Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries.
Signatures may be in the form of a manual or facsimile signature. The Company
may use the facsimile signature of any Person who shall have been a President or
Vice President thereof, or of any Person who shall have been a Secretary or
Assistant Secretary thereof, notwithstanding the fact that at the time the
Debentures shall be authenticated and delivered or disposed of, such Person
shall have ceased to be the President or a Vice President, or the Secretary or
an Assistant Secretary of the Company. The Debentures shall be dated the date of
its authentication by the Indenture Trustee.
The Debentures shall not be valid until authenticated manually
by an authorized signatory of the Indenture Trustee, or by an Authenticating
Agent. Such signature shall be conclusive evidence that the Debentures so
authenticated has been duly authenticated and delivered hereunder and that the
Holder is entitled to the benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures to the Indenture
Trustee for authentication, together with a written order of the Company for the
authentication and delivery of such Debentures, signed by its President or any
Vice President and its Secretary or any Assistant Secretary, and the Indenture
Trustee in accordance with such written order shall authenticate and deliver
such Debentures.
In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Indenture Trustee shall be entitled to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
form and terms thereof have been established in conformity with the provisions
of this Indenture.
The Indenture Trustee shall not be required to authenticate
such Debentures if the issue of such Debentures pursuant to this Indenture will
affect the Indenture Trustee's own
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rights, duties or immunities under the Debentures and this Indenture or
otherwise in a manner that is not reasonably acceptable to the Indenture
Trustee.
SECTION 2.06. Registration of Transfer.
(a) The Company shall keep, or cause to be kept, at its office
or agency designated in the Borough of Manhattan, the City and State of
New
York, or such other location designated by the Company a register or registers
(herein referred to as the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall register the
Debentures and the transfers of Debentures as in this Article provided and which
at all reasonable times shall be open for inspection by the Indenture Trustee.
The registrar for the purpose of registering Debentures and transfer of
Debentures as herein provided shall be appointed as authorized by Board
Resolution (the "Debenture Registrar").
Upon surrender for registration of transfer of the Debentures
at the office or agency of the Company designated for such purpose, the Company
shall execute, the Indenture Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new
Debenture for a like aggregate principal amount and other applicable terms and
conditions.
All Debentures presented or surrendered for registration of
transfer, as provided in this Section, shall be accompanied (if so required by
the Company or the Debenture Registrar) by a written instrument or instruments
of transfer, in form satisfactory to the Company or the Debenture Registrar,
duly executed by the registered Holder or by such Xxxxxx's duly authorized
attorney in writing.
(b) No service charge shall be made for any registration of
transfer of Debentures, or issue of new Debentures in case of redemption of any
Debentures, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto.
(c) The Company shall not be required (i) to issue or register
the transfer of any Debentures during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of all
the Debentures Outstanding and ending at the close of business on the day of
such mailing, nor (ii) to register the transfer of any Debentures called for
redemption.
(d) Each Holder of the Debentures, by its acceptance thereof,
will be deemed to have acknowledged, represented to and agreed with the Company
that such Holder understands and acknowledges that (1) the Debentures and
underlying securities have not been registered under the Securities Act or any
other applicable securities laws and are not freely transferable without
registration under or an exemption from the Securities Act, (2) the Debentures
are being purchased for the account of the Holder without a view to distribute,
or for offer or sale in connection with any distribution of, the Debentures in
violation of the securities act or any other applicable securities laws and (3)
in the absence of registration, the Debentures can only be transferred pursuant
to an exemption under the Securities Act and upon delivery of
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such certifications and an opinion of counsel reasonably acceptable to the
Company to such effect and in accordance with any other applicable securities
laws and that such Holder will notify the transferee of such resale
restrictions.
SECTION 2.07. Mutilated, Destroyed, Lost or Stolen Securities.
In case any Debenture shall become mutilated or be destroyed,
lost or stolen, the Company (subject to the next succeeding sentence) shall
execute, and upon the Company's request the Indenture Trustee (subject as
aforesaid) shall authenticate and deliver, a new Debenture, in exchange and
substitution for the mutilated Debenture, or in lieu of and in substitution for
the Debenture so destroyed, lost or stolen. In every case the applicant for a
substituted Debenture shall furnish to the Company and the Indenture Trustee
such indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Indenture Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Indenture Trustee shall authenticate any such substituted Xxxxxxxxx
and deliver the same upon the written request or authorization of any officer of
the Company. Upon the issuance of any substituted Debenture, 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 Indenture Trustee) connected therewith. In case any
Debenture that has matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute
Debenture, pay or authorize the payment of the same (without surrender thereof
except in the case of a mutilated Debenture) if the applicant for such payment
shall furnish to the Company and the Indenture Trustee indemnity as they may
require to save them harmless, and, in case of destruction, loss or theft,
evidence to the satisfaction of the Company and the Indenture Trustee of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Every replacement Debenture issued pursuant to the provisions
of this Section shall constitute an additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Debenture shall
be found at any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debentures duly issued hereunder. All Debentures shall be held and owned
upon the express condition that the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Debentures, and shall preclude (to the extent lawful) any and all other rights
or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.08. Cancellation.
All Debentures surrendered for the purpose of payment,
redemption or registration of transfer shall, if surrendered to the Company or
any Paying Agent, be delivered to the Indenture Trustee for cancellation, or, if
surrendered to the Indenture Trustee, shall be cancelled by it, and no
Debentures shall be issued in lieu thereof except as expressly required or
permitted by any of the provisions of this Indenture. On written request of the
Company at the
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time of such surrender, the Indenture Trustee shall deliver to the Company
canceled Debentures held by the Indenture Trustee. In the absence of such
written request, the Indenture Trustee shall dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
delivered to the Indenture Trustee for cancellation.
SECTION 2.09. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or
implied, shall give or be construed to give to any Person, other than the
parties hereto and the Holders of the Debentures and the holders of the
Securities (and, with respect to the provisions of Article XIII, the holders of
Senior Indebtedness) any legal or equitable right, remedy or claim under or in
respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the Holders of the Debentures (and, with
respect to the provisions of Article XIII, the holders of Senior Indebtedness).
SECTION 2.10. Authenticating Agent.
So long as any of the Debentures remain Outstanding there may
be an Authenticating Agent for any or all such Debentures which the Indenture
Trustee shall have the right to appoint. Said Authenticating Agent shall be
authorized to act on behalf of the Indenture Trustee to authenticate Debentures
issued upon registration of transfer or partial redemption thereof or as a
result of mutilation, destruction, loss or theft of such Debentures, and
Debentures so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Indenture Trustee hereunder. All references in this Indenture to the
authentication of Debentures by the Indenture Trustee shall be deemed to include
authentication by an Authenticating Agent for Debentures. Each Authenticating
Agent shall be acceptable to the Company and shall be a corporation that has a
combined capital and surplus, as most recently reported or determined by it,
sufficient under the laws of any jurisdiction under which it is organized or in
which it is doing business to conduct a trust business, and that is otherwise
authorized under such laws to conduct such business and is subject to
supervision or examination by Federal or State authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance with these
provisions, it shall resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Indenture Trustee and to the Company. The
Indenture Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon resignation,
termination or cessation of eligibility of any Authenticating Agent, the
Indenture Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance
of its appointment hereunder, shall
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become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
ARTICLE III
REDEMPTION AND PURCHASE OF DEBENTURES
SECTION 3.01. Optional Redemption and Special Event
Redemption.
(a) At any time on or after December 15, 2003, the Company
shall have the right to redeem (the "Optional Redemption") any and all of the
Debentures Outstanding, in whole but not in part, at a redemption price equal to
100% of the aggregate principal amount of the Debentures Outstanding, together
with any accrued and unpaid interest thereon to the date of redemption.
(b) At any time on or after the Issue Date and prior to
December 15, 2003, in the event of a Special Event, the Company shall have the
right to redeem (the "Special Event Redemption") any and all of the Debentures
Outstanding, in whole but not in part, at a redemption price equal to 100% of
the aggregate principal amount of the Debentures, together with any accrued and
unpaid interest thereon to the date of redemption.
SECTION 3.02. Change of Control Redemption and Offer to
Purchase.
(a) In the event of a Change of Control, the Company shall
have the right to redeem any and all of the Debentures Outstanding at a
redemption price per Debenture, depending on the period in which the Change of
Control occurs, equal to the following percentages per $1,000 aggregate
principal amount of Debentures Outstanding, together with any accrued and unpaid
interest to the date of redemption (a "Change of Control Redemption"):
December 15, 2001 to December 14, 2002 110.0%
December 15, 2002 to December 14, 2003 110.0%
December 15, 2003 and thereafter 100.0%
(b) In the event that the Company declines to exercise a
Change of Control Redemption with respect to all Debentures Outstanding within
five (5) days of a Change of Control, the Company shall be required to offer to
purchase any and all of the Debentures Outstanding at a price equal to the
redemption price that would have been payable upon a Change of Control
Redemption specified in clause (a) of this Section 3.02 (a "Change of Control
Offer"). In connection with any such Change of Control Offer, the Company
covenants and agrees that it shall purchase any and all Debentures that are
validly tendered by Holders thereof.
SECTION 3.03. Notice of Redemption.
(a) The election of the Company to redeem or offer to
purchase, as applicable, any Debentures pursuant to Section 3.01 or 3.02 shall
be evidenced by or pursuant to a Board Resolution. In case the Company shall
desire to exercise such right to redeem all, or offer to purchase any and all,
of the Debentures in accordance with Section 3.01 or 3.02, the Company
25
shall, or shall cause the Indenture Trustee to, give notice of such redemption
or offer to purchase, as applicable, to Holders of the Debentures to be redeemed
or purchased by mailing, first class mail postage prepaid, an irrevocable notice
of such redemption not less than 45 days and not more than 60 days before the
date fixed for redemption or purchase to such Holders at their last addresses as
they shall appear upon the Debenture Register (a "Notice of Redemption"). Any
such Notice of Redemption that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered
Holder receives the notice. In any case, failure to duly give such Notice of
Redemption to the Holder of any Debenture redeemed hereunder, or any defect in
the Notice of Redemption, shall not affect the validity of the proceedings for
the redemption or purchase of any other Debenture.
The Notice of Redemption shall specify the date fixed for
redemption or purchase and the redemption or purchase price (including any
premium) at which the Debentures are to be redeemed or purchased, and shall
state that payment of the redemption or purchase price of such Debentures to be
redeemed or purchased shall be made at the office or agency of the Company in
the Borough of Manhattan, The City of
New York, upon presentation and surrender
of such Debentures that interest accrued to the date fixed for redemption or
purchase shall be paid as specified in said notice and that from and after said
date interest shall cease to accrue.
(b) The Company may, in accordance with Sections 3.01 and 3.02
and if and whenever it shall so elect, by delivery of instructions signed on its
behalf by its President or any Vice President, instruct the Indenture Trustee or
any Paying Agent to call all of the Debentures for redemption or purchase and to
give Notice of Redemption in the manner set forth in this Section, such notice
to be in the name of the Company or its own name as the Indenture Trustee or
such Paying Agent may deem advisable. In any case in which Notice of Redemption
is to be given by the Indenture Trustee or any such Paying Agent, the Company
shall deliver or cause to be delivered to, or permit to remain with, the
Indenture Trustee or such Paying Agent, as the case may be, such Debenture
Register, transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Indenture Trustee or such Paying Agent to
give any notice by mail that may be required under the provisions of this
Section.
(c) Notwithstanding the provisions of Sections 3.01 and 3.02,
prior to effecting any redemption or offer to purchase with respect to
Debentures being redeemed or purchased, the Company shall pay in full all
accrued and unpaid interest (including Defaulted Interest and Additional
Interest, if any) on all Debentures Outstanding so redeemed or purchased.
SECTION 3.04. Payment Upon Redemption or Purchase.
(a) If the giving of Notice of Redemption shall have been
completed as above provided, the Debentures to be redeemed or purchased
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the redemption or purchase price, together with
interest accrued to the date fixed for redemption or purchase and interest on
such Debentures shall cease to accrue on and after the date fixed for redemption
or purchase, unless the Company shall default in the payment of such redemption
or purchase price and accrued interest with respect to any such Debenture, in
which case interest shall continue to accrue. On presentation and surrender of
such Debentures on or after the date fixed for redemption or
26
purchase at the place of payment specified in the notice, said Debentures shall
be paid and redeemed or purchased at the redemption price, together with
interest accrued thereon to the date fixed for redemption or purchase (but if
the date fixed for redemption or purchase is an Interest Payment Date, the
interest installment payable on such date shall be payable to the registered
Holder at the close of business on the applicable record date pursuant to
Section 2.03(a)).
