EXHIBIT 10.2(b)
================================================================================
CINEMARK USA, INC.
AND
THE GUARANTORS FROM TIME
TO TIME PARTIES HERETO
9 % SENIOR SUBORDINATED NOTES DUE 2013
-----------------
INDENTURE
Dated as of February 11, 2003
-----------------
THE BANK OF NEW YORK TRUST COMPANY OF FLORIDA, N.A.
as Trustee
-----------------
================================================================================
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
--------------- -----------------
31 (a)(1).............................................................................. 7.10
0
(a)(2).............................................................................. 7.10
(a)(3).............................................................................. N.A.
(a)(4).............................................................................. N.A.
(a)(5).............................................................................. 7.10
(b)................................................................................. 7.3, 7.10
(c)................................................................................. N.A.
31 (a)................................................................................. 7.11
1
(b)................................................................................. 7.11
(c)................................................................................. N.A.
31 (a)................................................................................. 2.5
2
(b)................................................................................. 12.3
(c)................................................................................. 12.3
313 (a)................................................................................. 7.6
3
(b)(1).............................................................................. N.A.
(b)(2).............................................................................. 7.6, 7.7
(c)................................................................................. 7.6, 12.2
(d)................................................................................. 7.6
31 (a)................................................................................. 4.3, 12.5
4
(b)................................................................................. N.A.
(c)(1).............................................................................. 12.4
(c)(2).............................................................................. 12.4
(c)(3).............................................................................. N.A.
(d)................................................................................. N.A.
(e)................................................................................. 12.5
(f)................................................................................. N.A.
31 (a)................................................................................. 7.1(b)
5
(b)................................................................................. 7.5, 12.2
(c)................................................................................. 7.1(a)
(d)................................................................................. 7.1(c)
(e)................................................................................. 6.11
31 (a)(last sentence).................................................................. 2.9
6
(a)(1)(A)........................................................................... 6.5
(a)(1)(B)........................................................................... 6.4
(a)(2).............................................................................. N.A.
(b)................................................................................. 6.7
(c)................................................................................. 9.4
31 (a)(1).............................................................................. 6.8
7
(a)(2).............................................................................. 6.9
(b)................................................................................. 2.4
31 (a)................................................................................. 12.1
8
(b)................................................................................. N.A.
(c)................................................................................. 12.1
N.A. means not applicable.
* This Cross-Reference Table is not part of the
Indenture.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................1
Section 1.1. Definitions............................................................................1
Section 1.2. Other Definitions.....................................................................19
Section 1.3. Incorporation by Reference of Trust Indenture Act.....................................20
Section 1.4. Rules of Construction.................................................................20
ARTICLE 2 THE NOTES..............................................................................................21
Section 2.1. Form and Dating.......................................................................21
Section 2.2. Execution and Authentication..........................................................23
Section 2.3. Trustee, Registrar and Paying Agent...................................................24
Section 2.4. Paying Agent to Hold Money in Trust...................................................24
Section 2.5. Holder Lists..........................................................................25
Section 2.6. Transfer and Exchange.................................................................25
Section 2.7. Replacement Notes.....................................................................33
Section 2.8. Outstanding Notes.....................................................................34
Section 2.9. Treasury Notes........................................................................34
Section 2.10. Temporary Notes.......................................................................34
Section 2.11. Cancellation..........................................................................35
Section 2.12. Defaulted Interest....................................................................35
Section 2.13. Persons Deemed Owners.................................................................35
Section 2.14. CUSIP Numbers.........................................................................36
Section 2.15. Issuance of Additional Notes..........................................................36
ARTICLE 3 REDEMPTION AND PREPAYMENT..............................................................................37
Section 3.1. Notices to Trustee....................................................................37
Section 3.2. Selection of Notes to Be Redeemed.....................................................37
Section 3.3. Notice of Redemption..................................................................37
Section 3.4. Effect of Notice of Redemption........................................................38
Section 3.5. Deposit of Redemption Price...........................................................38
Section 3.6. Notes Redeemed in Part................................................................39
Section 3.7. Optional Redemption...................................................................39
Section 3.8. Mandatory Redemption..................................................................40
ARTICLE 4 COVENANTS..............................................................................................40
Section 4.1. Payment of Notes......................................................................40
Section 4.2. Maintenance of Office or Agency.......................................................40
Section 4.3. Provisions of Reports and Other Information...........................................41
Section 4.4. Compliance Certificate................................................................42
Section 4.5. Taxes.................................................................................42
i
Section 4.6. Stay, Extension and Usury Laws........................................................43
Section 4.7. Limitation on Restricted Payments.....................................................43
Section 4.8. Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries......................................................................46
Section 4.9. Limitation on Indebtedness............................................................47
Section 4.10. Limitation on Asset Sales.............................................................49
Section 4.11. Limitation on Transactions with Affiliates............................................51
Section 4.12. Limitation on Liens...................................................................52
Section 4.13. Limitation on Layering Debt...........................................................55
Section 4.14. Change of Control.....................................................................55
Section 4.15. Corporate Existence...................................................................57
Section 4.16. Covenant with Respect to Cinemark International and its Subsidiaries..................57
Section 4.17. Limitation on Restrictive Covenants...................................................57
Section 4.18. Additional Subsidiary Guarantors......................................................57
ARTICLE 5 SUCCESSORS.............................................................................................58
Section 5.1. Merger, Consolidation, or Sale of Assets..............................................58
Section 5.2. Successor Company Substituted.........................................................59
ARTICLE 6 DEFAULTS AND REMEDIES..................................................................................59
Section 6.1. Events of Default.....................................................................59
Section 6.2. Acceleration..........................................................................60
Section 6.3. Other Remedies........................................................................61
Section 6.4. Waiver of Past Defaults...............................................................61
Section 6.5. Control by Majority...................................................................61
Section 6.6. Limitation on Suits...................................................................62
Section 6.7. Rights of Holders of Notes to Receive Payment.........................................62
Section 6.8. Collection Suit by Trustee............................................................62
Section 6.9. Trustee May File Proofs of Claim......................................................63
Section 6.10. Priorities............................................................................63
Section 6.11. Undertaking for Costs.................................................................64
ARTICLE 7 TRUSTEE................................................................................................64
Section 7.1. Duties of Trustee.....................................................................64
Section 7.2. Rights of Trustee.....................................................................65
Section 7.3. Individual Rights of Trustee..........................................................66
Section 7.4. Trustee's Disclaimer..................................................................66
Section 7.5. Notice of Defaults....................................................................66
Section 7.6. Reports by Trustee to Holders of the Notes............................................67
Section 7.7. Compensation and Indemnity............................................................67
Section 7.8. Replacement of Trustee................................................................68
Section 7.9. Successor Trustee by Merger, etc......................................................69
Section 7.10. Eligibility; Disqualification.........................................................69
Section 7.11. Preferential Collection of Claims Against Company.....................................69
ii
ARTICLE 8 DEFEASANCE AND DISCHARGE...............................................................................70
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance..............................70
Section 8.2. Legal Defeasance......................................................................70
Section 8.3. Covenant Defeasance...................................................................70
Section 8.4. Conditions to Legal or Covenant Defeasance............................................71
Section 8.5. Discharge.............................................................................72
Section 8.6. Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions..........................................................72
Section 8.7. Repayment to Company..................................................................73
Section 8.8. Reinstatement.........................................................................73
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER.......................................................................74
Section 9.1. Without Consent of Holders of Notes...................................................74
Section 9.2. With Consent of Holders of Notes......................................................75
Section 9.3. Compliance with Trust
Indenture Act...................................................76
Section 9.4. Revocation and Effect of Consents.....................................................76
Section 9.5. Notation on or Exchange of Notes......................................................77
Section 9.6. Trustee to Sign Amendments, etc.......................................................77
Section 9.7. Payments for Consent..................................................................77
ARTICLE 10 SUBORDINATION.........................................................................................78
Section 10.1. Agreement to Subordinate..............................................................78
Section 10.2. Liquidation; Dissolution; Bankruptcy..................................................78
Section 10.3. Default on Designated Senior Indebtedness.............................................78
Section 10.4. Acceleration of Notes.................................................................79
Section 10.5. When Distribution Must Be Paid Over...................................................79
Section 10.6. Notice by the Company.................................................................80
Section 10.7. Subrogation...........................................................................80
Section 10.8. Relative Rights.......................................................................80
Section 10.9. Subordination May Not Be Impaired by the Company......................................81
Section 10.10. Distribution or Notice to Representative..............................................81
Section 10.11. Rights of Trustee and Paying Agent....................................................81
Section 10.12. Authorization to Effect Subordination.................................................82
ARTICLE 11 SUBSIDIARY GUARANTEES.................................................................................82
Section 11.1. Guarantee.............................................................................82
Section 11.2. Subordination of Subsidiary Guarantee.................................................83
Section 11.3. Limitation on Guarantor Liability.....................................................83
Section 11.4. Guarantors May Consolidate, etc., on Certain Terms....................................84
Section 11.5. Releases of Subsidiary Guarantee......................................................85
Section 11.6. Additional Subsidiary Guarantees......................................................85
ARTICLE 12 MISCELLANEOUS.........................................................................................86
iii
Section 12.1. Trust
Indenture Act Controls..........................................................86
Section 12.2. Notices...............................................................................86
Section 12.3. Communication by Holders of Notes with Other Holders of Notes.........................88
Section 12.4. Certificate and Opinion as to Conditions Precedent....................................88
Section 12.5. Statements Required in Certificate or Opinion.........................................88
Section 12.6. Rules by Trustee and Agents...........................................................88
Section 12.7. No Personal Liability of Directors, Officers, Employees and Others....................89
Section 12.8. Governing Law.........................................................................89
Section 12.9. No Adverse Interpretation of Other Agreements.........................................89
Section 12.10. Successors............................................................................89
Section 12.11. Severability..........................................................................89
Section 12.12. Originals.............................................................................90
Section 12.13. Table of Contents, Headings, etc......................................................90
Section 12.14. Counterparts..........................................................................90
EXHIBITS
Exhibit A FORM OF NOTE A-1
Exhibit B CERTIFICATE OF TRANSFEROR B-1
Exhibit C FORM OF REGULATION S CERTIFICATE C-1
Exhibit D FORM OF RULE 144A CERTIFICATE D-1
Exhibit E FORM OF SUPPLEMENTAL
INDENTURE E-1
iv
This
INDENTURE, dated as of February 11, 2003, is among
Cinemark USA, Inc., a Texas corporation (the "Company"), the subsidiary
guarantors from time to time parties hereto (collectively, the "Guarantors") and
The Bank of
New York Trust Company of Florida, N.A., as trustee (the "Trustee").
The parties listed above agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 9% Senior
Subordinated Notes due 2013, Series A (the "Series A Notes") and the 9% Senior
Subordinated Notes due 2013, Series B (the "Series B Notes" and, together with
the Series A Notes, the "Notes").
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1. Definitions.
"Acquired Indebtedness" of any particular Person means
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such particular Person or assumed by such
particular Person in connection with the acquisition of assets from any other
Person, and not incurred by such other Person in connection with, or in
contemplation of, such other Person merging with or into such particular Person
or becoming a Subsidiary of such particular Person or such acquisition.
"Additional Notes" means 9% Senior Subordinated Notes due 2013
of the Company issued under this
Indenture after the Initial Issuance Date in
accordance with Sections 2.2, 2.15 and 4.9 hereof, and having identical terms
and conditions to the Initial Notes or the Exchange Notes issued in exchange for
the Initial Notes.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar or Paying Agent.
"Applicable Law", except as the context may otherwise require,
means all applicable laws, rules, regulations, ordinances, judgments, decrees,
injunctions, writs and orders of any court or governmental or congressional
agency or authority and rules, regulations, orders, licenses and permits of any
United States federal, state, municipal, regional, or other governmental body,
instrumentality, agency or authority.
"Applicable Premium" means, with respect to a Note at any
Change of Control Redemption Date, the greater of (i) 1.0% of the principal
amount of such Note, and (ii) the excess of (A) the present value at such time
of (1) the redemption price of such Note at February 1, 2008 (such redemption
price as determined under Section 3.7) plus (2) all required interest payments
due on such Note through February 1, 2008 computed using a discount rate equal
to the Treasury Rate plus 0.50% per annum, over (B) the principal amount of such
Note.
"Asset Disposition" means any sale, lease, conveyance,
transfer or other disposition (or series of related sales, leases, conveyances,
transfers or dispositions) of any Capital Stock of a Restricted Subsidiary of
the Company (whether or not upon issuance), or of any Capital Stock of Cinemark
International by the Company or any Restricted Subsidiary of the Company (but
not the issuance and sale of Capital Stock by Cinemark International), or of any
other property or other assets (each referred to for the purposes of this
definition as a "disposition") by the Company or any of its Restricted
Subsidiaries, whether for cash or other consideration, other than (i) a
disposition by a Restricted Subsidiary of the Company to the Company or a Wholly
Owned Subsidiary of the Company that is a Restricted Subsidiary, (ii) a
disposition by the Company to a Wholly Owned Subsidiary of the Company that is a
Restricted Subsidiary, (iii) a disposition that is a Permitted Investment or a
Restricted Payment not prohibited by Section 4.7 (to the extent such Permitted
Investment or Restricted Payment may be deemed to constitute an Asset
Disposition), (iv) dispositions of inventory in the ordinary course of business,
(v) a disposition pursuant to Section 5.1, (vi) exchanges of theatre properties
that comply with the requirements described in Section 4.10(f), provided that
payment of any Other Consideration shall, to the extent provided therein, be
treated as an Asset Disposition, (vii) a designation of a Restricted Subsidiary
as an Unrestricted Subsidiary, if the Company elects to treat such designation
as an Investment and not as an Asset Disposition, (viii) a disposition by the
Company or any Restricted Subsidiary of the Company to the extent such
disposition constitutes a Permitted Capitalized Lease, or (ix) a disposition of
Capital Stock, property or assets in a single transaction or a series of related
transactions (other than dispositions of the type described in clauses (i)
through (viii) above) having a Fair Market Value of less than $5 million. For
purposes of this definition, "Fair Market Value" of any Capital Stock, property
or other assets means the fair market value of such Capital Stock, property or
other assets at the time of disposition, which in the case of any disposition or
series of related dispositions having an aggregate fair market value of $2
million or more shall be determined in good faith (taking into account, without
limitation, any assumption of indebtedness in connection with such disposition)
by resolution of the Board of Directors. Notwithstanding any provision of this
Indenture to the contrary, the expiration or non-renewal of any lease of theatre
properties or equipment at the normal expiration date thereof without payment to
the Company or any of its Restricted Subsidiaries of consideration therefor
shall not constitute an Asset Disposition.
"Asset Disposition Expenses" shall have the meaning assigned
to such term in the definition of the term "Net Proceeds."
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, as may be
amended from time to time, or any similar federal or state law for the relief of
debtors.
"Board of Directors" means the Board of Directors of the
Company, or any authorized committee of the Board of Directors.
2
"Business Day" means any day other than a Saturday, Sunday,
public holiday or day on which banking institutions in
New York (or, with
respect to any payments or transfers to be made by the Trustee or any Agent, as
applicable, in the city where such Trustee or Agent is located) are authorized
or obligated by law or executive order to close.
"Capitalized Lease Obligations" means the capitalized amount
of the rental obligations of any Person under any lease of any property (whether
real, personal or mixed) which, in accordance with GAAP, is required to be
capitalized on the balance sheet of such Person.
"Capital Stock" of any Person means (i) any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock and any warrants, options and similar rights to acquire
such capital stock, (ii) in the case of a partnership, partnership interests
(whether general or limited) and (iii) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash" means money or currency or a credit balance in a
Deposit Account.
"Cash Equivalents" means (i) direct obligations of the United
States of America or any agency thereof having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any domestic commercial bank of recognized standing having capital
and surplus in excess of $500 million, with maturities of not more than one year
from the date of acquisition, (iii) repurchase obligations issued by any bank
described in clause (ii) above with a term not to exceed 30 days, (iv)
commercial paper rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's, in each case maturing within one year
after the date of acquisition and (v) shares of any money market mutual fund, or
similar fund, in each case having assets in excess of $500 million, which
invests predominantly in investments of the types described in clauses (i)
through (iv) above.
"Change of Control" means (i) the acquisition, including
through merger, consolidation or otherwise, by any Person or any Persons acting
together which would constitute a "group" (a "Group") for purposes of Section
13(d) of the Exchange Act, together with all affiliates and associates (as
defined in Rule 12b-2 under the Exchange Act) thereof, of direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of more
than 50% of (A) the outstanding shares of Common Stock of the Company or (B) the
total voting power of all classes of Capital Stock of the Company entitled to
vote generally in the election of directors, (ii) the election by any Person or
Group, together with all affiliates and associates thereof, of a sufficient
number of its or their nominees to the Board of Directors such that such
nominees, when added to any existing directors remaining on such Board of
Directors after such election who are affiliates or associates of such Person or
Group, shall constitute a majority of such Board of Directors; (iii) the direct
or indirect sale, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole to any "person" (as that term is used
in Section 13(d)(3) of the Exchange Act); and (iv) the adoption of a plan
relating to the liquidation or dissolution of the Company; provided, however,
that, for purposes of this definition, the terms "Person" and "Group" shall be
deemed
3
not to include (i) the Company, (ii) any Restricted Subsidiary of the Company
that is a Wholly Owned Subsidiary, (iii) Xxx Xxx Xxxxxxxx or Xxxxx Xxxxxxxx, or
any descendant of Xxx Xxx Xxxxxxxx or the spouse of any such descendant, the
estate of Xxx Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, any descendant of Xxx Xxx Xxxxxxxx
or the spouse of any such descendant or any trust or other arrangement for the
benefit of Xxx Xxx Xxxxxxxx, Xxxxx Xxxxxxxx, any descendant of Xxx Xxx Xxxxxxxx
or the spouse of any such descendant (collectively, the "Xxxxxxxx Family"), (iv)
any group which includes any member or members of the Xxxxxxxx Family if a
majority of the Capital Stock of the Company held by such group is beneficially
owned (including the power to vote such Capital Stock of the Company) by such
member or members or by one or more affiliates at least 80% of the equity
interests of which are owned by such member or members or (v) Cypress Merchant
Banking Partners L.P. or Cypress Pictures Ltd., and provided, further, that, the
term "Change of Control" shall be deemed not to include any transaction or
series of transactions that results in the Capital Stock of the Company being
held by one or more Persons if the beneficial ownership, direct or indirect, of
the Company after such transaction or series of transactions is substantially
the same as the beneficial ownership, direct or indirect, of the Company prior
to such transaction or series of transactions.
"Cinemark International" means any Foreign Unrestricted
Subsidiary of the Company.
"Clearstream" means Clearstream Banking, societe anonyme
(formerly Cedelbank).
"Commission" or "SEC" means the Securities and Exchange
Commission, and any successor thereto.
"Common Stock" of any Person means Capital Stock of such
Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Consolidated EBITDA" of any Person means, for any period
(without duplication), (i) the sum of (A) Consolidated Net Income, (B)
Consolidated Interest Expense, (C) provisions for taxes based on or calculated
with respect to income, (D) depreciation expense, (E) amortization expense, and
(F) all other non-cash items reducing Consolidated Net Income, less all non-cash
items increasing Consolidated Net Income, minus (ii) any decrease in deferred
lease expenses, all as determined on a consolidated basis for such Person and
its Restricted Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" of any Person means, for any
period, without duplication, the total interest expense of such Person and its
Restricted Subsidiaries determined on a consolidated basis in accordance with
GAAP, including (i) non-cash, payable-in-kind interest, (ii) interest expense
attributable to capital leases, (iii) amortization of debt discount and debt
issue cost (excluding related legal and accounting fees), but only with respect
to transactions consummated after the Start Date, (iv) commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (v) net costs under Hedging Obligations (including
amortizations of discount), (vi) preferred stock dividends
4
in respect of preferred stock of Restricted Subsidiaries of such Person, other
than payable-in-kind dividends in respect of preferred stock that is not
Disqualified Stock, held by Persons other than such Person or one of its Wholly
Owned Subsidiaries that is a Restricted Subsidiary, and (vii) dividends in
respect of Disqualified Stock of such Person, but excluding any interest expense
attributable to Permitted Capitalized Leases.
"Consolidated Net Income" of any Person means, for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
however, including, in the case of the Company and its Restricted Subsidiaries,
only those management fees actually received by the Company from its
Unrestricted Subsidiaries, and excluding amortization of debt discount and debt
issue costs with respect to transactions consummated on or prior to the Start
Date, provided that (i) accrued but unpaid compensation expenses related to any
stock appreciation or stock option plans shall not be deducted until such time
as such expenses result in a cash expenditure, (ii) compensation expenses
related to tax payment plans implemented by the Company from time to time in
connection with the exercise and/or repurchase of stock options shall not be
deducted from Net Income to the extent of the related tax benefits arising
therefrom, (iii) the Net Income of any Person that is not a Restricted
Subsidiary of such Person or that is accounted for by such Person by the equity
method of accounting shall not be included in such Consolidated Net Income,
except that the Company's equity in the Net Income of any such Person for any
such period or any previous period shall be so included only up to the aggregate
amount of cash dividends or distributions paid to the Company or one of its
Restricted Subsidiaries, and (iv) the Net Income (if positive) of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded. For purposes of this definition, "Net
Income" of any Person means, for any period, the net income (or loss) of such
Person determined in accordance with GAAP, excluding, however, from the
determination (i) any extraordinary loss resulting from early extinguishment of
debt on or prior to the Start Date, (ii) any net gain or loss from any
extraordinary item (net of all related taxes, fees, costs and expenses), (iii)
any net gain or loss (net of all related taxes and Asset Disposition Expenses)
realized upon the sale or other disposition during such period (including
without limitation dispositions pursuant to sale and leaseback transactions) of
any real property, equipment or other asset of such Person, which is not sold or
otherwise disposed of in the ordinary course of business, or of any Capital
Stock of such Person or a Restricted Subsidiary of such Person, (iv) the
cumulative effect of changes in accounting principles and (v) gains, losses or
charges resulting from the application of Financial Accounting Standard No. 133.
"Consolidated Net Worth" of any Person means, as of any date,
the amount which, in accordance with GAAP, would be set forth under the caption
"Shareholders' Equity" (or any like caption) on a consolidated balance sheet of
such Person and its Restricted Subsidiaries, less amounts attributable to
Disqualified Stock of such Person or any of its Restricted Subsidiaries.
"Consolidated Tangible Assets" of any Person means, as of any
date, the amount which, in accordance with GAAP, would be set forth under the
caption "Total Assets" (or any like caption) on a consolidated balance sheet of
such Person and its Restricted Subsidiaries, less all intangible assets,
including, without limitation, goodwill, organization costs, patents,
trademarks, copyrights, franchises, and research and development costs.
5
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 12.2 hereof or such other address as
to which the Trustee may give notice to the Company.
"Credit Facility" means that certain Second Amended and
Restated Reducing Revolving Credit Agreement, dated as of February 12, 1998,
among the Company, the financial institutions from time to time parties thereto,
and Bank of America, N.A., as agent for such financial institutions, and the
various ancillary documents provided for therein, as the same may have been and
may hereafter be amended, extended, increased, 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 or agreements governing Indebtedness incurred to refinance, replace,
restructure or refund such agreements in whole or in part from time to time
(whether with the original agent and lenders or other agents and lenders or
otherwise, and whether provided for under the original Credit Facility or
otherwise).
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian or similar official under any Bankruptcy Law.
"Default" means any event, act or condition which is, or after
notice or passage of time or both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of the
Notes attached hereto as Exhibit A that do not include the text and schedule
called for by footnotes 1, 3 and 4 thereof.
"Deposit Account" means a demand, savings, passbook, money
market or like account with a commercial bank, savings and loan association or
like organization or a government securities dealer, other than an account
evidenced by a negotiable certificate of deposit.
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.3
hereof as the Depositary with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) the Credit Facility
and all Indebtedness thereunder and (ii) any other Senior Indebtedness issued
after the Start Date and permitted under this Indenture, the principal amount of
which is $10 million or more and that has been designated by the Company as
Designated Senior Indebtedness.
"Disqualified Stock" of any Person means any Capital Stock of
such Person that, by its terms (or by the terms of any security into which it is
convertible or for which it is exercisable, redeemable or exchangeable),
matures, or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole or in
part (but only to the extent of such part), on or prior to the Stated Maturity
of the Notes.
6
"Domestic Restricted Subsidiary" means any Restricted
Subsidiary of the Company that is organized under the laws of the United States,
any state thereof or the District of Columbia.