If any Debenture called for redemption or offered to be
purchased shall not be so paid upon surrender thereof for redemption or
purchase, the principal shall, until paid, bear interest from the date fixed for
redemption or purchase at the rate prescribed therefor in the Debenture until
paid in full.
(b) The redemption or purchase price shall be paid prior to
12:00 noon,
New York time, on the date of such redemption or purchase or at such
earlier time as the Company determines and specifies in the notice of redemption
or purchase, provided that the Company shall deposit with the Indenture Trustee
an amount sufficient to pay the redemption or purchase price by 10:00 a.m.,
New
York time, on the date such redemption or purchase price is to be paid.
SECTION 3.05. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking
fund.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Payment of Principal and Interest.
The Company shall duly and punctually pay or cause to be paid
the principal of and interest on, the Debentures at the time and place and in
the manner provided herein.
SECTION 4.02. Maintenance of Office or Agency.
So long as the Debentures remain Outstanding, the Company
agrees to maintain an office or agency in the Borough of Manhattan, The City of
New York, with respect to such Debentures and at such other location or
locations as may be designated as provided in this Section 4.02, where (i)
Debentures may be presented for payment, (ii) Debentures may be presented as
hereinabove authorized for registration of transfer, and (iii) notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be given or served, such designation to continue with respect to such office
or agency until the Company shall, by written notice signed by an Authorized
Officer and delivered to the Indenture Trustee, designate some other office or
agency for such purposes or any of them. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Indenture
Trustee, and the Company hereby appoints the Indenture Trustee as its agent to
receive all such presentations, notices and demands.
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SECTION 4.03. Paying Agent.
(a) If the Company shall appoint one or more Paying Agents for
the Debentures, other than the Indenture Trustee, the Company shall cause each
such Paying Agent to execute and deliver to the Indenture Trustee an instrument
in which such agent shall agree with the Indenture Trustee, subject to the
provisions of this Section 4.03:
(i) that it will hold all sums held by it as such
agent for the payment of the principal of and interest on, the
Debentures (whether such sums have been paid to it by the
Company or by any other obligor of such Debentures) in trust
for the benefit of the Persons entitled thereto;
(ii) that it will give the Indenture Trustee notice
of any failure by the Company (or by any other obligor of such
Debentures) to make any payment of the principal of and
interest on, the Debentures when the same shall be due and
payable;
(iii) that it will, at any time during the
continuance of any failure referred to in the preceding
paragraph (a)(ii) above, upon the written request of the
Indenture Trustee, forthwith pay to the Indenture Trustee all
sums so held in trust by such Paying Agent; and
(iv) that it will perform all other duties of Paying
Agent as set forth in this Indenture.
(b) If the Company shall act as its own Paying Agent with
respect to any of the Debentures, it shall on or before each due date of the
principal of or interest on, the Debentures, set aside, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
such principal or interest so becoming due on Debentures until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and shall
promptly notify the Indenture Trustee of such action, or any failure (by it or
any other obligor on such Debentures) to take such action. Whenever the Company
shall have one or more Paying Agents for any of the Debentures, it will, prior
to each due date of the principal or interest on any Debentures, deposit with
the Paying Agent a sum sufficient to pay the principal or interest so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal or interest, and (unless such Paying Agent is the Indenture
Trustee) the Company shall promptly notify the Indenture Trustee of this action
or failure so to act.
(c) Notwithstanding anything in this Section to the contrary,
(i) the agreement to hold sums in trust as provided in this Section 4.03 is
subject to the provisions of Section 11.05, and (ii) the Company may at any
time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any Paying Agent to pay, to
the Indenture Trustee all sums held in trust by the Company or such Paying
Agent, such sums to be held by the Indenture Trustee upon the same terms and
conditions as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying
28
Agent to the Indenture Trustee, such Paying Agent shall be released from all
further liability with respect to such sums.
SECTION 4.04. Limitations on Indebtedness.
The Company shall not, and shall not permit any Subsidiary to,
incur, create, assume or suffer to exist any Indebtedness other than:
(a) the Indebtedness represented by the Credit Agreement and
the obligations related thereto; provided, however that, after giving effect to
any such incurrence, the aggregate principal amount of all Indebtedness incurred
under this clause (a) and outstanding at any time shall not exceed $320,000,000;
(b) Senior Indebtedness (in addition to Indebtedness incurred
pursuant to clause (a) above) not to exceed $50,000,000 at any time outstanding;
(c) ordinary trade payables which are not yet due and payable
and are not the result of a transaction which is essentially the borrowing of
money;
(d) Indebtedness owed to and held by the Company or a
Subsidiary; provided, however, that (1) any subsequent issuance or transfer of
any Capital Stock which results in any such Subsidiary ceasing to be a
Subsidiary or any subsequent transfer of such Indebtedness (other than to the
Company or a Subsidiary) shall be deemed, in each case, to constitute the
incurrence of such Indebtedness by the obligor thereon and (2) if the Company is
the obligor on such Indebtedness, such Indebtedness is expressly subordinated to
the prior payment in full in cash of all obligations with respect to the
Debentures;
(e) Indebtedness existing as of the Issue Date (other than
Indebtedness under clause (a) or (g) hereof);
(f) Indebtedness that constitutes Subordinated Hallmark
Obligations;
(g) the Debentures and Contingent Appreciation Certificates;
(h) Preferred Stock (other than Disqualified Stock) to the
extent classified as "indebtedness" under GAAP;
(i) Hedging Obligations;
(j) Refinancing Indebtedness in respect of Indebtedness
incurred pursuant to clause (d), (e), (f) or (g) or this clause (j);
(k) obligations in respect of performance, bid and surety
bonds and completion guarantees provided by the Company or any Subsidiary in the
ordinary course of business;
29
(l) Indebtedness constituting Subordinated Obligations owed to
and held by Hallmark Cards or its Subsidiaries in which no cash payment of
principal, premium, interest or otherwise is due or payable on or prior to 180
days after the Maturity Date;
(m) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided, however, that
such Indebtedness is extinguished within two Business Days of its incurrence;
and
(n) Indebtedness of the Company, including Indebtedness in
respect of secured purchase money financings (including Capital Lease
Obligations), in an aggregate principal amount which, when taken together with
all other Indebtedness of the Company outstanding on the date of such incurrence
(other than Indebtedness permitted by clauses (a) through (m) above) does not
exceed $30,000,000; provided, however, that if such Indebtedness is not Senior
Indebtedness, then the Company shall not incur or permit to exist any Lien of
any nature whatsoever on any of its properties (including Capital Stock of a
Subsidiary), whether owned at the Issue Date or thereafter acquired, securing
such Indebtedness, without effectively providing that the Debentures shall be
secured equally and ratably with (or prior to) the obligations so secured for so
long as such obligations are so secured.
SECTION 4.05. Restricted Payments.
(a) The Company shall not, and shall not permit any
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Subsidiary makes such Restricted Payment:
(i) a Default shall have occurred and be continuing
(or would result therefrom); or
(ii) the aggregate amount of such Restricted Payment
and all other Restricted Payments since the Issue Date would
exceed the sum of (without duplication):
(A) 50% of the Consolidated Net Income
accrued on a cumulative basis during the period
(treated as one accounting period) from the beginning
of the fiscal quarter immediately following the
fiscal quarter during which the Issue Date occurs to
the end of the most recent fiscal quarter ending at
least 45 days prior to the date of such Restricted
Payment (or, (1) in case such Consolidated Net Income
shall be a deficit, 100% of the Consolidated Adjusted
Net Loss, or, (2) to the extent such Consolidated
Adjusted Net Loss shall not be a deficit, zero); plus
(B) 100% of the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of
its Capital Stock (other than Disqualified Stock)
subsequent to the Issue Date (other than an issuance
or sale to a Subsidiary of the Company and other than
an issuance or sale to an employee stock ownership
plan or to a trust established by the
30
Company or any of its Subsidiaries for the benefit of
their employees) and 100% of any cash capital
contribution received by the Company from its
shareholders subsequent to the Issue Date; plus
(C) the amount by which Indebtedness of the
Company is reduced upon the conversion or exchange
(other than by a Subsidiary of the Company),
including as a result of an exercise of the right to
receive shares of Class A Common Stock of the Company
under the Contingent Appreciation Certificates,
subsequent to the Issue Date of any Indebtedness of
the Company convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair value of
any other property, distributed by the Company upon
such conversion or exchange); plus
(D) an amount equal to the net reduction in
the Investments (other than Permitted Investments)
made by the Company or any Subsidiary in any Person
(other than the Company or any of its Wholly Owned
Subsidiaries) resulting from repurchases, repayments
or redemptions of such Investments by such Person,
proceeds realized on the sale of such Investment and
proceeds representing the return of capital
(excluding dividends and distributions), in each case
received by the Company or any such Subsidiary;
provided, however, that the foregoing amount shall
not exceed, in the case of any such Person, the
amount of Investments (excluding Permitted
Investments) previously made (and treated as a
Restricted Payment) by the Company or any such
Subsidiary in such Person; minus
(E) an amount equal to any payments,
purchases, repurchases, redemptions, defeasances or
other acquisitions or retirements for value of
Assumed Obligations in excess of $40,000,000 (which
$40,000,000 or lesser amount is not paid with amounts
available pursuant to clauses (A) or (B) above) less
such payments, purchases, redemptions, defeasances or
other acquisitions or retirements for value, from
amounts available pursuant to clauses (A) or (B)
above.
(b) Subject to compliance with Section 4.05(a)(i) hereof, the
preceding provisions shall not prohibit:
(i) any Restricted Payment made out of the Net Cash
Proceeds of the substantially concurrent sale of, or made by
exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary of the Company or an employee stock ownership
plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a
substantially concurrent cash capital contribution received by
the Company from its shareholders; provided, however, that (A)
such Restricted Payment shall be excluded in the calculation
of the aggregate amount of
31
Restricted Payments and (B) the Net Cash Proceeds from such
sale or cash capital contribution (to the extent so used for
such Restricted Payment) shall be excluded from the
calculation of amounts under clause (ii)(B) of paragraph (a)
above;
(ii) any purchase, repurchase, redemption, defeasance
or other acquisition or retirement for value of Subordinated
Obligations made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Indebtedness (other than
Senior Indebtedness) which is permitted to be incurred
pursuant to Section 4.04 or out of the Net Cash Proceeds (less
any such proceeds used to purchase, repurchase, redeem,
defease or otherwise acquire or retire for value any Assumed
Obligations) of the substantially concurrent sale of, or made
by exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold
to a Subsidiary of the Company or an employee stock ownership
plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a
substantially concurrent cash capital contribution received by
the Company from its shareholders; provided, however, that (A)
such Restricted Payment shall be excluded in the calculation
of the aggregate amount of Restricted Payments and (B) the Net
Cash Proceeds from any such sale or such cash capital
contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts
under clause (ii)(B) of paragraph (a) above; and provided,
further, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall
be excluded in the calculation of the amount of Restricted
Payments;
(iii) the payment from the proceeds from the issuance
of the Debentures of the obligations owed to Hallmark Cards or
its Affiliates as set forth in Schedule 2.3 to the Securities
Purchase Agreement on the Issue Date; or
(iv) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
dividend would have complied with this covenant; provided,
however, that at the time of payment of such dividend, no
other Default shall have occurred and be continuing (or result
therefrom); provided further, however, that such dividend
shall be included in the calculation of the amount of
Restricted Payments.
SECTION 4.06. Limitation on Affiliate Transactions
(a) The Company shall not, and shall not permit any Subsidiary
to, enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any Affiliate of the Company (an "Affiliate Transaction")
unless:
(i) the terms of the Affiliate Transaction are no
less favorable to the Company or such Subsidiary than those
that could be obtained at the time of
32
the Affiliate Transaction in arm's-length dealings with a
Person who is not an Affiliate;
(ii) if such Affiliate Transaction (other than an
Affiliate Transaction relating to the execution of a
Distribution and Programming Agreement) involves an amount in
excess of $5.0 million, or, in the case of any Affiliate
Transaction relating to the execution of a Distribution and
Programming Agreement, an amount in excess of $15.0 million,
the terms of the Affiliate Transaction are set forth in
writing and a majority of the directors who are not employees
of the Company or employees or directors of such Affiliate and
who are disinterested with respect to such Affiliate
Transactions (the "independent directors") have determined in
good faith that the criteria set forth in clause (i) above are
satisfied and have approved the relevant Affiliate Transaction
as evidenced by a Board Resolution; provided, however, that if
the requisite number of independent directors to act cannot be
convened to act, the Company may instead obtain an opinion
described in clause (iii) below; and
(iii) if such Affiliate Transaction (other than any
Affiliate Transaction relating to the execution of a
Distribution and Programming Agreement) involves an amount in
excess of $25.0 million, or, in the case of an Affiliate
Transaction relating to the execution of a new Distribution
and Programming Agreement or a modification to or amendment
of, or other revision to, an existing Distribution and
Programming Agreement, an amount in excess of $75.0 million,
the Board of Directors shall have received a written opinion
from an investment banking firm, independent appraiser or
comparable professional, in any case of recognized national or
international prominence, that is not an Affiliate of the
Company to the effect that such Affiliate Transaction is fair,
from a financial standpoint, to the Company and its
Subsidiaries.