"EBITDA Ratio" of any Person means the ratio of (i) the
aggregate amount of Consolidated EBITDA of such Person for the four full fiscal
quarters immediately prior to the date of the transaction giving rise to the
need to calculate the EBITDA Ratio (the "Determination Date") to (ii) the
aggregate Consolidated Interest Expense which such Person shall accrue during
the fiscal quarter in which the Determination Date occurs and the three fiscal
quarters immediately subsequent to such fiscal quarter, assuming that the
Consolidated Interest Expense shall accrue on the amount of such Person's
Indebtedness on the Determination Date, including any Indebtedness proposed to
be incurred on such date (as though all such Indebtedness was incurred on the
first day of the quarter in which the Determination Date occurred), but
specifically excluding Indebtedness proposed to be repaid or defeased (or with
respect to the defeasance of which a deposit satisfying the defeasance
requirements of such Indebtedness has irrevocably been made) on such date (as
though all such Indebtedness was repaid on the first day of the quarter in which
the Determination Date occurred); provided that if during the four-quarter
period referred to in clause (i) above, the Person for which the EBITDA Ratio is
being determined or any of its Restricted Subsidiaries shall have acquired any
assets other than assets acquired as a result of capital expenditures made in
the ordinary course of business of such Person, the EBITDA Ratio of such Person
as of such Determination Date shall be calculated on a pro forma basis, as if
such acquisition had occurred at the beginning of such four-quarter period. For
purposes of this definition, interest on Indebtedness determined on a
fluctuating basis for periods succeeding the Determination Date shall be
calculated as if the rate in effect on the Determination Date had been the
applicable rate for the entire period, taking into account any Hedging
Obligations applicable to such Indebtedness.
"Equity Offering" means either (i) a bona fide underwritten
sale to the public of Common Stock of the Company or a Parent pursuant to a
registration statement (other than a Form S-8 or any other form relating to
securities issuable under any employee benefit plan of the Company) that is
declared effective by the Commission, or (ii) a privately negotiated sale of
Common Stock of the Company or a Parent by the Company or such Parent, as the
case may be, to a Person that, immediately prior to the time of such sale, is
not an Affiliate of the Company or such Parent, in each case completed following
the Start Date and resulting in aggregate gross proceeds to the Company or such
Parent of at least $20 million; provided, that in the case of any such sale of
Common Stock of a Parent, (x) the net proceeds of such sale shall be contributed
within 30 days by such Parent to the Company or (y) the Parent shall use such
proceeds to purchase Capital Stock of the Company that is not Disqualified
Stock.
"Euroclear" means Xxxxxx Guaranty Trust Company of
New York,
Brussels office, as operator of the Euroclear System.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
"Exchange Notes" means the Series B Notes to be issued by the
Company upon the expiration of an Exchange Offer pursuant to the terms of a
Registration Rights Agreement,
7
containing terms substantially identical to the Series A Notes (except that (i)
the transfer restrictions thereon shall be eliminated (other than as may be
imposed by state securities laws) and (ii) there will be no provision for the
payment of Liquidated Damages).
"Exchange Offer" means, subject to the terms of a Registration
Rights Agreement, the offer by the Company to the Holders of the opportunity to
exchange their Series A Notes for Exchange Notes pursuant to a registration
statement filed with the Commission.
"Existing Unrestricted Subsidiaries" means Cinemark
International, L.L.C.; CNMK Brasil Investments, Inc.; TPH I, Inc.; TPH II, Inc.;
TPH III, Inc.; TPH IV, Inc.; TPH V, Inc.; TPH VI, Inc.; Worldwide Invest, Inc.
and their respective Subsidiaries.
"50% Entity" shall have the meaning assigned to such term in
the definition of the term "Subsidiary."
"Foreign Subsidiary" means any Subsidiary of the Company or
any Restricted Subsidiary that is not organized under the laws of the United
States, any state thereof or the District of Columbia.
"Foreign Unrestricted Subsidiary" means any Unrestricted
Subsidiary of the Company which (i) is not organized under the laws of the
United States, any state thereof or the District of Columbia and (ii) conducts
its business operations principally outside the United States of America and
Canada.
"GAAP" means generally accepted accounting principles as
applied in the United States set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, which are applicable as of the date of determination; provided that the
definitions in this Indenture and all ratios and calculations contained in the
covenants shall be determined in accordance with GAAP as in effect and applied
by the Company as of the Start Date, consistently applied; provided, further,
that in the event of any such change in GAAP or in any change by the Company in
the way in which GAAP is applied that would result in any change in any such
ratio or calculation, the Company shall deliver to the Trustee each time any
such ratio or calculation is required to be determined or made, an Officer's
Certificate setting forth the computations showing the effect of such change or
application on such ratio or calculation.
"Global Notes" has the meaning specified in Section 2.1(a).
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America or any agency or
instrumentality thereof for the payment of which guarantee or obligations the
full faith and credit of the United States is pledged.
"guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or
8
payment of) such Indebtedness of such other Person (whether arising by virtue of
participation arrangements, by agreement to keep well, or to maintain financial
statement conditions or otherwise), (ii) to purchase, sell or lease (as lessee
or lessor) property, or to purchase or sell services, primarily for the purpose
of enabling such other Person to make payment of such Indebtedness, (iii) to
supply funds to or in any other manner invest in such other Person (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered), or (iv) entered into for
the purpose of assuring the obligee of such Indebtedness in any other manner of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term "guarantee" shall not include (i)
endorsements for collection or deposit in the ordinary course of business, and
(ii) leases entered into in the ordinary course of business.
"Guarantors" means each Restricted Subsidiary of the Company
that executes and delivers this Indenture on the Initial Issuance Date as a
guarantor and each other Restricted Subsidiary of the Company that thereafter
guarantees the Notes pursuant to the terms of this Indenture, and their
respective successors and assigns, in each case unless and until such Restricted
Subsidiary is released from its obligations under its Subsidiary Guarantee
pursuant to this Indenture.
"Hedging Obligation" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Holder" or "Securityholder" means a Person in whose name a
Note is registered on the Register.
"Indebtedness" of any Person means, at any date, and without
duplication, any obligation of such Person or its Restricted Subsidiaries for or
in respect of: (i) money borrowed (whether or not for a cash consideration and
whether or not the recourse of the lender is to the whole of the assets of such
Person or only a portion thereof) and premiums (if any) and capitalized interest
(if any) in respect thereof; (ii) any debenture, bond, note or similar
instrument (whether or not issued for a cash consideration), if it would appear
as a liability on a balance sheet of such Person prepared in accordance with
GAAP; (iii) any letter of credit (other than in respect of Trade Payables),
bankers' acceptance or note purchase facility or any liability with respect to
any recourse receivables purchase, factoring or discounting arrangement; (iv)
Capitalized Lease Obligations (whether in respect of buildings, machinery,
equipment or otherwise), except any such obligation that represents a Trade
Payable; (v) any deferred purchase or conditional sale agreement or arrangement
representing the deferred and unpaid balance of the purchase price of any
property (including pursuant to financing leases), except any such balance which
represents a Trade Payable; (vi) all obligations to purchase, redeem, retire,
defease or otherwise acquire for value any Disqualified Stock of such Person (or
any warrants, rights or options to acquire such Disqualified Stock) valued, in
the case of Disqualified Stock, at the
9
greatest amount payable in respect thereof on a liquidation (whether voluntary
or involuntary), prior to the Stated Maturity of the Notes, plus accrued and
unpaid dividends; (vii) preferred stock of Restricted Subsidiaries of such
Person held by Persons other than such Person or one of its Wholly Owned
Subsidiaries that is a Restricted Subsidiary; (viii) direct or indirect
guarantees of all Indebtedness of other Persons referred to in clauses (i)
through (vii) above; and (ix) all Indebtedness of the types referred to in
clauses (i) through (viii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on any asset owned by such Person or its Restricted Subsidiaries (even
though such Person or its Restricted Subsidiaries have not assumed or become
liable for the payment of such Indebtedness); provided, that the term
"Indebtedness" shall not be deemed to include any liability for federal, state,
local or other taxes owed or owing by the Company. The amount of Indebtedness of
any Person or its Restricted Subsidiaries at any date shall be (without
duplication) (i) the outstanding balance at such date of all unconditional
Indebtedness obligations as described above and the maximum liability of any
such contingent Indebtedness obligations at such date, (ii) in the case of
Indebtedness of others secured by a Lien to which the property or assets owned
or held by such Person or its Restricted Subsidiaries is subject, the lesser of
the fair market value at such date of any property and assets subject to a Lien
securing the Indebtedness of others and the amount of the Indebtedness secured,
and (iii) in the case of Indebtedness of others guaranteed by such Person as
described above, the lesser of the maximum amount of such guaranty and the
amount of the Indebtedness guaranteed. A guaranty of Indebtedness of the Company
or a Restricted Subsidiary of the Company that is permitted under this Indenture
shall not constitute a separate incurrence of Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Initial Issuance Date" means February 11, 2003.
"Initial Notes" means the $150,000,000 aggregate principal
amount of Series A Notes issued by the Company on the Initial Issuance Date.
"Interest Payment Date" means each of February 1 and August 1.
"Investment" means any direct or indirect advance, loan or
other extension of credit 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,
bonds, notes, debentures or other securities issued by, any other Person, other
than (i) loans or advances made to employees in the ordinary course of business
not in excess of $50,000 outstanding at any time to any employee, (ii) advances
to customers or suppliers in the ordinary course of business that are recorded
as accounts receivable on the balance sheet of any Person or its Subsidiaries
and any securities received in settlement thereof or as a result of a bankruptcy
or an insolvency proceeding, (iii) workers' compensation, utility, lease and
similar deposits and prepaid expenses in the ordinary course of business, (iv)
Capital Stock, bonds, notes, debentures and other assets received as a result of
Asset Dispositions not prohibited by Section 4.10, and (v) endorsements of
negotiable instruments and documents in the ordinary course of business. In
addition, (i) the fair market value of the assets (net of liabilities) of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary shall constitute an Investment in such Subsidiary in
such amount, if the
10
Company has elected that such designation be deemed to be an Investment and not
an Asset Disposition, and (ii) the lesser of (A) the amount of Restricted
Payments made to any Unrestricted Subsidiary or (B) the fair market value of the
assets (net of liabilities) of such Unrestricted Subsidiary, in each case at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary of
the Company, shall constitute a return of capital and a decrease in the amount
of the Company's Investment in such Subsidiary.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the Company's principal place of business, the City of
New York or at a place of payment are authorized by law, regulation or executive
order to remain closed. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.
"Lien" means any mortgage, lien, pledge, security interest,
conditional sale or other title retention agreement, charge or other security
interest or encumbrance of any kind (including any agreement to give any
security interest).
"Liquidated Damages" means liquidated damages as defined in
Section 5 of the Registration Rights Agreement.
"Marketable Equity Securities" means shares of Capital Stock
of any Person that are listed on the
New York Stock Exchange, the American Stock
Exchange or the national market tier of the NASDAQ National Market and, upon
receipt by the Company or a Restricted Subsidiary, such shares are freely
tradeable under the Securities Act and applicable state securities laws and are
so listed or included for trading privileges.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Proceeds" means the aggregate amount of consideration in
the form of cash, Temporary Cash Investments or Marketable Equity Securities
received by the Company or any of its Restricted Subsidiaries with respect to
any Asset Disposition, after deducting therefrom brokerage commissions,
appraisal fees, survey charges, engineering fees, title insurance premiums,
legal fees, finder's fees, loan origination and similar fees, underwriting fees,
investment banking fees and other similar commissions or fees, and any filing,
recording or registration fees, costs and expenses, recording taxes, transfer
taxes, provisions for all taxes payable as a result of such Asset Disposition,
amounts required to be paid to any Person owning a beneficial interest in the
assets subject to such Asset Disposition, and appropriate amounts to be provided
as a reserve in accordance with GAAP against any liabilities associated with
such Asset Disposition after such Asset Disposition (to the extent such reserves
are not subsequently reversed), including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Disposition ("Asset Disposition Expenses"), and also less any amounts
required to be applied to retire all or a portion of the Notes or Indebtedness
permitted under Section 4.9 having the benefit of a Lien on the property or
assets so transferred, to the extent, but only to the extent, that such amounts
are paid by the Company or one of its Restricted Subsidiaries or are amounts for
which the Company or one of its Restricted Subsidiaries is
11
directly and not contingently liable, as the case may be, and properly
attributable to the transaction in respect of which such consideration is
received or to the asset that is the subject of such transaction.
"Notes" has the meaning assigned to it in the preamble to this
Indenture, and includes (1) the Initial Notes, (2) any Additional Notes and (3)
any Exchange Notes.
"Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Obligations" means any principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offer" means a Change of Control Offer or Net Proceeds Offer,
as the case may be.
"Offer Purchase Date" means a Change of Control Purchase Date
or Net Proceeds Purchase Date, as the case may be.
"Offering Memorandum" means the Offering Memorandum, dated
February 6, 2003 relating to the offering of the Initial Notes.
"Officer" means, with respect to any Person, 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 Secretary, any Assistant Secretary, or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom must be the Chairman
of the Board, the President or the Chief Financial Officer of the Company, that
meets the requirements of Section 12.5 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
12.5 hereof. The counsel may be counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Parent" shall mean Cinemark, Inc., CNMK Holding, Inc. or any
other Person or group of Persons created to effectuate a holding company
structure for the Company and its Subsidiaries.
"Parent Subordinated Indebtedness" means Indebtedness of the
Company that is borrowed from a Parent of the Company from the proceeds of an
Equity Offering by a Parent within 60 days of the incurrence of such
Indebtedness which Indebtedness by its terms or by the terms of any agreement or
instrument pursuant to which such Indebtedness is incurred (x) is expressly made
subordinate in right of payment to the Notes and (y) provides that no payment of
principal, premium or interest on, or any other payment with respect to, such
Indebtedness may be made prior to 91 days after the payment in full of all of
the Company's obligations under the Notes.
12
"Permitted Capitalized Leases" means obligations of the
Company or any Restricted Subsidiary of the Company up to $50 million in the
aggregate at any one time outstanding that are classified as "Capital Lease
Obligations" under GAAP due to the application of Emerging Issues Task Force
Regulation 97-10 or similar pronouncements and except for such regulation or
pronouncement, would not constitute Capital Lease Obligations.
"Permitted Investment" means (i) an Investment in the Company
or a Wholly Owned Subsidiary of the Company that is a Restricted Subsidiary;
(ii) an Investment in a Person, if such Person or a Subsidiary of such Person
will, as a result of the making of such Investment and all other contemporaneous
related transactions, become a Wholly Owned Subsidiary of the Company that is a
Restricted Subsidiary or be merged or consolidated with or into or transfer or
convey all or substantially all its assets to the Company or a Wholly Owned
Subsidiary of the Company that is a Restricted Subsidiary; (iii) a Temporary
Cash Investment; (iv) payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
in accordance with GAAP; (v) stock, obligations or securities received in
settlement of debts owing to the Company or a Restricted Subsidiary of the
Company as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection, enforcement or agreement in lieu of foreclosure of any
Lien in favor of the Company or a Restricted Subsidiary of the Company; (vi)
refundable construction advances made with respect to the construction of
properties of a nature or type that are used in a business similar or related to
the business of the Company or its Restricted Subsidiaries in the ordinary
course of business; (vii) advances or extensions of credit on terms customary in
the industry in the form of accounts or other receivables incurred, or pre-paid
film rentals, and loans and advances made in settlement of such accounts
receivable, all in the ordinary course of business; (viii) guarantees not
prohibited by Section 4.9; (ix) entry into and Investments in joint ventures,
partnerships and other Persons engaged or proposing to engage in the indoor
motion picture exhibition business, provided that (A) the Person into which such
Investment is made is either a Restricted Subsidiary of the Company, or such
Person or a Subsidiary of such Person will, as a result of the making of such
Investment and all other contemporaneous related transactions, become a
Restricted Subsidiary of the Company and (B) the amount of such Investment,
valued at the time made, together with all outstanding Investments previously
made pursuant to this clause (ix), valued at the respective times made, shall
not exceed 10% of Consolidated Tangible Assets of the Company as of the last day
of the full fiscal quarter ending immediately prior to the date of such
Investment; (x) any Investment made solely with funds the payment or application
of which is not restricted pursuant to Section 4.7; (xi) Investments in the
Notes and Senior Subordinated Notes; (xii) any consolidation or merger of a
Restricted Subsidiary that is a Wholly Owned Subsidiary of the Company to the
extent otherwise permitted under this Indenture; (xiii) payments of up to $1.5
million annually to repurchase Capital Stock of the Parent issued under the
Parent's employee stock option plans; (xiv) Hedging Obligations of the Company
or any of its Restricted Subsidiaries to the extent otherwise permitted under
this Indenture; (xv) Investments in Cinemark International not to exceed $60
million; and (xvi) other Investments outstanding at any time not to exceed $15
million.
"Person" means any individual, corporation, partnership, joint
venture, limited liability company, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
13
"Qualified Institutional Buyer" has the meaning set forth in
Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Initial Issuance Date, by and among the Company and
the other parties thereto, as such agreement may be amended, modified or
supplemented from time to time and, with respect to any Additional Notes, one or
more registration rights agreements among the Company and the other parties
thereto, as such agreement(s) may be amended, modified or supplemented from time
to time, relating to rights given by the Company to the purchasers of Additional
Notes to register such Additional Notes under the Securities Act.
"Regulation S" means Regulation S under the Securities Act and
any successor regulation thereto.
"Regulation S Global Note" has the meaning specified in
Section 2.1(a).
"Representative" means, for any Senior Indebtedness, the
trustee, agent or representative with respect to such Senior Indebtedness.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above-designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Global Note" has the meaning specified in Section
2.1(a).
"Restricted Period" has the meaning specified in Section
2.1(b)(B).
"Restricted Subsidiary" means (i) any Subsidiary of the
Company in existence on the Start Date other than the Existing Unrestricted
Subsidiaries, (ii) any Subsidiary of the Company (other than a Subsidiary that
is also a Subsidiary of an Unrestricted Subsidiary) organized or acquired after
the Start Date, unless such Subsidiary shall have been designated as an
Unrestricted Subsidiary by resolution of the Board of Directors as provided in
and in compliance with the definition of "Unrestricted Subsidiary," and (iii)
any Unrestricted Subsidiary which is designated as a Restricted Subsidiary by
the Board of Directors; provided that, immediately after giving effect to the
designation referred to in clause (iii), no Default or Event of Default shall
have occurred and be continuing and the Company could incur at least $1.00 of
additional Indebtedness under Section 4.9(a). The Company shall evidence any
such designation to the Trustee by promptly filing with the Trustee an Officer's
Certificate certifying that such designation has been made and stating that such
designation complies with the requirements of the immediately preceding
sentence.
"Rule 144" means Rule 144 under the Securities Act and any
successor rule thereto.
"Rule 144A" means Rule 144A under the Securities Act and any
successor rule thereto.
14
"S&P" means Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations thereunder.
"Senior Indebtedness" means (i) Indebtedness under the Credit
Facility and (ii) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms of this Indenture, unless the
instrument under which such Indebtedness is incurred provides that it is on a
parity with or subordinated in right of payment to the Notes or the Subsidiary
Guarantee, as the case may be. Notwithstanding anything to the contrary in the
foregoing, Senior Indebtedness will not include (x) the Notes, the Senior
Subordinated Notes and any guarantees of the Notes and the Senior Subordinated
Notes, (y) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates or of any Guarantor to the Company or any of the Company's
Subsidiaries or other Affiliates, or (z) any Indebtedness that is incurred in
violation of the terms of this Indenture.
"Senior Subordinated Indentures" means (i) the indenture,
dated as of August 15, 1996, by and between the Company and The Bank of
New York
Trust Company of Florida, N.A., successor to U.S. Trust Company of Texas, N.A.,
as Trustee, as amended by that certain First Supplemental Indenture thereto,
dated as of June 26, 1997, and as further amended or supplemented from time to
time, (ii) the indenture, dated as of June 26, 1997, by and between the Company
and The Bank of
New York Trust Company of Florida, N.A., successor to U.S. Trust
Company of Texas, N.A., as Trustee, as amended or supplemented from time to
time, and (iii) the indenture, dated as of January 14, 1998, by and between the
Company and The Bank of
New York Trust Company of Florida, N.A., successor to
U.S. Trust Company of Texas, N.A., as Trustee, as amended or supplemented from
time to time.
"Senior Subordinated Notes" means the aggregate $275 million
principal amount of the Company's 9-5/8% Senior Subordinated Notes due 2008,
Series B and Series D and the $105 million principal amount of the Company's
8-1/2% Senior Subordinated Notes due 2008 issued by the Company pursuant to the
Senior Subordinated Indentures.
"Significant Subsidiary" means, at any date of determination,
any Restricted Subsidiary of the Company that, together with its Restricted
Subsidiaries, (i) for the most recent fiscal year of the Company, accounted for
more than 5% of the consolidated revenues of the Company and its Restricted
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of more
than 5% of the consolidated assets of the Company and its Restricted
Subsidiaries, all as set forth on the most recently available consolidated
financial statements of the Company for such fiscal year.
"Start Date" means the Initial Issuance Date.
"Stated Maturity" means, when used with respect to any
security, the date specified in such security as the fixed date on which an
amount equal to the principal of such security is due and payable.
"Subsidiary" means, with respect to any Person, (i) a Person a
majority of whose Capital Stock with voting power under ordinary circumstances
to elect directors (or Persons
15
having similar or corresponding powers and responsibilities) is at the time,
directly or indirectly, owned by such Person, by one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (ii) upon
designation by the Company, and until designation by the Company to the
contrary, a Person, 50% of whose Capital Stock with voting power under ordinary
circumstances to elect directors (or Persons having similar or corresponding
powers and responsibilities) is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof (a "50% Entity"). The Company shall evidence
any designation pursuant to clause (ii) of the immediately preceding sentence to
the Trustee by filing with the Trustee within 45 days of such designation an
Officer's Certificate certifying that such designation has been made. All
references within this Indenture to designations of Unrestricted Subsidiaries as
Restricted Subsidiaries or Restricted Subsidiaries as Unrestricted Subsidiaries
shall be deemed to include designations of 50% Entities as Restricted
Subsidiaries and Restricted Subsidiaries as 50% Entities, respectively.
"Subsidiary Guarantee" means the guarantee of the obligations
of the Company under this Indenture and the Notes.
"Temporary Cash Investments" means any Investment in the
following kinds of instruments: (A) readily marketable obligations issued or
unconditionally guaranteed as to principal and interest by the United States of
America or by any agency or authority controlled or supervised by and acting as
an instrumentality of the United States of America if, on the date of purchase
or other acquisition of any such instrument by the Company or any Restricted
Subsidiary of the Company, the remaining term to maturity or interest rate
adjustment is not more than two years; (B) obligations (including, but not
limited to, demand or time deposits, bankers' acceptances and certificates of
deposit) issued or guaranteed by a depository institution or trust company
incorporated under the laws of the United States of America, any state thereof,
the District of Columbia, Canada or any province or territory thereof, provided
that (1) such instrument has a final maturity not more than one year from the
date of purchase thereof by the Company or any Restricted Subsidiary of the
Company and (2) such depository institution or trust company has at the time of
the Company's or such Restricted Subsidiary's Investment therein or contractual
commitment providing for such Investment, (x) capital, surplus and undivided
profits (as of the date of such institution's most recently published financial
statements) in excess of $100 million and (y) the long-term unsecured debt
obligations (other than such obligations rated on the basis of the credit of a
Person other than such institution) of such institution, at the time of the
Company's or such Restricted Subsidiary's Investment therein or contractual
commitment providing for such Investment, are rated in the highest rating
category of both S&P and Xxxxx'x; (C) commercial paper issued by any
corporation, if such commercial paper has, at the time of the Company's or any
Restricted Subsidiary's Investment therein or contractual commitment providing
for such Investment, credit ratings of at least A-1 by S&P and P-1 by Xxxxx'x;
(D) money market mutual or similar funds having assets in excess of $100
million; (E) readily marketable debt obligations issued by any corporation, if
at the time of the Company's or any Restricted Subsidiary's Investment therein
or contractual commitment providing for such Investment (1) the remaining term
to maturity is not more than two years and (2) such debt obligations are rated
in one of the two highest rating categories of both S&P and Xxxxx'x; (F) demand
or time deposit accounts used in the ordinary course of business with commercial
banks the balances in which are at all times fully insured as to principal and
interest by the Federal Deposit Insurance Corporation or any successor thereto
or any Canadian
16
equivalent thereof; (G) demand or time deposit accounts used in the ordinary
course of business with overseas branches of commercial banks incorporated under
the laws of the United States of America, any state thereof, the District of
Columbia, Canada or any province or territory thereof, provided that such
commercial bank has, at the time of the Company's or such Restricted
Subsidiary's Investment therein, (1) capital, surplus and undivided profits (as
of the date of such institution's most recently published financial statements)
in excess of $100 million and (2) the long-term unsecured debt obligations
(other than such obligations rated on the basis of the credit of a Person other
than such institution) of such institution, at the time of the Company's or any
Restricted Subsidiary's Investment therein, are rated in the highest rating
category of both S&P and Xxxxx'x; (H) with respect to any Foreign Subsidiary
having its principal operations in Mexico only, (i) Certificados de la Tesoreria
de la Federacion (Cetes), Bonos de Desarrollo del Gobierno Federal (Bondes) or
Bonos Adjustables del Gobierno Federal (Adjustabonos), in each case, issued by
the Mexican government; and (ii) any other instruments issued or guaranteed by
the Mexican government and denominated and payable in pesos; provided, that, in
each case, such investments under this clause (H) are made in the ordinary
course of business for cash management purposes; and (I) to the extent not
otherwise included herein, Cash Equivalents. In the event that either S&P or
Xxxxx'x ceases to publish ratings of the type provided herein, a replacement
rating agency shall be selected by the Company with the consent of the Trustee,
and in each case the rating of such replacement rating agency most nearly
equivalent to the corresponding S&P or Xxxxx'x rating, as the case may be, shall
be used for purposes hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) and the rules and regulations thereunder, as in effect on
the date on which this Indenture is qualified under the TIA (except as provided
in Sections 9.1(e) and 9.3 hereof).