(b) The provisions of the preceding paragraph (a) shall not
prohibit:
(i) any regularly scheduled payments of dividends and
distributions on Capital Stock of the Company or any
Subsidiary of the Company permitted to be made pursuant to
Section 4.05, or payments on or with respect to the
Subordinated Hallmark Obligations;
(ii) any issuance of 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 for directors, officers, consultants and
employees of the Company approved by the Board of Directors;
(iii) the payment of reasonable fees to directors of
the Company and its Subsidiaries who are not employees of the
Company or its Subsidiaries;
(iv) any transaction with a Wholly Owned Subsidiary
which would constitute an Affiliate Transaction solely because
the Company or a Wholly
33
Owned Subsidiary owns an equity interest in or otherwise
controls such Wholly Owned Subsidiary;
(v) the issuance or sale of any Capital Stock (other
than Disqualified Stock) of the Company;
(vi) payments and performance of obligations in
connection with Distribution and Programming Agreements
executed in accordance with the requirements, if any, of the
preceding paragraph (a); and
(vii) payment and performance of obligations under or
in connection with any Affiliate Transaction pursuant to
agreements existing on the Issue Date (excluding any
amendments, modifications, renewals or other revisions to such
agreements).
SECTION 4.07. Covenants as to the Trust.
For so long as the Securities issued by the Trust remain
outstanding, the Company shall (i) maintain 100% direct or indirect ownership of
the Common Securities of the Trust; provided, however, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Securities and (ii) cause the Trust (a) to remain a
statutory business trust, (b) to observe all of its obligations under, including
to redeem all of the Trust Securities of the Trust to the extent that the Trust
has funds available to make any required payments as provided by, the
Declaration, and (c) to otherwise continue to be treated as a grantor trust for
United States federal income tax purposes.
ARTICLE V
HOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE INDENTURE TRUSTEE
SECTION 5.01. Company to Furnish Indenture Trustee Names and
Addresses of Holders.
The Company shall furnish or cause to be furnished to the
Indenture Trustee (a) on a quarterly basis at least five Business Days prior to
each Regular Record Date a list, in such form as the Indenture Trustee may
reasonably require, of the names and addresses of the Holders of the Debentures
as of such Regular Record Date, provided that the Company shall not be obligated
to furnish or cause to furnish such list at any time that the list shall not
differ in any respect from the most recent list furnished to the Indenture
Trustee by the Company and (b) at such other times as the Indenture Trustee may
request in writing within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished; provided, however, that, in either
case, no such list need be furnished for the Debentures if the Indenture Trustee
shall be the Debenture Registrar; and provided further, that the Indenture
Trustee shall promptly upon receipt furnish any information required pursuant to
this Section 5.01 to the Property Trustee.
34
SECTION 5.02. Preservation Of Information; Communications With
Holders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, all information as to the names and addresses of
the Holders of the Debentures contained in the most recent list furnished
thereto as provided in Section 5.01 and as to the names and addresses of Holders
of the Debentures received by the Indenture Trustee in its capacity as the
Debenture Registrar (if acting in such capacity).
(b) The Indenture Trustee may destroy any list furnished to it
as provided in Section 5.01 upon receipt of a new list so furnished.
(c) Holders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Holders with respect to their rights under
this Indenture or under the Debentures.
SECTION 5.03. Reports by the Company.
(a) The Company covenants and agrees to file with the
Indenture Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe) that
the Company files with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Indenture Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations.
(b) The Company covenants and agrees to deliver to the
Indenture Trustee, within 30 days after the end of each quarterly period, an
Officer's Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding quarterly period has been made under the
supervision of the signing officers with a view to determining whether each of
the Company and its Subsidiaries has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such officer
signing such certificate, to the best of his or her knowledge, whether the
Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and whether the Company is in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
whether to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Debentures is prohibited or if such event has occurred,
a description of the event and what action the Company is taking or proposes to
take with respect thereto.
35
So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, year-end financial
statements delivered pursuant to Section 5.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article IV hereof or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation.
The Company shall, so long as any of the Debentures are
outstanding, deliver to the Indenture Trustee, within five (5) Business Days of
any officer of the Company becoming aware of any Default or Event of Default, an
Officer's Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery service that
provides for evidence of receipt, to the Holders, as their names and addresses
appear upon the Debenture Register, within 30 days after the filing thereof with
the Indenture Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to subsections (a) and (b) of this
Section as may be required by rules and regulations prescribed from time to time
by the Commission.
(d) Notwithstanding anything contained herein to the contrary,
the Indenture Trustee shall promptly upon receipt furnish any information
required pursuant this Section 5.03 to the Property Trustee.
SECTION 5.04. Reports by the Indenture Trustee.
(a) On or before July 15 in each year in which any of the
Debentures are Outstanding, the Indenture Trustee shall transmit by facsimile
followed by mail, first class postage prepaid, to the Holders, as their names
and addresses appear upon the Debenture Register, a brief report dated as of the
preceding May 15, if and to the extent required under Section 313(a) of the
Trust Indenture Act.
(b) The Indenture Trustee shall comply with Section 313(b) and
313(c) of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Indenture Trustee with the Company.
36
ARTICLE VI
REMEDIES OF THE INDENTURE TRUSTEE AND HOLDERS
ON EVENT OF DEFAULT
SECTION 6.01. Events of Default.
(a) Whenever used herein with respect to the Debentures,
"Event of Default" means any one or more of the following events that has
occurred and is continuing:
(i) the Company defaults in the payment of any
installment of interest upon any of the Debentures, as and
when the same shall become due and payable, and continuance of
such default for a period of 15 days;
(ii) the Company defaults in the payment of the
principal on any of the Debentures as and when the same shall
become due and payable whether at maturity, upon redemption,
by declaration or otherwise;
(iii) the Company fails to observe or perform any of
its covenants or agreements contained in Section 4.04 or
Section 4.05 of this Indenture for a period of 30 days after
the earlier of actual knowledge by an officer of the Company
or the date on which written notice of such failure, requiring
the same to be remedied and stating that such notice is a
"Notice of Default" hereunder, shall have been given to the
Company by the Indenture Trustee, by registered or certified
mail, or to the Company and the Indenture Trustee by the
Holders of at least 25% in principal amount of the Debentures
Outstanding;
(iv) the Company fails to observe or perform any
other of its covenants or agreements contained in this
Indenture, the Contingent Appreciation Certificate Agreement,
the Contingent Appreciation Certificates or the Preferred
Securities Guarantee for a period of 60 days after the earlier
of actual knowledge by an officer of the Company or the date
on which written notice of such failure, requiring the same to
be remedied and stating that such notice is a "Notice of
Default" hereunder, shall have been given to the Company by
the Indenture Trustee, by registered or certified mail, or to
the Company and the Indenture Trustee by the Holders of at
least 25% in principal amount of the Debentures Outstanding;
(v) Hallmark Cards or any of its Affiliates
terminates (or any such Person notifies the Company that it
intends to terminate) the right of the Company or any of its
Subsidiaries to use the "Hallmark" name or the "Crown" name in
their respective television services or on or with respect to
any cable, satellite or other television channels owned or
operated by the Company or any of its Subsidiaries.
(vi) Hallmark Cards or any of its Affiliates fails to
observe or perform any of its covenants or agreements
contained in the Subordination and
37
Support Agreement for a period of 30 days after the earlier of
actual knowledge by an officer of Hallmark Cards or an officer
of any of its Affiliates or the date on which written notice
of such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default," shall have been
given to Hallmark Cards and the Company by the Indenture
Trustee, by registered or certified mail, or to Hallmark
Cards, the Company and the Indenture Trustee by the Holders of
at least 25% in principal amount of the Debentures
Outstanding;
(vii) the Trust or any trustee of the Trust fails to
observe or perform any of its covenants or agreements
contained in the Declaration or the Preferred Securities or
otherwise established for a period of 30 days after the
earlier of actual knowledge by a trustee, the Trust or an
officer of the Company or the date on which written notice of
such failure, requiring the same to be remedied and stating
that such notice is a "Notice of Default," shall have been
given to the Trust by the Indenture Trustee, by registered or
certified mail, or to the Trust and the Indenture Trustee by
the Holders of at least 25% of the issued and outstanding
Preferred Securities;
(viii) the Holders of not less than 25% of the
Debentures (or holders of not less than 25% of the Preferred
Securities, if applicable) at the time Outstanding, as
determined in accordance with Section 8.04 hereof, shall
deliver a written notice to the Company and the Indenture
Trustee that any of the representations and warranties of the
Company contained in Article IV of the Securities Purchase
Agreement were not true and correct in all material respects
as of the Issue Date and the failure of such representation or
warranty to have been true and correct, individually or in the
aggregate, has resulted in a Material Adverse Effect (as
defined in the Securities Purchase Agreement);
(ix) Indebtedness of the Company or any Subsidiary is
not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or
accelerated exceeds $10 million;
(x) Hallmark Cards or the Company, pursuant to or
within the meaning of any Bankruptcy Law, (i) commences a
voluntary case, (ii) consents to the entry of an order for
relief against it in an involuntary case, (iii) consents to
the appointment of a Custodian of it or for all or
substantially all of its property or (iv) makes a general
assignment for the benefit of its creditors;
(xi) a court of competent jurisdiction enters an
order under any Bankruptcy Law that (i) is for relief against
Hallmark Cards or the Company in an involuntary case, (ii)
appoints a Custodian of Hallmark Cards or the Company or for
all or substantially all of their respective property, or
(iii) orders the liquidation of Hallmark Cards or the Company,
and the order or decree remains unstayed and in effect for 90
days;
38
(xii) the Trust shall have, voluntarily or
involuntarily, liquidated, dissolved, wound-up its business or
otherwise terminated its existence except in connection with
the redemption of all of the outstanding Securities of the
Trust; or
(xiii) Hallmark Cards or the Company shall have,
voluntarily or involuntarily, liquidated, dissolved, wound-up
its business or otherwise terminated its existence, other than
in connection with a merger, consolidation or other business
combination in which the surviving entity continues to conduct
the business of Hallmark Cards or the Company, as the case may
be.
(b) If an Event of Default occurs and is continuing, the
Indenture Trustee shall, upon direction from the holders of at least 25% in
principal amount of the Debentures Outstanding, declare the Debentures to be
immediately due and payable. If an Event of Default relating to clauses (x),
(xi) , (xii) or (xiii) above occurs and is continuing, the Debentures shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any holders of the Debentures or Preferred
Securities. Upon any Debentures becoming due and payable under this Section
6.01, whether automatically or by declaration, such Debentures will forthwith
mature and the entire unpaid principal amount of such Debentures plus all
accrued and unpaid interest thereon and (to the full extent permitted by
applicable law), shall be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of which are hereby
waived. In addition, the Company acknowledges that, notwithstanding the
foregoing, if an Event of Default occurs and is continuing and such event is
attributable to the failure of the Company to (i) pay interest or principal on
the Debentures on the date such interest or principal is otherwise payable (or
in the case of redemption, on the redemption date), or (ii) comply with the
covenants set forth in Article IV of the Indenture, in each such case within the
applicable grace periods, if any, provided for in Section 6.01(a) above, then,
in each case, the holders of at least 25% in aggregate liquidation amount of the
Preferred Securities may institute a proceeding (or seek other remedies)
directly against the Company for enforcement of payment to such holders of the
principal of or interest on, an aggregate principal amount of such Debentures
equal to the aggregate liquidation amount of the Preferred Securities of such
holders on or after the respective due date specified in such Debentures.
(c) At any time after the principal of and any accrued and
unpaid interest, if any, on, the Debentures shall have been so declared due and
payable, and before any judgment or decree for the payment of the amounts due
shall have been obtained or entered as hereinafter provided, the Holders of a
majority in aggregate principal amount of the Debentures then Outstanding
hereunder, by written notice to the Company and the Indenture Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Indenture Trustee a sum sufficient to pay all matured
installments of interest upon all the Debentures and the principal on the
Debentures that shall have become due otherwise than by acceleration (with
interest upon such principal and, to the extent that such payment is enforceable
under applicable law, upon overdue installments of interest, at the rate per
annum expressed in the Debentures to the date of such payment or deposit) and
the amount payable to the Indenture Trustee under Section 7.06, and (ii) any and
all Events of Default under the
39
Indenture, other than the nonpayment of principal of on the Debentures that
shall not have become due by their terms, shall have been remedied or waived as
provided in Section 6.06.