"Trade Payables" of any Person means accounts payable or any
other indebtedness or monetary obligations to trade creditors created, assumed
or guaranteed by such Person or any of its Subsidiaries in the ordinary course
of business in connection with the obtaining of materials or services.
"Transfer Restricted Securities" means securities that bear or
are required to bear the legend set forth in Section 2.6(i)(i) hereof.
"Treasury Rate" means the yield to maturity at the time of
computation of U.S. Treasury securities with a constant maturity (as compiled
and published in the most recent Federal Reserve Release H 15 (519) which has
become publicly available at least two Business Days prior to the Change of
Control Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) closest to the period
from the Change of Control Redemption Date to February 1, 2008; provided,
however, that if the period from the Change of Control Redemption Date to
February 1, 2008 is not equal to the constant maturity of a U.S. Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of one
year) from the weekly average yields of U.S. Treasury securities for which such
yields are given, except that if the period from the Change of Control
Redemption Date to February 1, 2008 is less than one year, the weekly average
yield on actually traded U.S. Treasury securities adjusted to a constant
maturity of one year shall be used.
17
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means, until such time as any of the
following shall be designated as a Restricted Subsidiary of the Company by the
Board of Directors as provided in and in compliance with the definition of
"Restricted Subsidiary," (i) each of the Existing Unrestricted Subsidiaries,
(ii) any Subsidiary of the Company or of a Restricted Subsidiary of the Company
organized or acquired after the Start Date that is designated concurrently with
its organization or acquisition as an Unrestricted Subsidiary by resolution of
the Board of Directors, (iii) any Subsidiary of any Unrestricted Subsidiary, and
(iv) any Restricted Subsidiary of the Company that is designated as an
Unrestricted Subsidiary by resolution of the Board of Directors, provided that,
(A) immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be continuing and (B) any such designation shall
be deemed, at the election of the Company at the time of such designation, to be
either (but not both) (x) the making of a Restricted Payment at the time of such
designation in an amount equal to the Investment in such Subsidiary subject to
the restrictions contained in Section 4.7 or (y) the making of an Asset
Disposition at the time of such designation in an amount equal to the Investment
in such Subsidiary subject to the restrictions contained in Section 4.10. The
Company shall evidence any designation pursuant to clause (ii) or (iv) of the
immediately preceding sentence to the Trustee by filing with the Trustee within
45 days of such designation an Officer's Certificate certifying that such
designation has been made and, in the case of clause (iv), the related election
of the Company in respect thereof.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the timely 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 timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of America
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act), as custodian, with respect to
any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository 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 depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
"Voting Stock" of any Person means Capital Stock of a Person
which ordinarily has voting power for the election of directors, or Persons
performing similar functions, of a Person, whether at all times or only so long
as no senior class of securities has voting power by reason of any contingency.
"Weighted Average Life" means, as of any date, with respect to
any debt security, the quotient obtained by dividing (i) the sum of the products
of the number of years from such date to the dates of each successive scheduled
principal payment (including any sinking fund
18
payment requirements) of such debt security multiplied by the amount of such
principal payment, by (ii) the sum of all such principal payments.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
of such Person all of whose Capital Stock with voting power under ordinary
circumstances to elect directors (or Persons having similar or corresponding
powers and responsibilities), other than directors' qualifying shares if
required by applicable law, is owned by such Person (either directly or
indirectly through Wholly Owned Subsidiaries).
Section 1.2. Other Definitions.
Defined in
Term Section
------------------------------------------------------------- ---------------
"Affiliate Transaction"...................................... 4.11
"Change of Control Offer".................................... 4.14(b)
"Change of Control Offer Price".............................. 4.14(b)
"Change of Control Purchase Date"............................ 4.14(b)
"Change of Control Redemption Date" ......................... 4.14(a)
"Covenant Defeasance"........................................ 8.3
"Discharge".................................................. 8.5
"DTC"........................................................ 2.1(b)
"DTC Participants"........................................... 2.1(b)
"Event of Default"........................................... 6.1
"Fair Market Value".......................................... 1.1 ("Asset Disposition")
"Incurrence"................................................. 4.9(a)
"Legal Defeasance"........................................... 8.2
"Net Proceeds Offer"......................................... 4.10(a)
"Net Proceeds Offer Amount".................................. 4.10(a)
"Net Proceeds Offer Price"................................... 4.10(a)
"Net Proceeds Purchase Date"................................. 4.10(a)
"Other Consideration"........................................ 4.10(f)
"Pari Passu Offer"........................................... 4.10(b)
"Pari Passu Offer Amount".................................... 4.10(b)
"Paying Agent"............................................... 2.3
"Payment Blockage Notice".................................... 10.3
"Refinancing Indebtedness"................................... 4.9(a)
"Register"................................................... 2.3
"Registrar".................................................. 2.3
"Restricted Payments"........................................ 4.7(a)
"SEC"........................................................ 1.1 ("Commission")
"75% Test"................................................... 4.10(a)
"Surviving Entity"........................................... 5.1
"Transaction Value".......................................... 4.10(f)
19
Section 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.4. Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and in the
plural include the singular;
(e) provisions apply to successive events and transactions;
(f) references to sections of or rules under the Exchange Act
or the Securities Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC from time
to time; and
(g) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole (as amended or supplemented from time to
time) and not to any particular Article, Section or other subdivision.
20
ARTICLE 2
THE NOTES
Section 2.1. Form and Dating.
(a) General Form of Notes. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
hereto, which Exhibit is part of this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange rule or usage. Each Note
shall be dated the date of its authentication. The Notes shall be in minimum
denominations of $1000 and integral multiples thereof. The terms and provisions
contained in the Notes shall constitute, and are hereby expressly made, a part
of this Indenture and the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Notes offered and sold to Qualified Institutional Buyers in
reliance on Rule 144A under the Securities Act will initially be issued only in
the form of one or more permanent global Notes in definitive, fully registered
form without interest coupons (each a "Restricted Global Note"). Restricted
Global Notes shall be substantially in the form of Exhibit A attached hereto
(including the text and schedule called for by footnotes 1, 3 and 4 thereto).
Notes offered and sold outside the United States in reliance on Regulation S
under the Securities Act will initially be issued only in the form of one or
more permanent global Notes in definitive, fully registered form without
interest coupons (each a "Regulation S Global Note"; together with Restricted
Global Notes, the "Global Notes"). Regulation S Global Notes shall be
substantially in the form of Exhibit A attached hereto (including the text and
schedule called for by footnotes 1, 3 and 4 thereto). Notes offered and sold in
reliance on any other exemption from registration under the Securities Act will
be issued only in the form of Definitive Notes. Definitive Notes shall be
substantially in the form of Exhibit A attached hereto (excluding the text and
schedule called for by footnotes 1, 3 and 4 thereto). The Global Notes or
Definitive Notes issued as Exchange Notes will not include the legend called for
by footnote 2 of Exhibit A.
(b) Form of Global Notes. (A) Each Restricted Global Note (i)
shall represent such portion of the outstanding Notes as shall be specified
therein, (ii) shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be reduced
or increased, as appropriate, to reflect exchanges and redemptions, (iii) shall
be registered in the name of the Depositary or its nominee, duly executed by the
Company and authenticated by the Trustee as provided herein, for credit to the
respective accounts of the Holders (or such accounts as they may direct) at the
Depositary, (iv) shall be delivered by the Trustee or its Agent to the
Depositary or a Note Custodian pursuant to the Depositary's instructions and (v)
shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a
New York
corporation ("DTC"), to the Company or its agent for
registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co or
to such other entity as is requested by an authorized
representative
21
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein."
(B) Each Regulation S Global Note (i) shall represent such
portion of the outstanding Notes as shall be specified therein, (ii) shall
provide that it shall represent the aggregate amount of outstanding Notes from
time to time endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions, (iii) shall be registered in
the name of the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as provided herein, for credit to the accounts of
the designated agents of Euroclear and Clearstream, (iv) shall be delivered by
the Trustee or its Agent to the Depositary or a Note Custodian pursuant to the
Depositary's instructions and (v) shall bear a legend substantially to the
following effect:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Company or its agent for
registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co or
to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein."
Prior to the 40th day after the Closing Date (the "Restricted Period"),
beneficial interests in the Regulation S Global Note may only be held through
Euroclear or Clearstream, and any resale or transfer of such interests to U.S.
persons shall not be permitted during such period unless such resale or transfer
is made pursuant to Rule 144A or Regulation S.......
(C) Members of, or participants in, the Depositary ("DTC
Participants") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary, and the Depositary may be
treated by the Company, the Trustee, and any agent of the Company or the Trustee
as the absolute owner of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished to the Depositary
or impair, as between the Depositary and its agent members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.
Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.6 hereof.
(c) Form of Definitive Notes. Definitive Notes may be produced
in any manner determined by the Officers of the Company executing such Notes, as
evidenced by their
22
execution of such Notes. The Trustee must register Definitive Notes so issued in
the name of, and cause the same to be delivered to, such Person (or its
nominee). Subject to the provisions of Section 2.6, any Person having a
beneficial interest in the Restricted Global Note may exchange such beneficial
interest, upon request to the Trustee, for fully certificated Definitive Notes
in duly registered form.
(d) Provisions Applicable to Forms of Notes. The Notes may
also have such additional provisions, omissions, variations or substitutions as
are not inconsistent with the provisions of this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with this Indenture,
any Applicable Law or with any rules made pursuant thereto or with the rules of
any securities exchange or governmental agency or as may be determined
consistently herewith by the Officer of the Company executing such Notes, as
conclusively evidenced by their execution of such Notes. All Notes shall be
otherwise substantially identical except as provided herein.
Subject to the provisions of this Article 2, a registered
Holder of a beneficial interest in a Global Note may grant proxies and otherwise
authorize any Person to take any action that a Holder is entitled to take under
this Indenture or the Notes.
Section 2.2. Execution and Authentication.
An Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal may be reproduced on the Notes and may
be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid or obligatory for any purpose or
entitled to the benefits of this Indenture until authenticated by the manual
signature of the Trustee or its authenticating agent. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original
issue up to an initial maximum aggregate principal amount of $150,000,000, (ii)
Additional Notes and (iii) Exchange Notes (x) in exchange for a like principal
amount of Initial Notes or (y) in exchange for a like principal amount of
Additional Notes in each case upon the delivery to the Trustee of a written
order of the Company signed by Two Officers.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
23
Section 2.3. Trustee, Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register ("Register") of the Notes and of their transfer
and exchange. The Company may also from time to time appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar upon notice
to the Holders. The Company shall notify the Trustee in writing of the name and
address of any Agent not a party to this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act, subject to the last paragraph of this Section 2.3, as such. The
Company or any of its Subsidiaries may act as Paying Agent or Registrar;
provided, however, that none of the Company, its Subsidiaries or the Affiliates
of the foregoing shall act (i) as Paying Agent in connection with redemptions,
offers to purchase, discharges and defeasance, as otherwise specified in this
Indenture, and (ii) as Paying Agent or Registrar if a Default or Event of
Default has occurred and is continuing.