No such rescission and annulment shall extend to or shall
affect any subsequent default or impair any right consequent thereon.
(d) In case the Indenture Trustee shall have proceeded to
enforce any right with respect to the Debentures under this Indenture and such
proceedings shall have been discontinued or abandoned because of such rescission
or annulment or for any other reason or shall have been determined adversely to
the Indenture Trustee, then and in every such case the Company and the Indenture
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and the Indenture
Trustee shall continue as though no such proceedings had been taken.
SECTION 6.02. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Company covenants that (1) in case it shall default in
the payment of any installment of interest on the Debentures or (2) in case it
shall default in the payment of the principal of the Debentures when the same
shall have become due and payable, whether upon maturity of the Debentures, upon
redemption, by declaration or otherwise, then, upon demand of the Indenture
Trustee, the Company shall pay to the Indenture Trustee, for the benefit of the
Holders of the Debentures, the entire amount that then shall have been become
due and payable on the Debentures for principal or interest, or both, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law and, if the
Debentures are held by the Trust or the Indenture Trustee, without duplication
of any other amounts paid by the Trust or the Indenture Trustee in respect
thereof) upon overdue installments of interest; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Indenture Trustee under Section 7.06.
(b) If the Company shall fail to pay such amounts forthwith
upon such demand, the Indenture Trustee, in its own name and as Indenture
Trustee of the Trust, shall, upon direction from the Holders of the requisite
percentage of aggregate principal amount of Debentures then Outstanding,
institute any action or proceedings at law or in equity for the collection of
the sums so due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree, and may enforce any such judgment or final decree
against the Company or other obligor upon the Debentures and collect the amounts
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company or the creditors or property of either, the
Indenture Trustee shall, upon direction from the Holders of the requisite
percentage of aggregate principal amount of Debentures then Outstanding,
intervene in such proceedings and take any action therein that may be permitted
by
40
the court and shall (except as may be otherwise provided by law) be entitled to
file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee and of the
Holders of the Debentures allowed for the entire amount due and payable by the
Company under the Indenture at the date of institution of such proceedings and
for any additional amount that may become due and payable by the Company after
such date, and to collect and receive any amounts or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of
the amount payable to the Indenture Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Holders of the Debentures to make such payments to the
Indenture Trustee, and, in the event that the Indenture Trustee shall consent to
the making of such payments directly to such Holders, to pay to the Indenture
Trustee any amount due thereto under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to the Debentures,
may be enforced by the Indenture Trustee without the possession of any of the
Debentures, or the production thereof at any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Indenture Trustee
shall be brought in its own name as Indenture Trustee of the Trust, and any
recovery of judgment shall, after provision for payment to the Indenture Trustee
of any amounts due under Section 7.06, be for the ratable benefit of the Holders
of the Debentures.
In case of an Event of Default hereunder, the Indenture
Trustee shall, upon direction from the Holders of the requisite percentage of
aggregate principal amount of Debentures then Outstanding, proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Indenture Trustee shall, subject to contrary
direction from the Holders of the requisite percentage of aggregate principal
amount of Debentures then Outstanding, deem most effectual to protect and
enforce any of such rights, either at law or in equity or in bankruptcy or
otherwise, whether for the specific enforcement of any covenant or agreement
contained in the Indenture or in aid of the exercise of any power granted in
this Indenture, or to enforce any other legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the
Indenture Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Debentures or the rights of any Holder thereof or to authorize the
Indenture Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.03. Application of Amounts Collected.
Any amounts collected by the Indenture Trustee pursuant to
this Article with respect to the Debentures shall be applied in the following
order, at the date or dates fixed by the Indenture Trustee and, in case of the
distribution of such amounts on account of principal or interest, upon
presentation of the Debentures, and notation thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
41
FIRST: To the payment of costs and expenses of
collection and of all amounts payable to the Indenture Trustee
under Section 7.06;
SECOND: To the payment of all Senior Indebtedness of
the Company if and to the extent required by Section 13.02;
and
THIRD: To the payment of the amounts then due and
unpaid upon the Debentures for principal and interest, in
respect of which or for the benefit of which such amounts have
been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on the
Debentures for principal and interest, respectively.
SECTION 6.04. Limitation on Suits.
(a) No Holder of any Debentures (nor any holder of Preferred
Securities acting in accordance with its rights under this Indenture) shall have
any right by virtue or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless (i) such Holder (or holder of
Preferred Securities, if applicable) previously shall have given to the
Indenture Trustee written notice of an Event of Default and of the continuance
thereof with respect to the Debentures specifying such Event of Default, as
hereinbefore provided; (ii) the Holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding (or holders of not less than
25% of the Preferred Securities Outstanding, if applicable) shall have made
written request upon the Indenture Trustee to institute such action, suit or
proceeding in its own name as Indenture Trustee hereunder; (iii) such Holder
shall have offered to the Indenture Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby; and (iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 60 day period, the Holders of a
majority in principal amount of the Debentures (or holders of a majority of the
Preferred Securities Outstanding, if applicable) do not give the Indenture
Trustee a direction inconsistent with the request.
(b) The limitation set forth in Section 6.04(a) shall not
apply to any suit instituted by a Holder (or holder of Preferred Securities, if
applicable) (i) for the enforcement of the payment of the principal of or
interest on the Debentures on or after the respective due date expressed in such
Debentures or established pursuant to this Indenture or (ii) pertaining to the
failure of the Company to comply for 30 days with its obligations and covenants
set forth in Section 4.04 or Section 4.05.
(c) Notwithstanding any payment made to such Holder (or holder
of Preferred Securities, if applicable) by the Company in connection with a
direct action, the Company shall remain obligated to pay the principal of or
interest on the Debentures held by the Trust or the Property Trustee, and the
Company shall be subrogated to the rights of the Holder (or holder of such
Preferred Securities, if applicable) with respect to payments on the Debentures
(or Preferred Securities, if applicable) to the extent of any payments made by
the Company to such Holder (or
42
holder of Preferred Securities, if applicable) in any direct action; provided,
however, that the Company shall not be permitted to exercise any rights of
subrogation until all obligations under the Preferred Securities and the
Contingent Appreciation Certificates shall have been repurchased, redeemed,
defeased or otherwise acquired or retired for value or paid in full.
(d) Notwithstanding anything contained herein to the contrary,
any other provisions of this Indenture, the right of any Holder of Debentures to
receive payment of the principal of and interest on the Debentures, as therein
provided, on or after the respective due dates expressed in the Debentures (or
in the case of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such Holder and
by accepting the Debentures hereunder it is expressly understood, intended and
covenanted by the taker and Holder of the Debentures with every other such taker
and Holder and the Indenture Trustee, that no one or more Holders of Debentures
shall have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
Holders of any other of the Debentures, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of the Debentures. For the protection and
enforcement of the provisions of this Section, each and every Holder and the
Indenture Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 6.05. Rights and Remedies Cumulative; Delay or
Omission Not Waiver.
(a) Except as otherwise provided in Section 2.07, all powers
and remedies given by this Article to the Indenture Trustee or to the Holders
shall, to the extent permitted by law, be deemed cumulative and not exclusive of
any other powers and remedies available to the Indenture Trustee or the Holders
of the Debentures, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Debentures.
(b) No delay or omission of the Indenture Trustee or of any
Holder of any of the Debentures to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or on
acquiescence therein; and, subject to the provisions of Section 6.04, every
power and remedy given by this Article or by law to the Indenture Trustee or the
Holders may be exercised from time to time, and as often as shall be deemed
expedient, by the Indenture Trustee or by the Holders.
SECTION 6.06. Control by Holders.
(a) The Holders of a majority in aggregate principal amount of
the Debentures at the time Outstanding, determined in accordance with Section
8.04, shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or exercising
any right, trust or power conferred on the Indenture Trustee with
43
respect to the Debentures (including, without limitation, with respect to the
provisions of Section 6.01 hereof); provided, however, that (i) such direction
shall not be in conflict with any rule of law or with this Indenture; and (ii)
subject to the provisions of Section 7.01, the Indenture Trustee shall have the
right to decline to follow any such direction if the Indenture Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the Indenture
Trustee, determine that the proceeding so directed would involve the Indenture
Trustee in personal liability or might be unduly prejudicial to the Holders not
involved in the proceeding. The Holders of a majority in aggregate principal
amount of the Debentures (or holders of a majority of the Preferred Securities,
if so permitted) at the time Outstanding affected thereby, determined in
accordance with Section 8.04, may on behalf of the Holders of all of the
Debentures waive any past Default in the performance of any of the covenants
contained herein and its consequences, except that a waiver of a Default in the
payment of the principal or interest on, any of the Debentures as and when the
same shall become due by the terms thereof otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal has been deposited with the Indenture
Trustee (in accordance with Section 6.01(d)) shall require the consent of each
affected Holder. Upon any such waiver, the Default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the Company, the
Indenture Trustee and the Holders of the Debentures shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon. In the event the Holders of the Debentures fail to annul any
declaration and waive the Default, the holders of the majority of the aggregate
liquidation amount of the Preferred Securities shall have the right to waive any
past Default in the performance of any of the covenants contained herein and its
consequences to the extent such right is vested in the Holders of the Debentures
under this Section 6.06(a).
(b) The Company and the Indenture Trustee acknowledge that
pursuant to the Declaration, the holders of Preferred Securities are entitled,
in the circumstances and subject to the limitations set forth therein, to
commence a direct action as creditors with respect to any Event of Default under
the Indenture, the Debentures or the Preferred Securities Guarantee.
SECTION 6.07. Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of the
Debentures by such Xxxxxx's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken or omitted by it as Indenture Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Indenture Trustee, to any suit instituted by any Holder
(or holder of Preferred Securities, if applicable), or group of Holders, (or
group of holders of Preferred Securities, if applicable) holding more than 10%
in aggregate principal amount of the Debentures Outstanding, or to any suit
instituted by any Holder for the enforcement of the payment of the
44
principal of or interest on, the Debentures, on or after the respective due date
expressed in such Debentures or established pursuant to this Indenture.
ARTICLE VII
CONCERNING THE INDENTURE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities of Indenture
Trustee.
(a) The Indenture Trustee, prior to the occurrence of an Event
of Default with respect to the Debentures and after the curing of all Events of
Default with respect to the Debentures that may have occurred, shall undertake
to perform with respect to the Debentures such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants shall be
read into this Indenture against the Indenture Trustee. In case an Event of
Default with respect to the Debentures has occurred (that has not been cured or
waived), the Indenture Trustee shall exercise with respect to the Debentures
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Indenture Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default
with respect to the Debentures and after the curing or waiving
of all such Events of Default that may have occurred:
(A) the duties and obligations of the
Indenture Trustee shall be determined solely by the
express provisions of this Indenture, and the
Indenture Trustee shall not be liable with respect to
the Debentures except for the performance of such
duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against
the Indenture Trustee; and
(B) in the absence of bad faith on the part
of the Indenture Trustee, the Indenture Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Indenture Trustee and conforming to the
requirements of this Indenture; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Indenture Trustee, the Indenture
Trustee shall be under a duty to examine the same to
determine whether they conform to the requirement of
this Indenture;
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer or Responsible Officers of
45
the Indenture Trustee, unless it shall be proved that the
Indenture Trustee, was negligent in ascertaining the pertinent
facts;
(iii) the Indenture Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a majority in principal amount of the Debentures
Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust or power conferred
upon the Indenture Trustee under this Indenture with respect
to the Debentures; and
(iv) None of the provisions contained in this
Indenture shall require the Indenture Trustee to expend or
risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such
funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such
risk is not reasonably assured to it.
(c) Notwithstanding anything to the contrary contained herein,
the following Persons are hereby irrevocably authorized and empowered (in their
own names or otherwise) to take any actions required or allowed hereunder to be
taken with respect to the Debentures, including, without limitation, at any time
that an Event of Default has occurred and is continuing:
(i) the Indenture Trustee, upon direction by the
Holders of at least 25% of the aggregate principal amount of
Debentures Outstanding (or such greater number as may be
specified herein);
(ii) if the Indenture Trustee fails to promptly act
as directed in accordance with the foregoing clause, the
Property Trustee of the Trust, upon direction by the holders
of at least 25% of the Preferred Securities Outstanding (or
such greater number as may be specified herein); and
(iii) if the Property Trustee fails to promptly act
as directed in accordance with the foregoing clause, by the
holders of at least 25% of the Preferred Securities
Outstanding (or such greater number as may be specified
herein).
SECTION 7.02. Certain Rights of Indenture Trustee.
Except as otherwise provided in Section 7.01:
(a) The Indenture Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
security or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
46
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company, by the President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer thereof (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Indenture Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or suffered
or omitted hereunder in good faith and in reliance thereon;
(d) If an Event of Default shall occur and be continuing, the
Indenture Trustee shall be under no obligation to exercise any of the rights,
powers, trusts or duties vested in it by this Indenture at the request, order or
direction of any of the Holders of Debentures or the holders of Preferred
Securities, pursuant to the provisions of this Indenture, unless such Holders of
Debentures or the holders of Preferred Securities shall have offered to the
Indenture Trustee reasonable indemnity against the costs, expenses and
liabilities that may be incurred therein or thereby; nothing contained herein
shall, however, relieve the Indenture Trustee of the obligation, upon the
occurrence of an Event of Default (that has not been cured or waived) to
exercise with respect to the Debentures such of the rights and powers vested in
it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(e) The Indenture Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture, including, without limitation, taking any action which is
authorized or permitted by the terms of this Indenture, but which is prohibited
under Section 16.06;
(f) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security, or other papers or documents, unless requested in
writing so to do by the Holders of not less than a majority in principal amount
of the Debentures Outstanding affected thereby (determined as provided in
Section 8.04); provided, however, that if the payment within a reasonable time
to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Indenture Trustee, not reasonably assured to the Indenture Trustee by the
security afforded to it by the terms of this Indenture, the Indenture Trustee
may require reasonable indemnity against such costs, expenses or liabilities as
a condition to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Indenture Trustee, shall be
repaid by the Company upon demand; and
(g) The Indenture Trustee may execute any of the rights,
powers or trusts hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
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(h) The Trustee shall not be charged with knowledge of any
Default or Event of Default with respect to the Debentures unless either
(i) a Responsible Officer of the Trustee shall have
actual knowledge of such Default or Event of Default; or
(ii) written notice of such Default or Event of
Default shall have been given to the Trustee by the Company or
by any Holder of the Debentures or any holder of Preferred
Securities.
SECTION 7.03. Indenture Trustee Not Responsible for Recitals
or Issuance or Debentures.
(a) The recitals contained herein and in the Debentures shall
be taken as the statements of the Company and the Indenture Trustee assumes no
responsibility for the correctness of the same.
(b) The Indenture Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debentures.
(c) The Indenture Trustee shall not be accountable for the use
or application by the Company of any of the Debentures or of the proceeds
thereof, or for the use or application of any amounts paid over by the Indenture
Trustee in accordance with any provision of this Indenture, or for the use or
application of any amounts received by any Paying Agent other than the Indenture
Trustee.
SECTION 7.04. May Hold Debentures.
The Indenture Trustee or any Paying Agent or Debenture
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not
Indenture Trustee, Paying Agent or Debenture Registrar.
SECTION 7.05. Amounts Held in Trust.
Subject to the provisions of Section 11.05, all amounts
received by the Indenture Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by law.
The Indenture Trustee shall be under no liability for interest on any amounts
received by it hereunder except such as it may agree in writing with the Company
to pay thereon.
SECTION 7.06. Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Indenture
Trustee, and the Indenture Trustee shall be entitled to, such compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), as the Company and the Indenture
Trustee may from time to time agree in writing, for all services rendered by it
in the execution of the Trust hereby created and in the exercise and performance
of any of the
48
powers and duties hereunder of the Indenture Trustee, and, except as otherwise
expressly provided herein, the Company shall pay or reimburse the Indenture
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Indenture Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. The Company also covenants to indemnify the
Indenture Trustee (and its officers, agents, directors and employees) for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Indenture Trustee and arising out of
or in connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim of liability in the
premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Indenture Trustee and to pay or reimburse the
Indenture Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness shall be secured
by a lien prior to that of the Debentures upon all property and funds held or
collected by the Indenture Trustee as such, except funds held in trust for the
benefit of the Holders of the Debentures.
(c) Whenever the Indenture Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01(a)(x)
or Section 6.01(a)(xi), the expenses (including the reasonable fees and expenses
of its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable bankruptcy, insolvency or other
similar law.
(d) The provisions of this Section 7.06 shall survive the
resignation or removal of the Trustee and the termination of this Indenture.
SECTION 7.07. Reliance on Officer's Certificate.
Except as otherwise provided in Section 7.01, whenever in the
administration of the provisions of this Indenture the Indenture Trustee shall
deem it necessary or desirable that a matter be proved or established prior to
taking or suffering or omitting to take any action hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the Indenture
Trustee, be deemed to be conclusively proved and established by an Officer's
Certificate delivered to the Indenture Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Indenture Trustee, shall
be full warrant to the Indenture Trustee for any action taken, suffered or
omitted to be taken by it under the provisions of this Indenture upon the faith
thereof.
SECTION 7.08. Disqualification; Conflicting Interests.
If the Indenture Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Indenture Trustee and the Company shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
49
SECTION 7.09. Corporate Indenture Trustee Required;
Eligibility.
There shall at all times be a Indenture Trustee with respect
to the Debentures issued hereunder which shall (i) be a "United States person"
under the Code and not be an Affiliate of the Company; and (ii) be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a corporation
or other Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 250 million U.S.
dollars ($250,000,000), and subject to supervision or examination by Federal,
State, Territorial, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority referred to
above, then for the purposes of this Section, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately in
the manner and with the effect specified in Section 7.10.
SECTION 7.10. Resignation and Removal; Appointment of
Successor.
(a) The Indenture Trustee or any successor hereafter
appointed, may at any time resign by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first class postage
prepaid, to the Company and the Holders of the Debentures, as their names and
addresses appear upon the Debenture Register. Except as provided in paragraph
(c) below, upon receiving such notice of resignation, the Company shall promptly
appoint a successor trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument shall be delivered
to the resigning Indenture Trustee and one copy to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
Indenture Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee with respect to the Debentures, or any Holder
of the Debentures who has been a bona fide Holder of the Debentures for at least
six months may on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(i) the Indenture Trustee shall fail to comply with
the provisions of subsection (a) of Section 5.04 after written
request therefor by the Company or by any Holder who has been
a bona fide Holder of the Debentures for at least six months;
or
(ii) the Indenture Trustee shall cease to be eligible
in accordance with the provisions of Section 7.09 and shall
fail to resign after written request therefor by the Company
or by any such Holder; or
50
(iii) the Indenture Trustee shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or
commence a voluntary bankruptcy proceeding, or a receiver of
the Indenture Trustee or of its property shall be appointed or
consented to, or any public officer shall take charge or
control of the Indenture Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Indenture Trustee and appoint
a successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the
Indenture Trustee so removed and one copy to the successor trustee, or, unless
the Indenture Trustee's duty to resign is stayed as provided herein, any Holder
who has been a bona fide Holder of the Debentures for at least six months may,
on behalf of that Xxxxxx and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, remove the Indenture Trustee and
appoint a successor trustee.
(c) Notwithstanding anything contained herein to the contrary,
the Holders of a majority in aggregate principal amount of the Debentures at the
time Outstanding may at any time remove the Indenture Trustee by so notifying
the Indenture Trustee and may appoint a successor trustee.
(d) Any resignation or removal of the Indenture Trustee and
appointment of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the successor
trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed and at any time there shall be only one Indenture Trustee with
respect to the Debentures.
SECTION 7.11. Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor
trustee, every such successor trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Indenture Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Indenture Trustee; but, on the
request of the Company or the successor trustee, such retiring Indenture Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, trusts and duties
of the retiring Indenture Trustee and shall duly assign, transfer and deliver to
such successor trustee all property and cash held by such retiring Indenture
Trustee hereunder.
(b) In case of the appointment hereunder of a successor
trustee, the Company, the retiring Indenture Trustee and each successor trustee
with respect to the Debentures shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept
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such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor trustee all the rights, powers, trusts and duties of the retiring
Indenture Trustee, and (2) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the Trust hereunder by more than one Indenture Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or removal
of the retiring Indenture Trustee shall become effective to the extent provided
therein, such retiring Indenture Trustee shall have no further responsibility
for the exercise of rights and powers or for the performance of the duties and
obligations vested in the Indenture Trustee under this Indenture, and each such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Debentures; but, on request of the Company or any
successor trustee, such retiring Indenture Trustee shall duly assign, transfer
and deliver to such successor trustee, to the extent contemplated by such
supplemental indenture, the property and cash held by such retiring Indenture
Trustee hereunder with respect to the Debentures.
(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor trustee all such rights, powers, trusts and
duties referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the Holders, as
their names and addresses appear upon the Debenture Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
SECTION 7.12. Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Indenture Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided that such corporation shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures shall have been authenticated, but not
delivered, by the Indenture Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Indenture Trustee may adopt
such authentication and deliver the Debentures so authenticated with the same
effect as if such successor Indenture Trustee had itself authenticated such
Debentures.
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SECTION 7.13. Preferential Collection of Claims Against the
Company.
The Indenture Trustee shall comply with Section 311(a) of the
Trust Indenture Act, excluding any creditor relationship described in Section
311(b) of the Trust Indenture Act. A Indenture Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.
ARTICLE VIII
CONCERNING THE HOLDERS
SECTION 8.01. Evidence of Action by Holders.
(a) Whenever in this Indenture it is provided that the Holders
(or holders of Preferred Securities, if applicable) of a majority or specified
percentage in aggregate principal amount of the Debentures (or Preferred
Securities, if applicable) may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking of
any other action), the fact that at the time of taking any such action the
Holders (or holders of Preferred Securities, if applicable) of such majority or
specified percentage of such Debentures (or Preferred Securities, if applicable)
have joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such Holders (or holders of Preferred
Securities, if applicable) of the Debentures (or Preferred Securities, if
applicable) in Person or by agent or proxy appointed in writing.
(b) If the Company shall solicit from the Holders of
Debentures any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as evidenced by an
Officer's Certificate, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other action, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or after
the record date, but only the Holders of record at the close of business on the
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of Debentures Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Debentures Outstanding shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such Holders on the
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months after the record
date.
(c) Notwithstanding anything to the contrary contained herein,
the following Persons are hereby irrevocably authorized and empowered (in their
own names or otherwise) to take any actions required or allowed hereunder to be
taken with respect to the Debentures, including, without limitation, at any time
that an Event of Default has occurred and is continuing:
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(i) if the Indenture Trustee fails to promptly act as
directed in accordance with Section 7.01(c)(i), the Property
Trustee of the Trust, as initial Holder of the Debentures,
upon direction by the holders of at least 25% of the Preferred
Securities Outstanding (or such greater number as may be
specified in the Declaration); and
(ii) if the Property Trustee fails to promptly act as
directed in accordance with the foregoing clause, by the
holders of at least 25% of the Preferred Securities
Outstanding (or such greater number as may be specified in the
Declaration).
SECTION 8.02. Proof of Execution by Holders.
Subject to the provisions of Section 7.01, proof of the
execution of any instrument by a Holder (such proof will not require
notarization) or his agent or proxy and proof of the holding by any Person of
any of the Debentures shall be sufficient if made in the following manner:
(A) The fact and date of the execution by
any such Person of any instrument may be proved in
any reasonable manner acceptable to the Indenture
Trustee.
(B) The ownership of Debentures shall be
proved by the Debenture Register or by a certificate
of the Debenture Registrar.
(C) The Indenture Trustee may require such
additional proof of any matter referred to in this
Section as it shall deem necessary.
SECTION 8.03. Who May be Deemed Owners.
Prior to the due presentment for registration of transfer of
any Debenture, the Company, the Indenture Trustee, any Paying Agent and any
Debenture Registrar may deem and treat the Person in whose name the Debentures
shall be registered upon the books of the Company as the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notice of ownership or writing thereon made by anyone other than the
Debenture Registrar) for the purpose of receiving payment of or on account of
the principal of and (subject to Section 2.04) interest on, such Debenture and
for all other purposes; and neither the Company nor the Indenture Trustee nor
any Paying Agent nor any Debenture Registrar shall be affected by any notice to
the contrary.
SECTION 8.04. Certain Securities Owned by Company Disregarded.
In determining whether the Holders of the requisite aggregate
principal amount of the Debentures (or holders of the requisite amount of
Preferred Securities, if applicable) have concurred in any direction, consent or
waiver under this Indenture, the Debentures (or Preferred Securities, if
applicable) that are owned by the Company or by any Affiliate thereof shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except
54
that for the purpose of determining whether the Indenture Trustee shall be
protected in relying on any such direction, consent or waiver, only the
Debentures (or Preferred Securities, if applicable) that a Responsible Officer
of the Indenture Trustee actually knows are so owned shall be so disregarded.