The Company hereby appoints The Bank of New York Trust Company
of Florida, N.A., at its Corporate Trust Office, as the Trustee hereunder and
The Bank of New York Trust Company of Florida, N.A. hereby accepts such
appointment. The Trustee shall have the powers and authority granted to and
conferred upon it in the Notes and hereby and such further powers and authority
to act on behalf of the Company as may be mutually agreed upon by the Company
and the Trustee, and the Trustee shall keep a copy of this Indenture available
for inspection during normal business hours at its Corporate Trust Office.
The Company initially appoints DTC to act as Depositary with
respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
All of the terms and provisions with respect to such powers
and authority contained in the Notes are subject to and governed by the terms
and provisions hereof.
The Trustee may resign as Registrar or Paying Agent upon 30
days prior written notice to the Company.
Section 2.4. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, or premium, if any, or interest on, the Notes, and
shall notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay
24
all money held by it to the Trustee. Upon payment of all such money over to the
Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
Section 2.5. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable to it the most recent list available to it of the names
and addresses of all Holders and, after the consummation of the Exchange Offer,
shall otherwise strictly comply with TIA Section 312(a). If the Trustee is not
the Registrar, the Company shall furnish to the Trustee at least seven Business
Days before each Interest Payment Date, and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may require of the names and addresses of the Holders of Notes and, after the
consummation of the Exchange Offer, the Company shall otherwise strictly comply
with TIA Section 312(a).
Section 2.6. Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. If Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other
authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by such
Holder's attorney, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be
accompanied by the following additional information
and documents, as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder
for registration in the name of such Holder,
without transfer, a certification to that
effect from such Holder (in substantially
the form of Exhibit B hereto); or
25
(B) if such Transfer Restricted Security is
being transferred to a "qualified
institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance
with Rule 144A under the Securities Act or
pursuant to an exemption from registration
in accordance with Rule 144 or Rule 904
under the Securities Act or pursuant to an
effective registration statement under the
Securities Act, a certification to that
effect from such Holder (in substantially
the form of Exhibit B hereto); or
(C) if such Transfer Restricted Security is
being transferred in reliance on another
exemption from the registration requirements
of the Securities Act, a certification to
that effect from such Holder (in
substantially the form of Exhibit B hereto)
and an opinion of legal counsel from such
Holder or the transferee reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act.
(b) Restrictions on Transfer of a Definitive Note for a
Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for
a beneficial interest in a Global Note except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive Note,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(i) if such Definitive Note is a Transfer Restricted
Security, a certification from the Holder thereof (in
substantially the form of Exhibit B hereto) to the
effect that such beneficial interest is being
transferred to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act or
pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the
Securities Act; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Security, written instructions from the
Holder thereof directing the Trustee to make, or to
direct the Note Custodian to make, an endorsement on
the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented
by the Global Note,
in which case the Trustee or its agent shall cancel such Definitive Note in
accordance with Section 2.11 hereof and cause, or direct the Note Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the Note Custodian, the aggregate principal amount of
Notes represented by the Global Note to be increased accordingly. If no Global
Notes are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of a Beneficial Interest in a Global
Note. The transfer and exchange of beneficial interests in Global Notes shall be
effected through the
26
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
Notwithstanding the foregoing, in the case of a Transfer Restricted Security, a
beneficial interest in a Global Note being transferred in reliance on an
exemption from the registration requirements of the Securities Act (other than
in accordance with Rule 144A, Rule 144 or Rule 904 under the Securities Act) may
only be transferred for a Definitive Note and pursuant to the provisions of
Section 2.6(d) below.
(d) Transfer and Exchange of a Beneficial Interest in a Global
Note for a Definitive Note.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial
interest for a Definitive Note. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depositary, from
the Depositary or its nominee on behalf of any Person
having a beneficial interest in a Global Note, and,
in the case of a Transfer Restricted Security, the
following additional information and documents (all
of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification to that effect from such
Person (in substantially the form of Exhibit
B hereto); or
(B) if such beneficial interest is being
transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A
under the Securities Act or pursuant to an
exemption from registration in accordance
with Rule 144 or Rule 904 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from the
transferor (in substantially the form of
Exhibit B hereto); or
(C) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that
effect from the transferor (in substantially
the form of Exhibit B hereto) and an opinion
of legal counsel from the transferee or
transferor reasonably acceptable to the
Company and to the Registrar to the effect
that such transfer is in compliance with the
Securities Act,
in which case the Trustee or the Note Custodian, at
the direction of the Trustee, shall, in accordance
with the standing instructions and procedures
existing between the Depositary and the Note
Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following
such reduction, the Company shall execute and, upon
receipt of an authentication order in accordance with
Section 2.2 hereof,
27
the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate
principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section
2.6(d) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant
to instructions from its direct or indirect
participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive
Notes to the Persons in whose names such Notes are so
registered.
(e) Transfer from Restricted Global Note to Regulation S
Global Note. If a holder of a beneficial interest in the Restricted Global Note
deposited with DTC wishes at any time to exchange its interest in such
Restricted Global Note for an interest in the Regulation S Global Note, or to
transfer its interest in such Restricted Global Note to a Person who wishes to
take delivery thereof in the form of an interest in such Regulation S Global
Note, such holder may, subject to the rules and procedures of DTC and to the
requirements set forth in the following sentence, exchange or cause the exchange
or transfer or cause the transfer of such interest for an equivalent beneficial
interest in such Regulation S Global Note. Upon receipt by the Trustee, as
Transfer Agent, at its office in The City of New York of (1) instructions given
in accordance with DTC's procedures from or on behalf of a holder of a
beneficial interest in the Restricted Global Note, directing the Trustee (via
DWAC), as Transfer Agent, to credit or cause to be credited a beneficial
interest in the Regulation S Global Note in an amount equal to the beneficial
interest in the Restricted Global Note to be exchanged or transferred, (2) a
written order given in accordance with DTC's procedures containing information
regarding the Euroclear or Clearstream account to be credited with such increase
and the name of such account, and (3) a certificate in the form of Exhibit C
given by the holder of such beneficial interest stating that the exchange or
transfer of such interest has been made pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S or Rule 144 under the Securities Act, the
Trustee, as Transfer Agent, shall promptly deliver appropriate instructions to
DTC (via DWAC), its nominee, or the custodian for DTC, as the case may be, to
reduce or reflect on its records a reduction of the Restricted Global Note by
the aggregate principal amount of the beneficial interest in such Restricted
Global Note to be so exchanged or transferred from the relevant participant, and
the Trustee, as Transfer Agent, shall promptly deliver appropriate instructions
(via DWAC) to DTC, its nominee, or the custodian for DTC, as the case may be,
concurrently with such reduction, to increase or reflect on its records an
increase of the principal amount of such Regulation S Global Note by the
aggregate principal amount of the beneficial interest in such Restricted Global
Note to be so exchanged or transferred, and to credit or cause to be credited to
the account of the Person specified in such instructions (who shall be the agent
member of Euroclear or Clearstream, or both, as the case may be) a beneficial
interest in such Regulation S Global Note equal to the reduction in the
principal amount of such Restricted Global Note.
(f) Transfer from Regulation S Global Note to Restricted
Global Note. If a holder of a beneficial interest in the Regulation S Global
Note wishes at any time to exchange its interest in such Regulation S Global
Note for an interest in the Restricted Global Note, or to transfer its interest
in such Regulation S Global Note to a Person who wishes to take delivery thereof
in the form of an interest in such Restricted Global Note, such holder may,
subject to the
28
rules and procedures of Euroclear or Clearstream and DTC, as the case may be,
and to the requirements set forth in the following sentence, exchange or cause
the exchange or transfer or cause the transfer of such interest for an
equivalent beneficial interest in such Restricted Global Note. Upon receipt by
the Trustee, as Transfer Agent, at its office in The City of New York of (l)
instructions given in accordance with the procedures of Euroclear or Clearstream
and DTC, as the case may be, from or on behalf of a beneficial owner of an
interest in the Regulation S Global Note directing the Trustee, as Transfer
Agent, to credit or cause to be credited a beneficial interest in the Restricted
Global Note in an amount equal to the beneficial interest in the Regulation S
Global Note to be exchanged or transferred, (2) a written order given in
accordance with the procedures of Euroclear or Clearstream and DTC, as the case
may be, containing information regarding the account with DTC to be credited
with such increase and the name of such account, and (3) prior to the expiration
of the Restricted Period, a certificate in the form of Exhibit D given by the
holder of such beneficial interest and stating that the Person transferring such
interest in such Regulation S Global Note reasonably believes that the Person
acquiring such interest in such Restricted Global Note is a Qualified
Institutional Buyer (as defined in Rule 144A) and is obtaining such beneficial
interest in a transaction meeting the requirements of Rule 144A and any
applicable securities laws of any state of the United States or any other
jurisdiction, the Trustee, as Transfer Agent, shall promptly deliver (via DWAC)
appropriate instructions to DTC, its nominee, or the custodian for DTC, as the
case may be, to reduce or reflect on its records a reduction of the Regulation S
Global Note by the aggregate principal amount of the beneficial interest in such
Regulation S Global Note to be exchanged or transferred, and the Trustee, as
Transfer Agent, shall promptly deliver (via DWAC) appropriate instructions to
DTC, its nominee, or the custodian for DTC, as the case may be, concurrently
with such reduction, to increase or reflect on its records an increase of the
principal amount of such Restricted Global Note by the aggregate principal
amount of the beneficial interest in such Regulation S Global Note to be so
exchanged or transferred, and to credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in such
Restricted Global Note equal to the reduction in the principal amount of such
Regulation S Global Note. After the expiration of the Restricted Period, the
certification requirement set forth in clause (3) of the second sentence of this
Section 2.6(f) will no longer apply to such transfers.
(g) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
(h) Authentication of Definitive Notes in Absence of
Depositary. If at any time:
(i) the Depositary for the Notes notifies the Company
that the Depositary is unwilling or unable to
continue as Depositary for the Global Notes or, if at
any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act, and a
successor Depositary for the Global Notes is not
appointed by the Company within 90 days after
delivery of such notice; or
29
(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the
issuance of Definitive Notes under this Indenture in
exchange for all or any part of the Notes represented
by a Global Note or Global Notes,
the Depositary or the Note Custodian shall surrender such Global Note to the
Trustee, without charge, and then the Company shall execute, and the Trustee
shall, upon receipt of an authentication order in accordance with Section 2.2
hereof, authenticate and deliver in exchange for such Global Notes, Definitive
Notes in an aggregate principal amount equal to the principal amount of such
Global Notes. Such Definitive Notes shall be registered in such names as the
Depositary shall direct in writing.
(i) Legends.
(i) Except as permitted by the following paragraphs (ii),
and (iii), each Note certificate evidencing Global
Notes and Definitive Notes (and all Notes issued in
exchange therefor or substitution thereof) shall bear
legends in substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR OTHER SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO
RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS
PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR
ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER
OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY
PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH
THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE)
AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED
BY APPLICABLE LAW (THE "RESALE RESTRICTION
TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY, (B)
30
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR
SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS AND
SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES
THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE
AND THE REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE
(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (II) IN EACH OF THE
FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
THIS NOTE IS COMPLETED AND DELIVERED BY THIS
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144
under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Definitive Note that does not bear the
legend set forth in (i) above and rescind
any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
31
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.6(c) hereof;
provided, however, that with respect to any
request for an exchange of a Transfer
Restricted Security that is represented by a
Global Note for a Definitive Note that does
not bear the legend set forth in (i) above,
which request is made in reliance upon Rule
144, the Holder thereof shall certify in
writing to the Registrar that such request
is being made pursuant to Rule 144 (such
certification to be substantially in the
form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of
the Exchange Offer, the Company shall issue and, upon
receipt of an authentication order in accordance with
Section 2.2 hereof, the Trustee shall authenticate
Series B Notes in exchange for Series A Notes
accepted for exchange in the Exchange Offer, which
Series B Notes shall not bear the legend set forth in
(i) above, and the Registrar shall rescind any
restriction on the transfer of such Notes, in each
case unless the Holder of such Series A Notes is
either (A) a broker-dealer, (B) a Person
participating in the distribution of the Series A
Notes or (C) a Person who is an affiliate (as defined
in Rule 144A) of the Company.
(j) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, all Global Notes shall be
returned to or retained and cancelled by the Trustee or its agent in accordance
with Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for Definitive Notes,
redeemed, repurchased or cancelled, the principal amount of Notes represented by
such Global Note shall be reduced accordingly and an endorsement shall be made
on such Global Note, by the Trustee or the Notes Custodian, at the direction of
the Trustee, to reflect such reduction.
(k) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.2, 2.10,
3.6, 3.7, 4.10, 4.14 and 9.5 hereto).
(iii) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations
of the Company, evidencing the same debt, and
entitled to the
32
same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(iv) Neither the Registrar nor the Company shall be
required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at
the opening of business 15 Business Days
before the day of any selection of Notes for
redemption under Section 3.2 hereof and
ending at the close of business on the day
of selection; or
(B) to register the transfer of or to exchange
any Note so selected for redemption in whole
or in part, except the unredeemed portion of
any Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next
succeeding Interest Payment Date.
(v) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.2 hereof.
(l) Certain Transfers in Connection with and after the
Exchange Offer. Notwithstanding any other provision of this Indenture: (i) no
Series B Note may be exchanged by the Holder thereof for a Series A Note; (ii)
accrued and unpaid interest on the Series A Notes being exchanged in the
Exchange Offer shall be due and payable on the next Interest Payment Date for
the Series B Notes following the Exchange Offer; and (iii) interest on the
Series B Notes to be issued in the Exchange Offer shall accrue from the date of
the Exchange Offer.
Section 2.7. Replacement Notes.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall, upon the written
request of the Holder thereof, issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by such Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
33
The provisions of this Section 2.7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.8. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it (or its agent),
those delivered to it (or its agent) for cancellation, those reductions in the
interest in a Global Note effected by the Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.
Except as set forth in Section 2.9 hereof, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note (other than a mutilated Note surrendered for replacement)
is held by a bona fide purchaser (as such term is defined in Section 8-302 of
the Uniform Commercial Code as in effect in the State of New York).
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of any thereof) holds, on a redemption date or maturity date, Cash
or Cash Equivalents sufficient to pay Notes payable on that date, then on and
after that date such Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest.
Section 2.9. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee has actual knowledge are so owned shall be so disregarded.
Section 2.10. Temporary Notes.
In lieu of formal printed definitive Notes, or until such
definitive Notes are ready for delivery, the Company may prepare and the Trustee
shall authenticate temporary Notes upon a written order of the Company signed by
two Officers of the Company. Temporary Notes shall be substantially in the form
of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee.
34
At the Company's election, the Company may prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes.
Unless and until such exchange, Holders of temporary Notes
shall be entitled to all of the benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee or
its Agent for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee (or its Agent) and no one else shall cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company, upon written request, from
time to time. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee (or its Agent) for cancellation.
If the Company acquires any of the Notes, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such Notes
unless and until the same are surrendered to the Trustee (or its Agent) for
cancellation pursuant to this Section 2.11.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.1 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date; provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such defaulted interest to be paid.
Section 2.13. Persons Deemed Owners.
Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent, the Company and any agent of the foregoing
shall deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for all purposes (including the purpose of receiving
payment of principal of and interest on such Notes; provided
35
that defaulted interest shall be paid as set forth in Section 2.12), and none of
the Trustee, any Agent, the Company or any agent of the foregoing shall be
affected by notice to the contrary.
Section 2.14. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will print CUSIP numbers
on the Notes, and the Trustee may use CUSIP numbers in notices of redemption and
purchase as a convenience to Holders; provided, however, that any such notices
may state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of redemption or
purchase and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption or purchase shall not
affected by any defect or omission in such numbers.
Section 2.15. Issuance of Additional Notes
The Company shall be entitled, subject to its compliance with
Section 4.9, to issue Additional Notes under this Indenture. Additional Notes
shall have identical terms as the Initial Notes or the Exchange Notes, other
than with respect to the date of issuance and issue price. The Initial Notes,
any Additional Notes and all Exchange Notes shall be treated as a single class
for all purposes under this Indenture.
With respect to any issuance of Additional Notes, the Company
shall deliver to the Trustee a resolution of the Board of Directors and an
Officers' Certificate, and, if the Company elects, a supplemental indenture,
which shall together provide the following information:
(1) the aggregate principal amount of Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(2) the issue price and the issue date of such Additional
Notes; and
(3) whether such Additional Securities shall be Transfer
Restricted Securities and issued in the form of Series A Notes or shall be
issued in the form of Series B Notes.
In addition, the Officers' Certificate shall certify that such
issuance is in compliance with Section 4.9 of this Indenture.
36
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date (unless a
shorter period is acceptable to the Trustee), an Officers' Certificate setting
forth (i) the clause of Section 3.7 pursuant to which the redemption shall
occur, (ii) the redemption date, (iii) the principal amount of Notes to be
redeemed, (iv) the redemption price and accrued and unpaid interest and (v)
whether it requests the Trustee to give notice of such redemption. Any such
notice may be cancelled at any time prior to the mailing of notice of such
redemption to any Holder and shall thereby be void and of no effect.
Section 3.2. Selection of Notes to Be Redeemed.
If fewer than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of any applicable Depositary and securities
exchange requirements or, if the Notes are not so listed, on a pro rata basis,
by lot or in accordance with any other method the Trustee considers fair and
appropriate and in such manner as complies with any such requirements and any
applicable legal requirements; provided that no Notes of $1,000 principal amount
or less shall be redeemed in part. In the event of partial redemption by lot,
the particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by
the Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at such
Holder's registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
37
(b) the redemption price and accrued and unpaid interest;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date and the only remaining right of
the Holders of such Notes is to receive payment of the redemption price
upon surrender to the Paying Agent of the Notes redeemed;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 40 days prior to the
redemption date (unless a shorter period is acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.4. Effect of Notice of Redemption.
Unless otherwise stated therein, once notice of redemption is
mailed in accordance with Section 3.3 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the redemption price.
Section 3.5. Deposit of Redemption Price.
On or prior to the redemption date, the Company shall deposit
with the Paying Agent (other than the Company or any of its Subsidiaries) money
sufficient in same day funds to pay the redemption price of and accrued interest
on all Notes to be redeemed on that date. The Paying Agent shall promptly return
to the Company any money deposited with the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed. If the money is deposited on the
redemption date, such deposit shall be made by 10:00 a.m. Dallas, Texas time.
38
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption whether or not such
Notes are presented for payment, and the only remaining right of the Holders of
such Notes shall be to receive payment of the redemption price upon surrender to
the Paying Agent of the Notes redeemed. If a Note is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal from the redemption date until such
principal is paid and to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate provided in the Notes and in Section
4.1 hereof.
Section 3.6. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
Section 3.7. Optional Redemption.
(a) Except as set forth in clause (b) or (c) of this Section
3.7, the Company shall not have the option to redeem the Notes pursuant to this
Section 3.7 prior to February 1, 2008. Thereafter, the Notes will be redeemable
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 calendar days' prior notice, at the redemption prices (expressed as
percentages of the principal amount) set forth below plus accrued and unpaid
interest thereon to the applicable redemption date, if redeemed during the
twelve month period beginning on February 1 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2008 104.500%
2009 103.000%
2010 101.500%
2011 and thereafter 100.000%
(b) Notwithstanding the foregoing, prior to February 1, 2006,
the Company may redeem up to 35% of the aggregate principal amount of the Notes
(including any Additional Notes) originally outstanding at a redemption price of
109.000% of the principal amount thereof, plus accrued and unpaid interest
thereon to the redemption date, with the net proceeds of one or more Equity
Offerings of the Company or, if applicable, a Parent; provided that at least 65%
of the aggregate principal amount of the Notes (excluding any Additional Notes)
originally issued remains outstanding immediately after the occurrence of such
redemption (but such unredeemed Notes may be redeemed pursuant to the optional
redemption procedure described in Section
39
3.7(a)); and provided, further, that such notice of redemption shall be given
not later than 30 days, and such redemption shall occur not later than 90 days,
after the date of the closing of any such Equity Offering.
(c) The Company may redeem the Notes under certain
circumstances upon the occurrence of a Change of Control pursuant to Section
4.14(a).
(d) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.14 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Notes.
ARTICLE 4
COVENANTS
Section 4.1. Payment of Notes.
The Company shall pay or cause to be paid in New York, New
York, the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City
time on the due date money deposited by the Company in same day funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Paying Agent shall return to the Company, no later than
three Business Days following the date of payment, any money (including accrued
interest) in excess of the amounts paid on the Notes.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at a
rate equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law to the extent that such
interest is an allowed claim against the debtor under such Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.2. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency (which may be an office of the Trustee or
an affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and
40
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in accordance with
Section 2.3.
Section 4.3. Provisions of Reports and Other Information.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Notes are outstanding, the Company will furnish
to the Trustee and the Holders of Notes (i) all quarterly and annual financial
information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial position and results of
operations of the Company and its Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such reports. In
addition, whether or not required by the rules and regulations of the
Commission, the Company will file a copy of all such information and reports
with the Commission for public availability (unless the Commission will not
accept such a filing) and make such information available to prospective
investors upon request. The Company shall include an unaudited consolidating
balance sheet and related statements of income and cash flows for the Company
and its Subsidiaries, separately identifying the Company and its Restricted
Subsidiaries as one group and the Company's Unrestricted Subsidiaries as a
separate group, in all reports containing the consolidated financial statements
(which in the case of annual reports shall be audited) of the Company and its
consolidated Subsidiaries which are required to be delivered by the Company to
the Securityholders pursuant to this Section 4.3, including the Company's Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q. If required by the
terms thereof, the Company shall also comply with the provisions of TIA Section
314(a).
(b) So long as any of the Transfer Restricted Securities
remain outstanding, the Company shall furnish to the Holders of the Transfer
Restricted Securities and to prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
41
(c) If the Company instructs the Trustee to distribute any of
the documents described in Section 4.3(a) to the Holders, the Company shall
provide the Trustee with a sufficient number of copies of all such documents
that the Company may be required to deliver to such Holders.
Section 4.4. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 45 days
after the end of each of the first three fiscal quarters of each year, and
within 90 days after the end of the last fiscal quarter of each year, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal quarter, or fiscal year, as
appropriate, has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, 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 that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, or
interest on, the Notes are prohibited or, if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.3 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 4 or Article 5 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.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.5. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except (i) such as are contested in good faith and by
appropriate proceedings, or (ii) such as for which reserve or other
42
appropriate provision, if any, as shall be required to be in conformity with
GAAP, has been made therefor, or (iii) where the failure to effect such payment
is not adverse in any material respect to the Holders of the Notes.
Section 4.6. Stay, Extension and Usury Laws.