The Debentures (or Preferred Securities, if applicable) so owned that have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section, if the pledgee shall establish to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Debentures (or
Preferred Securities, if applicable) and that the pledgee is not an Affiliate of
the Company. In case of a dispute as to such right, any decision by the
Indenture Trustee taken upon the advice of counsel shall be full protection to
the Indenture Trustee. For purposes of this Section 8.04, Debentures held by the
Trust shall be deemed to be held by Holders of Securities.
SECTION 8.05. Actions Binding on Future Holders.
At any time prior to (but not after) the evidencing to the
Indenture Trustee, as provided in Section 8.01, of the taking of any action by
the Holders of the majority or percentage in aggregate principal amount of the
Debentures, any Holder of Debentures that is shown by the evidence to be
included in the Debentures the Holders of which have consented to such action
may, by filing written notice with the Indenture Trustee, and upon proof of
holding as provided in Section 8.02, revoke such action so far as concerns such
Debenture. Except as aforesaid any such action taken by the registered Holder of
any Debenture shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Debenture, and of any Debenture issued in
exchange therefor, on registration of transfer thereof or in place thereof,
irrespective of whether any notation in regard thereto is made upon such
Debenture. Any action taken by the Holders of the majority or percentage in
aggregate principal amount of the Debentures shall be conclusively binding upon
the Company, the Indenture Trustee and the Holders of all the Debentures.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without the Consent of
the Holders.
In addition to any supplemental indenture otherwise authorized
by this Indenture, the Company and the Indenture Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as then in effect),
without the consent of the Holders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein, or
in the Debentures in either case which does not adversely affect the rights of
any Holder;
(b) to comply with Article X;
(c) to comply with any requirement of the Commission in
connection with qualifying, or maintaining the qualification of this Indenture
under the Trust Indenture Act;
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(d) to provide for uncertificated Debentures in addition to
or, in place of, certificated Debentures; and
(e) to add to the covenants of the Company for the benefit of
the Holders of the Debentures or to surrender any right or power herein
conferred upon the Company.
The Indenture Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Indenture Trustee shall not be obligated to enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Indenture Trustee without
the consent of the Holders of the Debentures at the time Outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. Supplemental Indentures With Consent of the
Holders.
With the consent (evidenced as provided in Section 8.01) of
the Holders of not less than a majority in aggregate principal amount of the
Debentures affected by such supplemental indenture or indentures at the time
Outstanding, the Company, when authorized by Board Resolutions, and the
Indenture Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 9.01 the rights of the Holders of the Debentures under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holders of each Debenture then Outstanding and affected
thereby, (i) extend the fixed maturity of the Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any interest payable upon redemption thereof or (ii)
reduce the aforesaid percentage of Debentures, the Holders of which are required
to consent to any such supplemental indenture.
The consent of the Holders of the Debentures affected under
this Section shall be required to approve the particular form and the substance
of any proposed supplemental indenture.
SECTION 9.03. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture pursuant to
the provisions of this Article or of Section 10.01, this Indenture shall be and
be deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Indenture Trustee, the Company and the Holders of Debentures
affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all
the terms and conditions of any such supplemental indenture shall be and be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
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SECTION 9.04. Debentures Affected by Supplemental Indentures.
Debentures affected by a supplemental indenture, authenticated
and delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, may bear a notation in form
approved by the Company, as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debentures so modified as to
conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Indenture Trustee and delivered
in exchange for the Debentures then Outstanding.
SECTION 9.05. Execution of Supplemental Indentures.
Upon the request of the Company, accompanied by Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Indenture Trustee of evidence of the consent of Holders
required to consent thereto as aforesaid, the Indenture Trustee shall join with
the Company in the execution of such supplemental indenture unless such
supplemental indenture affects the Indenture Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Indenture
Trustee may in its discretion but shall not be obligated to enter into such
supplemental indenture. The Indenture Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article is authorized or
permitted by, and conforms to, the terms of this Article and that it is proper
for the Indenture Trustee under the provisions of this Article to join in the
execution thereof; provided, however, that, except as may be required by the
Trust Indenture Act, such Opinion of Counsel need not be provided in connection
with the execution of a supplemental indenture that establishes the terms of the
Debentures.
Promptly after the execution by the Company and the Indenture
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Company, or at the request of the Company, the Indenture Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the Holders of
Debentures affected thereby as their names and addresses appear upon the
Debenture Register. Any failure of the Company or the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.
SECTION 9.06. Consents.
Any consent made pursuant to this Article IX by a Holder of
Debentures that has transferred or has agreed to transfer its Debentures to the
Company, any Subsidiary or any Affiliate of the Company and has provided or has
agreed to provide such written consent as a condition to such transfer shall be
void and of no force or effect except solely as to such Holder, and any
amendments effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such consent (and
the consents of all other
57
holders of Debentures that were acquired under the same or similar conditions)
shall be void and of no force or effect except solely as to such Holder.
ARTICLE X
SUCCESSOR CORPORATION
SECTION 10.01. Company May Consolidate, Etc.
The Company shall not consolidate, amalgamate, merge with or
into, or be replaced by any other Person (whether or not affiliated with the
Company), and shall not convey, transfer, lease or otherwise dispose of its
properties and assets as an entirety, or substantially as an entirety, to any
Person (whether or not affiliated with the Company) unless:
(a) in the event the Company consolidates, amalgamates or
merges with or into another Person (whether or not affiliated with the Company)
or conveys, transfers, leases or otherwise disposes of its properties and assets
as an entirety, or substantially as an entirety to any Person (whether or not
affiliated with the Company) (i) the successor Person is a corporation organized
under the laws of the United States or any state thereof or the District of
Columbia, and such successor corporation expressly assumes the Company's
obligations under this Indenture, the Declaration, the Debentures, the
Contingent Appreciation Certificates and the Preferred Securities Guarantee, or
(ii) in the event of a conveyance, transfer, lease or other disposition of the
Company's properties and assets as an entirety or substantially as an entirety
to any Person, such Person is or becomes a Subsidiary of the Company and fully
and unconditionally guarantees the obligations of the Company under the
Debentures and the Contingent Appreciation Certificates;
(b) immediately after giving effect thereto, no Event of
Default under this Indenture, and no event which, after notice or lapse of time
or both, would become an Event of Default under the Indenture, shall have
occurred and be continuing;
(c) in the case of the Debentures, any such transaction is
permitted under the Declaration and the Preferred Securities Guarantee and does
not give rise to any breach or violation of the Declaration or Preferred
Securities Guarantee; and
(d) the Company has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, continuance, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with, and the Indenture Trustee, subject to Section 7.01, may rely upon such
Officer's Certificate and Opinion of Counsel as conclusive evidence that such
transaction complies with this Section 10.01.
SECTION 10.02. Successor Corporation Substituted.
(a) In case of any such consolidation, amalgamation, merger,
sale, conveyance, transfer, lease or other disposition in accordance with
Section 10.01 (other than in
58
accordance with Section 10.01(a)(ii)) and upon the assumption by the successor
corporation, by supplemental indenture executed and delivered to the Indenture
Trustee and satisfactory in form to the Indenture Trustee, of, (i) the due and
punctual payment of the principal of and interest on, all of the Debentures
Outstanding,(ii) the performance of all obligations under the Preferred
Securities Guarantees, and (iii) the due and punctual performance of all of the
covenants and conditions of this Indenture or be performed by the Company, such
successor corporation shall succeed to and be substituted for the Company with
the same effect as if it had been named as the Company herein, and thereupon the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Debentures.
(b) In case of any such consolidation, amalgamation, merger,
sale, conveyance, transfer, lease or other disposition such changes in
phraseology and form (but not in substance) may be made in the Debentures
thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Debentures shall prevent the Company from merging into itself or acquiring by
purchase or otherwise all or any part of the property of any other corporation
(whether or not affiliated with the Company).
SECTION 10.03. Evidence of Consolidation, Etc. to Indenture
Trustee.
The Indenture Trustee, subject to the provisions of Section
7.01, may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, amalgamation, merger, sale, conveyance, transfer, lease or other
disposition, and any such assumption, comply with the provisions of this
Article.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
If at any time: (a) the Company shall have delivered to the
Indenture Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that shall have been destroyed, lost or stolen and
that shall have been replaced or paid as provided in Section 2.07) and
Debentures for whose payment cash or Governmental Obligations have theretofore
been deposited in trust or segregated and held in trust by the Company (and
thereupon repaid to the Company or discharged from such trust, as provided in
Section 10.05); or (b) all such Debentures theretofore delivered to the
Indenture Trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption, and the Company shall deposit or
cause to be deposited with the Indenture Trustee as trust funds the entire
amount in cash or Governmental Obligations sufficient or a combination thereof,
sufficient in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Indenture Trustee, to pay at maturity or upon redemption all Debentures not
theretofore delivered to the Indenture Trustee for cancellation, including
principal and interest due or to become due to such date of
59
maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder with respect
to such Debentures by the Company; then this Indenture shall thereupon cease to
be of further effect with respect to such Debentures except for the provisions
of Sections 2.04, 2.06, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive
until the date of maturity or redemption date, as the case may be, and Sections
7.06 and 11.05, that shall survive to such date and thereafter, and the
Indenture Trustee, on demand of the Company and at the Company's cost and
expense, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.
SECTION 11.02. Discharge of Obligations.
If at any time all such Debentures not heretofore delivered to
the Indenture Trustee for cancellation or that have not become due and payable
as described in Section 11.01 shall have been paid by the Company by depositing
irrevocably with the Indenture Trustee, as trust funds, cash or an amount of
Governmental Obligations sufficient to pay at maturity or upon redemption all
Debentures not theretofore delivered to the Indenture Trustee for cancellation,
including principal and interest due or to become due to such date of maturity
or date fixed for redemption, as the case may be, and if the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
after the date such cash or Governmental Obligations, as the case may be, are
deposited with the Indenture Trustee the obligations of the Company under this
Indenture shall cease to be of further effect except for the provisions of
Sections 2.04, 2.06, 2.07, 4,01, 4.02, 4,03, 7.06, 7.10 and 11.05 hereof that
shall survive until such Debentures shall mature and be paid. Thereafter,
Sections 7.06 and 11.05 shall survive.
SECTION 11.03. Deposited Amounts to be Held in Trust.
All cash or Governmental Obligations deposited with the
Indenture Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and
shall be available for payment as due, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent), to the Holders of
the Debentures for the payment or redemption of which such cash or Governmental
Obligations have been deposited with the Indenture Trustee.
SECTION 11.04. Payment of Amounts Held by Paying Agents.
In connection with the satisfaction and discharge of this
Indenture all cash or Governmental Obligations then held by any Paying Agent
under the provisions of this Indenture shall, upon demand of the Company, be
paid to the Indenture Trustee and thereupon such Paying Agent shall be released
from all further liability with respect to such cash or Governmental
Obligations.
SECTION 11.05. Repayment to the Company.
Any cash or Governmental Obligations deposited with any Paying
Agent or the Indenture Trustee, or then held by the Company in trust for payment
of principal of or interest on, the Debentures that are not applied but remain
unclaimed by the Holders of such Debentures for at least two years after the
date upon which the principal of or interest on, such Debentures shall have
respectively become due and payable, shall be repaid to the Company, on May 31
of
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each year or (if then held by the Company) shall be discharged from such trust;
and thereupon the Paying Agent and the Indenture Trustee shall be released from
all further liability with respect to such cash or Governmental Obligations, and
the Holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof.
SECTION 11.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any amounts
or Government Obligations in accordance with Sections 11.01 or 11.02 by reason
of any legal proceeding or by reason of any order or judgment or any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Debentures
shall be revived and reinstated as through no deposit had occurred pursuant to
Sections 11.01 or 11.02, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such cash or Government Obligations in
accordance with Sections 11.01 or 11.02, provided that, if the Company has made
any payment or principal of or interest on the Debentures because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Debentures to receive such payment from the cash or
Government Obligations held by the Trustee or Paying Agent, only after payment
in full of the obligations under the Contingent Appreciation Certificate
Agreement and Preferred Securities Guarantee.
ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS
SECTION 12.01. No Recourse.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Debenture or the Preferred Securities
Guarantee, or for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, stockholder, officer or director, past, present
or future, as such, of the Company or of any predecessor or successor
corporation, either directly or through the Company or any such predecessor or
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or
61
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issuance of
such Debentures.
ARTICLE XIII
SUBORDINATION
SECTION 13.01. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of
Debentures issued hereunder by such Xxxxxx' s acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article XIII; and each Holder of a Debenture, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions.
The payment by the Company and all amounts required hereunder,
including fees (other than fees subject to Sections 14.01(a), (b) and (c)) and
expenses and the principal of and interest on, all Debentures issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the Issue Date or thereafter
incurred.
No provision of this Article XIII shall prevent the occurrence
of any Default or Event of Default hereunder, nor the rights of the Indenture
Trustee or any Holder to exercise such rights and remedies afforded to each of
them under this Indenture with respect to any provision of this Indenture other
than payment of principal and interest on the Debentures.
SECTION 13.02. Default on Senior Indebtedness.
In the event that (a) any payment of principal, interest or
any other payment due on any Senior Indebtedness is not paid by the Company when
due, any applicable grace period with respect to any such payment default has
ended and such default has not been cured, waived or ceased to exist, (b) any
other default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Indenture Trustee receives notice of such
default (a "Payment Blockage Notice") from the Company or any other Person
permitted to give such notice (including without limitation, any representative
of any holder of Senior Indebtedness); or (c) in the event that the maturity of
any Senior Indebtedness of the Company has been accelerated because of a
default, then, in any such case, no payment shall be made by the Company with
respect to the principal (including redemption) of or interest on, the
Debentures. Payments on the Debentures shall be resumed: (1) in the case of a
payment default on any Senior Indebtedness, upon the date on which such default
is cured or waived; and (2) in case of a nonpayment default, the earlier of the
date on which that default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received; provided, however,
that payments on the Debentures shall not resume if the maturity of any Senior
Indebtedness has been accelerated. A new Payment Blockage Notice may be
delivered if 180 days have elapsed since the delivery of the immediately prior
Payment Blockage Notice so long as such Payment
62
Blockage Notice relates to a default under Senior Indebtedness that has not been
the subject of any prior Payment Blockage Notice.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Indenture Trustee or any Holder when such payment is
prohibited by the preceding paragraph of this Section 13.02, such payment shall
be deemed to be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Indenture Trustee and the Company in a written notice within 90 days of the
date on which such payments are disbursed by the Indenture Trustee of the
amounts then outstanding under the Senior Indebtedness, plus accrued interest
thereon, and only the amounts specified in such notice to the Indenture Trustee
and the Company shall be paid to the holders of Senior Indebtedness.
SECTION 13.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due on all
Senior Indebtedness of the Company, shall first be paid in full, or payment
thereof provided for in cash in accordance with its terms, before any payment is
made by the Company, on account of the principal or interest on, the Debentures;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, which the Holders of the
Debentures or the Indenture Trustee would be entitled to receive from the
Company, except for the provisions of this Article XIII, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Holders of the
Debentures or by the Indenture Trustee under this Indenture if received by them
or it, directly to the holders of Senior Indebtedness of the Company (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full in cash, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any such payment or distribution is made to or retained by the Holders of
Debentures or the Indenture Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Indenture Trustee or the Holders of the Debentures before all Senior
Indebtedness of the Company is paid in full, or provision is made for such
payment in cash in accordance with its terms, such payment or distribution shall
be held
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in trust for the benefit of and shall be paid over or delivered to the holders
such Senior Indebtedness or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in cash in accordance
with its terms, after giving effect to any concurrent payment or distribution to
or for the holders of such Senior Indebtedness.
For purposes of this Article XIII, the words "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XIII with
respect to the Debentures to the payment of all Senior Indebtedness of the
Company, that may at the time be outstanding, provided that (i) such Senior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation, amalgamation or merger
of the Company with or into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer, lease or other
disposition of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article X of
this Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 13.03 if such other corporation
shall, as a part of such consolidation, amalgamation, merger, conveyance,
transfer, lease or other disposition, comply with the conditions stated in
Article X of this Indenture. Nothing in Sections 13.01, 13.02 or in this Section
13.03 shall apply to claims of, or payments to, the Indenture Trustee under or
pursuant to Section 7.06 hereof.
SECTION 13.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness of
the Company, the rights of the Holders of the Debentures shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, applicable to such
Senior Indebtedness until the principal of and interest on, the Debentures shall
be paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders for such Senior Indebtedness of any cash, property
or securities to which the Holders of the Debentures or the Indenture Trustee
would be entitled except for the provisions of this Article XIII, and no payment
over pursuant to the provisions of this Article XIII, to or for the benefit of
the holders of such Senior Indebtedness by Holders of the Debentures or the
Indenture Trustee, shall, as between the Company, its creditors other than
holders of Senior Indebtedness of the Company, and the Holders of the
Debentures, be deemed to be a payment by the Company, to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XIII
are and are intended solely for the purposes of defining the relative rights of
the Holders of the Debentures, on the one hand, and the holders of such Senior
Indebtedness on the other hand.
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Nothing contained in this Article XIII or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company and the Holders of the Debentures, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Debentures the
principal of and interest on, the Debentures as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Debentures and creditors of the
Company, other than the holders of Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Indenture Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article XIII of the holders of such Senior Indebtedness in respect of cash,
property or securities of the Company, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XIII, the Indenture Trustee, subject to the
provisions of Section 7.01, and the Holders of the Debentures, shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction in
which such dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidation trustee, agent or other Person making such payment or distribution,
delivered to the Indenture Trustee or to the Holders of the Debentures, for the
purposes of ascertaining the Persons entitled to participate in such
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
XIII.
SECTION 13.05. Indenture Trustee to Effectuate Subordination.
Each Holder of Debentures by such Xxxxxx's acceptance thereof
authorizes and directs the Indenture Trustee on such Xxxxxx's behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article XIII and appoints the Indenture Trustee such Holder's
attorney-in-fact for any and all such purposes.
SECTION 13.06. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Indenture Trustee, with a copy to the Administrative Agent, of
any fact known to the Company that would prohibit the making of any payment of
monies to or by the Indenture Trustee in respect of the Debentures pursuant to
the provisions of this Article XIII. The Company shall deliver to the
Administrative Agent a copy of any notice delivered by the Company pursuant to
this Indenture. Notwithstanding the provisions of this Article XIII or any other
provision of this Indenture, the Indenture Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of monies to or by the Indenture Trustee in respect of the Debentures
pursuant to the provisions of this Article XIII, unless and until a Responsible
Officer of the Indenture Trustee shall have received written notice thereof at
the Corporate Trust Office of the Indenture Trustee from the Company or a holder
or holders of Senior Indebtedness or from any trustee therefor; and before the
receipt of any such written notice, the Indenture Trustee, subject to the
provisions of Section 7.01, shall be entitled in all
65
respects to assume that no such facts exist; provided, however, that if the
Indenture Trustee shall not have received the notice provided for in this
Section 13.06 at least two Business Days prior to the date upon which by the
terms hereof any cash may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on, any Debenture),
then, anything herein contained to the contrary notwithstanding, the Indenture
Trustee shall have full power and authority to receive such cash and to apply
the same to the purposes for which they were received, and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.
The Indenture Trustee, subject to the provisions of Section
7.01, shall be entitled to rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the Company
(or a trustee on behalf of such holder) to establish that such notice has been
given by a holder of such Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Indenture Trustee determines in good
faith that further evidence is required with respect to the right of any Person
as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XIII, the Indenture Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Indenture
Trustee as to the amount of such Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article XIII, and if such evidence is not furnished, the Indenture Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
SECTION 13.07. Rights of the Indenture Trustee; Holders of
Senior Indebtedness.
The Indenture Trustee in its individual capacity shall be
entitled to all the rights set forth in this Article XIII, in respect of any
Senior Indebtedness at any time held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the
Indenture Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Indenture Trustee undertakes to perform or to observe only such of
its covenants and obligations as are specifically set forth in this Article
XIII, and no implied covenants or obligations with respect to the holders of
such Senior Indebtedness shall be read into this Indenture against the Indenture
Trustee. The Indenture Trustee shall not be deemed to owe any fiduciary duty to
the holders of such Senior Indebtedness and, subject to the provisions of
Section 7.01 of this Indenture, the Indenture Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to Holders of
the Debentures, the Company or any other Person cash or assets to which any
holder of such Senior Indebtedness shall be entitled by virtue of this Article
XIII or otherwise.
SECTION 13.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced
66
or impaired by any act or failure to act on the part of the Company, or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company, with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have or
otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Indenture Trustee
or the Holders of the Debentures, without incurring responsibility to the
Holders of the Debentures and without impairing or releasing the subordination
provided in this Article XIII or the obligations hereunder of the Holders of the
Debentures to the holders of such Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend
or supplement in any manner such Senior Indebtedness or any instrument
evidencing the same or any agreement under which such Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing such Senior Indebtedness; (iii) release
any Person liable in any manner for the collection of such Senior Indebtedness;
and (iv) exercise or refrain from exercising any rights against the Company and
any other Person.
ARTICLE XIV
EXPENSES
SECTION 14.01. Payment of Expenses.
In connection with the offering, sale and issuance,
modifications and revisions of the Debentures initiated by the Company, the
Company shall:
(a) pay for all costs and expenses relating to the offering,
sale and issuance, modifications and revisions of the Debentures and
compensation of the Indenture Trustee under the Indenture in accordance with the
provisions of Section 7.06 of this Indenture;
(b) pay for all costs and expenses of the Trust, including,
but not limited to, costs and expenses relating to the organization of the
Trust, the offering, sale and issuance of the Trust Securities, the fees and
expenses of the Property Trustee, the Delaware Trustee (as defined in the
Declaration), including such compensation for all services rendered by the
Trustees under the Declaration as may be mutually agreed upon in writing by the
Company and such Trustees as the case may be, and except as otherwise expressly
provided herein, to reimburse any Trustee upon its request for all reasonable
expenses (including counsel fees and expenses), disbursements and advances
incurred or made by such Trustees in accordance with the provisions of the
Declaration, except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith), the costs and expenses relating to
the operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, governmental
filings, expenses for printing and engraving and computing or accounting
equipment, paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and expenses
incurred in connection
67
with the acquisition, financing, and disposition of assets of the Trust; and,
further, each of the Property Trustee and Delaware Trustee shall have the right
to enforce this Section 14.01(b) with respect to its fees and expenses;
(c) pay all reasonable costs and expenses of legal counsel for
all holders of Preferred Securities, which costs and expenses such holders may
incur in connection with the enforcement of any of the rights or interests of
such holders hereunder or any workout, restructuring or similar transaction
involving the Company, provided that, notwithstanding the foregoing, the Company
shall be obligated to pay the reasonable costs and expenses of only one legal
counsel (together with any requisite local counsel); and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) of the Trust and all
liabilities, costs and expenses with respect to such taxes of the Trust.
ARTICLE XV
FORM OF DEBENTURE
The Debentures and the Indenture Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the following
form.
(FORM OF FACE OF DEBENTURE)
No. $
------------- --------------
Crown Media Holdings, Inc.
6.75% SUBORDINATED DEBENTURE DUE 2007
EACH HOLDER OF THE DEBENTURES, BY ITS ACCEPTANCE HEREOF, WILL BE DEEMED TO HAVE
ACKNOWLEDGED, REPRESENTED TO AND AGREED WITH THE COMPANY AND THE TRUST THAT SUCH
HOLDER UNDERSTANDS AND ACKNOWLEDGES THAT (1) THE DEBENTURES AND UNDERLYING
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY OTHER
APPLICABLE SECURITIES LAWS AND ARE NOT FREELY TRANSFERABLE WITHOUT REGISTRATION
UNDER OR AN EXEMPTION FROM THE SECURITIES ACT, (2) THE DEBENTURES ARE BEING
PURCHASED FOR THE ACCOUNT OF THE HOLDER WITHOUT A VIEW TO DISTRIBUTE, OR FOR
OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION OF, THE DEBENTURES IN
VIOLATION OF THE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITIES LAWS AND (3)
IN THE ABSENCE OF REGISTRATION, THE DEBENTURES CAN ONLY BE TRANSFERRED PURSUANT
TO AN EXEMPTION UNDER THE SECURITIES ACT AND UPON DELIVERY OF SUCH
CERTIFICATIONS AND AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
68
THE COMPANY TO SUCH EFFECT AND IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS AND THAT SUCH HOLDER WILL NOTIFY THE TRANSFEREE OF SUCH RESALE
RESTRICTIONS.
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO UNITED STATES TREASURY
REGULATION SECTION 1.1275-3(b). THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL
ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE HOLDER OF THIS
DEBENTURE MAY OBTAIN THE INFORMATION DESCRIBED IN UNITED STATES TREASURY
REGULATION SECTION 1.1275-3(b)(1)(i) FROM THE COMPANY, AT THE FOLLOWING ADDRESS:
c/o CROWN MEDIA HOLDINGS, INC., 0000 XXXXX XXXXXXXX XXXXX XXXXXX, XXXXX 000,
XXXXXXXXX XXXXXXX, XX. 00000, ATTENTION: VICE PRESIDENT OF FINANCE
ADMINISTRATION.
CROWN MEDIA HOLDINGS, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to JPMorgan
Chase Bank, as property trustee of Crown Media Trust (the "Trust"), or
registered assigns, the principal sum of ____________________ Dollars on
December 15, 2007 and to pay interest on said principal sum from December 17,
2001 or from the most recent interest payment date to which interest has been
paid or duly provided for, quarterly in arrears on March 15, June 15, September
15 and December 15 of each year (each, an "Interest Payment Date"), commencing
March 15, 2002, at the rate of 6.75% per annum (the "Coupon Rate") until the
principal hereof shall have become due and payable, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum. Interest payments not paid when due shall accrue interest
at the Coupon Rate on the amount of accrued and unpaid interest (to the extent
permitted by law). So long as an Event of Default shall have occurred and be
continuing (after, as well as before, a judgment), the Company shall on each
such date on which Defaulted Interest is payable, pay interest, to the extent
permitted by applicable law, on any then unpaid amount of the Debentures
Outstanding at a rate equal to 8.75%, representing 2% per annum in excess of the
Coupon Rate.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Indenture Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
69
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed.
Dated: December 17, 2001
CROWN MEDIA HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
70
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the
within-mentioned Indenture.
JPMorgan Chase Bank, as Indenture Trustee
By:
-------------------------------------
Authorized Officer
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of
Debentures of the Company (the "Debentures"), issued under and pursuant to an
indenture (the "Indenture") dated as of December 17, 2001 among the Company, and
JPMorgan Chase Bank, a
New York banking corporation, as Indenture Trustee (the
"Indenture Trustee"), to which Indenture thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Indenture Trustee, the Company and the Holders of
the Debentures. By the terms of the Indenture, the Debentures are limited in
aggregate principal amount as specified in said Indenture.
The amount of interest payable for any period shall be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
shall be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on this Debenture
is not a Business Day, then payment of interest payable on such date shall be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest installment so payable, and
punctually paid or duly provided for, for any period, will, as provided in the
Indenture, be paid to the Person in whose name this Debenture is registered, at
the close of business on the Regular Record Date for such interest installment.
Notwithstanding the foregoing, any Defaulted Interest shall be payable only to
the Person in whose name this Debenture is registered at the close of business
on a special record date to be fixed by the Indenture Trustee in accordance with
the provisions of the Indenture, for the payment of such Defaulted Interest,
notice whereof shall be given to the registered Holders of this Debenture not
less than 10 days prior to such special record date. The principal of and the
interest on, this Debenture shall be payable in the coin or currency of the
71
United States of America which at the time of payment is legal tender for
payment of public and private debt, at the office or agency of the Indenture
Trustee maintained for that purpose in the Borough of Manhattan, the City and
State of New York; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the registered Holder at such
address as shall appear in the Debenture Register. Notwithstanding the
foregoing, so long as the Holder of this Debenture is the Property Trustee, the
payment of the principal of and interest on, this Debenture shall be made at
such place and to such account as may be designated in writing at least 10
Business Days prior to the applicable Regular Record Date by the Property
Trustee.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding on the
Issue Date or thereafter incurred, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Indenture Trustee on his or her behalf to take such
action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided, and (c) appoints the Indenture Trustee as his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such Holder upon said provisions.
At any time on or after December 15, 2003, the Company shall
have the right to redeem (the "Optional Redemption") any and all of the
Debentures Outstanding, in whole but not in part at a redemption price equal to
100% of the aggregate principal amount of the Debentures Outstanding, together
with any accrued and unpaid interest thereon to the date of redemption.
At any time on or after the Issue Date and prior to December
15, 2003, in the event of a Special Event, the Company shall have the right to
redeem (the "Special Event Redemption") any and all of the Debentures
Outstanding, in whole but not in part at a redemption price equal to 100% of the
aggregate principal amount of the Debentures, together with any accrued and
unpaid interest thereon to the date of redemption.
In the event of a Change of Control, the Company shall have
the right to redeem any and all of the Debentures Outstanding at a redemption
price per Debenture, depending on the period in which the Change of Control
occurs, equal to the following percentages per $1,000 aggregate principal amount
of Debentures Outstanding, together with any accrued and unpaid interest to the
date of redemption (a "Change of Control Redemption"):
December 15, 2001 to December 14, 2002 110.0%
December 15, 2002 to December 14, 2003 110.0%
December 15, 2003 and thereafter 100.0%
72
In the event that the Company declines to exercise a Change of
Control Redemption with respect to all Debentures within five (5) days of a
Change of Control, the Company shall be required to offer to purchase any and
all of the Debentures Outstanding at a price equal to the redemption price that
would have been payable upon a Change of Control Redemption specified in the
immediately preceding paragraph (a "Change of Control Offer"). In connection
with any such Change of Control Offer, the Company covenants and agrees that it
shall purchase any and all Debentures that are validly tendered by Holders
thereof.
Any redemption shall be made upon not less than 30 days nor
more than 60 days notice before the date fixed for redemption at the redemption
price.
In case an Event of Default, shall have occurred and be
continuing, the principal of, and any accrued and unpaid interest, on, all of
the Debentures may be declared, and upon such declaration shall become,
immediately due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture. Upon any Debentures becoming due and
payable under Section 6.01 of the Indenture, whether automatically or by
declaration, such Debentures will forthwith mature and the entire unpaid
principal amount of such Debentures plus all accrued and unpaid interest thereon
(to the full extent permitted by applicable law), shall be immediately due and
payable, in each and every case without presentment, demand, protest or further
notice.
The Debentures are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid in full before the Debentures may be paid. The Company
agrees, and each Holder by accepting a Debenture agrees, to the subordination
provisions contained in the Indenture and authorizes the Indenture Trustee to
give it effect and appoints the Indenture Trustee as attorney-in-fact for such
purpose.
The Indenture imposes certain limitations on the ability of
the Company and its Restricted Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its Capital Stock or
certain Indebtedness and enter into transactions with Affiliates. Such
limitations are subject to a number of important qualifications and exceptions.
The Company must annually report to the Indenture Trustee on compliance with
such limitations.
The Indenture contains provisions permitting the Company and
the Indenture Trustee, with the consent of the Holders of not less than a
majority in aggregate principal amount of the Debentures affected by such
supplemental indenture or indentures at the time Outstanding, to enter into
supplemental indentures for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner not covered by Section 9.01
of the Indenture the rights of the Holders of the Debentures; provided, however,
that no such supplemental indenture shall, without the consent of the Holders of
each Debenture Outstanding and affected thereby, (i) extend the fixed maturity
of any Debenture, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any interest payable
upon the redemption thereof, or (ii) reduce the aforesaid percentage of
Debentures, the Holders of which are required to consent to any such
supplemental indenture. The Indenture also contains
73
provisions permitting the Holders of a majority in aggregate principal amount of
the Debentures at the time Outstanding affected thereby, determined in
accordance with Section 8.04 of the Indenture, on behalf of the Holders of all
of the Debentures, to waive any past Default in the performance of any of the
covenants contained in the Indenture, and its consequences, except that a waiver
of a Default in the payment of the principal of or interest on this Debenture
shall require the consent of each affected Holder. Any such consent or waiver by
the registered Holder of the Debenture (unless revoked as provided in this
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Debenture and of any Debenture issued in exchange
herefor on registration of transfer thereof or in place hereof, irrespective of
whether any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on, this Debenture at the time and place and at the rate and in the
cash herein prescribed.
As provided in this Indenture and subject to certain
limitations therein set forth, the transfer of this Debenture is registrable by
the registered Holder hereof on the Debenture Register of the Company, upon
surrender of this Debenture for registration of transfer at the office or agency
of the Company in the Borough of Manhattan, The City and State of New York
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Debenture Registrar duly executed by the
registered Holder hereof or by such Xxxxxx's attorney duly authorized in
writing, and thereupon one or more new Debentures for a like aggregate principal
amount and other applicable terms and conditions will be issued to the
designated transferee or transferees. No service charge will be made for any
such registration of transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to the due presentment for registration of transfer of
this Debenture, the Company, the Indenture Trustee, any Paying Agent and any
Debenture Registrar may deem and treat the registered Holder hereof as the
absolute owner hereof (whether or not this Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal hereof and interest due hereon and for all other
purposes, and neither the Company nor the Indenture Trustee nor any Paying Agent
nor any Debenture Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of
or the interest on, this Debenture, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, either
directly or through the Company of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
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All capitalized terms used in this Debenture and not otherwise
defined herein shall have the meanings assigned thereto in the Indenture.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.01. Effect on Successors and Assigns.
All the covenants, stipulations, promises and agreements in
this Indenture contained by or on behalf of the Company shall bind its
respective successors and assigns, whether so expressed or not.
SECTION 16.02. Actions by Successor.
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company.
SECTION 16.03. Surrender of Company Powers.
The Company, by instrument in writing executed by authority of
2/3 (two-thirds) of its Board of Directors and delivered to the Indenture
Trustee, may surrender any of the powers reserved to the Company and thereupon
such power so surrendered shall terminate both as to the Company and as to any
successor corporation.
SECTION 16.04. Notices.
Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Indenture Trustee or by the Holders of Debentures, the
Property Trustee or the holders of the Preferred Securities to or on the Company
may be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Indenture Trustee), as follows: Crown Media Holdings, Inc.
0000 X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
Attention: Chief Financial Officer. Any notice, election, request or demand by
the Company or any Holder to or upon the Indenture Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the Corporate Trust Office of the Indenture Trustee.
SECTION 16.05. Governing Law.
This Indenture and the Debentures shall be governed by and
construed in accordance with the laws of the State of New York, except to the
extent that the Trust Indenture Act shall be applicable.
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SECTION 16.06. Treatment of Debentures as Debt; Preservation
of Grantor Trust Status.
It is intended that the Debentures will be treated as
indebtedness and not as equity for federal income tax purposes. The provisions
of this Indenture shall be interpreted to further this intention.
Notwithstanding any other provision, neither this Indenture nor the Debentures
shall require or permit any action to be taken or power to be held that is
inconsistent with the status of the Trust as a grantor trust for United States
federal income tax purposes.
SECTION 16.07. Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the
Indenture Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel stating that in the opinion of such
officers and counsel all conditions precedent provided for in this Indenture
relating to the proposed action have been complied with, except that in the case
of any such application or demand as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
(b) Each certificate or opinion provided for in this Indenture
and delivered to the Indenture Trustee with respect to compliance with a
condition or covenant in this Indenture shall include:
(i) a statement that the Person signing such
certificate or opinion has read the covenant or condition and
the definitions relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in the certificate or opinion are based;
(iii) a statement that each such officer or counsel
has made such examination or investigation under taken by each
such officer and counsel and as in the opinion of such officer
or counsel, is necessary to enable him to express an informed
opinion as to whether such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of
such officer or counsel, such condition or covenant has been
complied with.
SECTION 16.08. Payments on Business Days.
In any case where the date of maturity of interest, principal
of the Debentures or the date of redemption thereof shall not be a Business Day,
then payment of interest, principal may be made on the next succeeding Business
Day with the same force and effect as if made on the nominal date of maturity or
redemption, and no interest shall accrue with respect to such payment for the
period after such nominal date.
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SECTION 16.09. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control only if
this Indenture shall be required by the Trust Indenture Act to be qualified
under that Act.
SECTION 16.10. Counterparts.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 16.11. Separability.
In case any one or more of the provisions contained in this
Indenture or in the Debentures shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debentures, but this Indenture and such Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
SECTION 16.12. Assignment.
The Company shall have the right at all times to assign any of
its respective rights or obligations under this Indenture to a direct or
indirect Wholly Owned Subsidiary thereof; provided, however, that, in the event
of any such assignment, the Company shall remain liable for all such
obligations. Subject to the foregoing, the Indenture is binding upon and inures
to the benefit of the parties thereto and their respective successors and
assigns. This Indenture may not otherwise be assigned by the parties thereto.
SECTION 16.13. Subordination and Support Agreement.
The Indenture Trustee is hereby authorized and directed to
execute and deliver the Subordination and Support Agreement and to perform the
duties and obligations of the Indenture Trustee thereunder.
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IN WITNESS WHEREOF, the Company and Indenture Trustee have
executed this Indenture as of the day and year first above written.
CROWN MEDIA HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
JPMORGAN CHASE BANK, as Indenture Trustee
By: /s/ Xxxxx Xx
-----------------------------------
Name: Xxxxx Xx
Title: Vice President
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