Each of the Company and each of the Guarantors covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and each of the Company and each of the Guarantors (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.7. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of the
Restricted Subsidiaries of the Company to, directly or indirectly: (i) declare
or pay any dividend on, or make any distribution to the holders of, any Capital
Stock of the Company or a Restricted Subsidiary, other than dividends or
distributions (A) from a Restricted Subsidiary of the Company to the Company or
to a Restricted Subsidiary or (B) payable in Capital Stock of the Company that
is not Disqualified Stock; (ii) repay, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or any of its Subsidiaries (other than
Wholly Owned Subsidiaries of the Company that are Restricted Subsidiaries),
other than a Permitted Investment; (iii) prepay, repay, redeem, defease or
otherwise acquire or retire for value prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Indebtedness that is
subordinated in right of payment to the Notes or any Subsidiary Guarantee, other
than a Permitted Investment and except (A) as permitted pursuant to clause (vii)
of Section 4.9(b), and (B) upon a change of control, as defined in and to the
extent required by the indenture or other agreement or instrument pursuant to
which such subordinated Indebtedness was issued, provided the Company is then in
compliance with the provisions of Section 4.14; or (iv) make any Investment
other than a Permitted Investment or as permitted under clauses (ii) and (iii)
above (the foregoing actions set forth in clauses (i) through (iv) being
referred to hereinafter as "Restricted Payments"), if at the time of any such
Restricted Payment, and after giving effect thereto on a pro forma basis:
(A) a Default or an Event of Default shall have occurred
and be continuing or would result therefrom;
(B) the Company would not be able to incur $1.00 of
additional Indebtedness under Section 4.9(a); or
43
(C) the aggregate amount of all Restricted Payments
declared or made after the Start Date including such
Restricted Payment (the value of any such payment, if
other than cash, shall be the value determined in
good faith by resolution of the Board of Directors)
shall exceed the sum of: (1) 50% of the aggregate
Consolidated Net Income (after deducting from such
Consolidated Net Income accrued but unpaid
compensation expenses related to any stock
appreciation or stock option plans net of tax
benefits), or, in the event such aggregate
Consolidated Net Income shall be a loss, minus 100%
of such loss, of the Company and its Restricted
Subsidiaries earned subsequent to the Start Date to
the end of the fiscal quarter immediately preceding
the date of such Restricted Payment (treated as a
single accounting period), plus (2) the aggregate net
proceeds received by the Company from the issuance or
sale (other than to a Subsidiary of the Company) of
Capital Stock of the Company, including any such
shares issued upon exercise of any warrants, options
or similar rights (other than Disqualified Stock),
subsequent to the Start Date, plus (3) the aggregate
net proceeds received by the Company from the
issuance or sale of Indebtedness that is convertible
into Capital Stock after the Start Date, to the
extent that such Indebtedness is actually converted
into Capital Stock (other than Disqualified Stock),
plus (4) the aggregate net proceeds received after
the Start Date by the Company as capital
contributions to the Company (other than from a
Subsidiary), plus (5) an amount equal to the net
reduction in Investments resulting from payments of
principal of Indebtedness, return of capital and
other transfers of assets, in each case to the
Company or any Restricted Subsidiary of the Company
(but excluding any such amounts included in
Consolidated Net Income), or from designations of
Unrestricted Subsidiaries as Restricted Subsidiaries,
plus (6) $15 million.
(b) The foregoing provisions of this Section 4.7 shall
not prohibit:
(i) the payment of any dividend within 60 calendar days
after the date of its declaration, if the dividend
would have been permitted on the date of declaration;
(ii) the repayment, redemption, acquisition or retirement
for value of any Capital Stock of the Company or any
of its Subsidiaries in exchange for, or out of the
aggregate net proceeds of, a substantially concurrent
issuance (other than to the Company or any of its
Restricted Subsidiaries) of Capital Stock (other than
Disqualified Stock) of the Company or a Restricted
Subsidiary of the Company;
(iii) the prepayment, repayment, redemption, defeasance or
other acquisition or retirement for value prior to
any scheduled maturity, scheduled repayment or
scheduled sinking fund payment of any Indebtedness
that is subordinated in right of payment to the Notes
or any Subsidiary Guarantee, in exchange for, or out
of the aggregate net proceeds of, a
44
substantially concurrent issuance (other than to the
Company or a Restricted Subsidiary) of Capital Stock
(other than Disqualified Stock) of the Company or a
Restricted Subsidiary of the Company;
(iv) the prepayment, repayment, redemption, defeasance or
other acquisition or retirement for value prior to
any scheduled maturity, scheduled repayment or
scheduled sinking fund payment of any Indebtedness
that is subordinated in right of payment to the Notes
or any Subsidiary Guarantee, in exchange for, or out
of the aggregate net proceeds of, a substantially
concurrent issuance (other than to the Company or a
Restricted Subsidiary) of Indebtedness of the Company
or a Guarantor that is subordinated in right of
payment to the Notes or any Subsidiary Guarantee, but
only if the Weighted Average Life and period of time
to Stated Maturity of such new Indebtedness are each
greater than the Weighted Average Life and period of
time to Stated Maturity of such retired Indebtedness;
(v) the payment of any dividend or distribution to any
holder of Capital Stock of a Restricted Subsidiary of
the Company, other than a holder that is an Affiliate
of the Company (except a holder that is an Affiliate
of the Company solely by virtue of the ownership of
such Capital Stock), as part of a pro rata dividend
or distribution to all holders of such class or
series of Capital Stock (but only the amount of such
dividend or distribution paid to a Person other than
the Company or a Restricted Subsidiary of the Company
shall constitute a Restricted Payment);
(vi) the payment of any dividend or distribution to any
Parent in an amount required to satisfy any tax
obligation of such Parent with respect to taxes
actually incurred with respect to Parent Subordinated
Indebtedness or with respect to the operations of the
Company and its Subsidiaries; and
(vii) the payment of any dividend or distribution to any
Parent in an amount equal to the ordinary, reasonable
and customary operating expenses of such Parent;
provided such dividend or distribution shall only be
permitted so long as such Parent is a holding company
with no material operations independent of its
ownership interest in the Company and any other
Parent.
For purposes of calculating the aggregate amount of Restricted
Payments made pursuant to Section 4.7(a)(C) above, payments made under this
Section 4.7(b) (other than under clauses (iv), (vi) and (vii) hereof) shall be
included in such amount; provided that dividends paid within 60 calendar days of
the date of declaration shall be deemed to be paid at the date of declaration.
45
Section 4.8. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not permit any of the
Restricted Subsidiaries of the Company to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of such Restricted Subsidiary to (i)
pay dividends or make any other distributions on its Capital Stock, or pay any
Indebtedness owed, to the Company or any of its Restricted Subsidiaries, (ii)
make any Investment in the Company or any of its Restricted Subsidiaries, (iii)
transfer any of its properties or assets to the Company or any of its Restricted
Subsidiaries or (iv) guarantee any Indebtedness of the Company or any of its
Restricted Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (A) applicable law, (B) any instrument governing Acquired
Indebtedness permitted to be incurred under Section 4.9 which encumbrances or
restrictions are not applicable to any Person or the properties or assets of any
Person, other than the Person so acquired or its Subsidiaries, or the property
or assets of the Person so acquired or its Subsidiaries, (C) any restrictions
existing under agreements in effect on the Initial Issuance Date, (D) any
restrictions with respect to a Restricted Subsidiary imposed pursuant to an
agreement which has been entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary;
provided, that such disposition is permitted pursuant to Section 4.10, (E) any
agreement governing Indebtedness otherwise permitted under this Indenture
restricting the sale or other disposition of property securing such Indebtedness
if such agreement does not expressly restrict the ability of a Restricted
Subsidiary to pay dividends or to make distributions, loans or advances, (F) the
issuance of preferred stock by a Restricted Subsidiary or the payment of
dividends thereon in accordance with the terms thereof; provided that issuance
of such preferred stock is permitted pursuant to Section 4.9 and the terms of
such preferred stock do not expressly restrict the ability of a Restricted
Subsidiary to pay dividends or make any other distributions on its Capital Stock
(other than requirements to pay dividends or liquidation preferences on such
preferred stock prior to paying any dividends or making any other distributions
on such other Capital Stock), (G) this Indenture, (H) the Credit Facility and
other Senior Indebtedness, (I) supermajority voting requirements existing under
corporate charters, bylaws, stockholders agreements and the like, (J) in the
case of clause (iii) above, agreements (1) that restrict in a customary manner
the subletting, pledging, assignment or transfer of any property or asset that
is a lease, license, conveyance or contract or similar property or asset, or (2)
existing by virtue of any transfer of, agreement to transfer, option or right
with respect to, or Lien on, any property or assets of the Company or any
Restricted Subsidiary not otherwise prohibited by this Indenture, including,
without limitation, transfer restrictions on any specific properties or assets
that are subject to a sale agreement otherwise permitted pursuant Section 4.10,
(K) existing under any agreement which refinances or replaces any of the
agreements in the preceding clauses; provided, that the terms and conditions of
any such restrictions are not materially less favorable to the Holders than
those contained in the agreements refinanced or replaced or (L) any instrument
governing Indebtedness of the Company that is (1) pari passu with the Notes and
(2) otherwise permitted under this Indenture; provided that the terms and
conditions of any such restrictions are not materially more restrictive than
those contained in this Indenture. Nothing contained in this Section 4.8 shall
prevent the Company or any Restricted Subsidiary from (1) creating, incurring,
assuming or suffering to exist any Liens otherwise permitted under Section 4.12
or (2) restricting the sale or other disposition of property or assets
46
of the Company or any of its Restricted Subsidiaries that secure Indebtedness of
the Company or any of its Restricted Subsidiaries.
Section 4.9. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to, any Indebtedness (collectively, an "incurrence"; with respect to any non
interest bearing or other discount Indebtedness, an "incurrence" shall be deemed
to have occurred only on the date of original issuance thereof), unless, after
giving effect to the incurrence of such Indebtedness and the application of the
net proceeds therefrom, the EBITDA Ratio (as calculated on the Determination
Date) is greater than 2.0 to 1.0; provided that if the Indebtedness which is the
subject of a determination under this provision is Acquired Indebtedness, then
the Consolidated EBITDA of the Company shall be determined by giving effect (on
a pro forma basis, as if the transaction had occurred at the beginning of the
immediately preceding four-quarter period) to both the incurrence or assumption
of such Acquired Indebtedness by the Company and the inclusion in the
Consolidated EBITDA of the Person whose Indebtedness would constitute Acquired
Indebtedness.
(b) Notwithstanding the foregoing, Indebtedness may be
incurred as follows:
(i) Indebtedness under the Credit Facility in an
aggregate principal amount not to exceed $200 million
at any one time outstanding, less the aggregate
amount of all permanent reductions thereto pursuant
to Section 4.10;
(ii) Indebtedness represented by amounts due under Hedging
Obligations (provided that the obligations under such
Hedging Obligations are related to protection against
fluctuations in interest rates, currency exchange
rates, commodity prices or the exchange of nominal
interest obligations, in each case, under specific
contingencies, or minimization of interest rates);
(iii) Indebtedness represented by property, liability and
workers' compensation insurance, performance bonds
(which may be in the form of letters of credit) for
construction contracts let by the Company and its
Restricted Subsidiaries in the ordinary course of
business (provided that to the extent that such
performance bonds secure Indebtedness, such
Indebtedness is otherwise permitted under this
Section 4.9), surety bonds and appeal bonds (which,
in each case, may be in the form of letters of
credit) required in the ordinary course of business
or in connection with the enforcement of rights or
claims of the Company or any Restricted Subsidiary of
the Company or in connection with judgments that do
not result in a Default or an Event of Default;
47
(iv) Indebtedness evidenced by the Notes (other than
Additional Notes), this Indenture, the Senior
Subordinated Notes, the Senior Subordinated
Indentures and any guarantees of any of the
foregoing;
(v) Indebtedness owing to a Wholly Owned Subsidiary of
the Company that is a Restricted Subsidiary or to the
Company;
(vi) Acquired Indebtedness; provided that such
Indebtedness if incurred by the Company would be in
compliance with the first paragraph of this covenant;
(vii) Indebtedness issued in exchange for, or the proceeds
of which are used to repay or refund or refinance or
discharge or otherwise retire for value, Indebtedness
of the Company or any of its Restricted Subsidiaries
permitted under clauses (iv) and (vi) above, clause
(viii) below and Section 4.9(a) ("Refinancing
Indebtedness") in a principal amount not to exceed
the principal amount of the Indebtedness so
refinanced plus any premium and accrued interest plus
customary fees, expenses and costs related to the
incurrence of such Refinancing Indebtedness; provided
that with respect to any Refinancing Indebtedness
which refinances Indebtedness which ranks junior in
right of payment to the Notes, (A) such Refinancing
Indebtedness is subordinated in right of payment at
least to the same extent as the Indebtedness to be
refunded or refinanced if such Indebtedness had
remained outstanding and (B) the Refinancing
Indebtedness has a Weighted Average Life and Stated
Maturity that are equal to or greater than those of
the Indebtedness to be repaid or refunded or
refinanced or discharged or otherwise retired for
value at the time of such incurrence;
(viii) Indebtedness outstanding on the Initial Issuance
Date;
(ix) Indebtedness of the Company or a Restricted
Subsidiary of the Company to an Unrestricted
Subsidiary for money borrowed; provided that such
Indebtedness is subordinated in right of payment to
the Notes and the Weighted Average Life of such
Indebtedness is greater than the Weighted Average
Life of the Notes;
(x) Parent Subordinated Indebtedness;
(xi) Indebtedness in respect of Permitted Capitalized
Leases; and
(xii) other Indebtedness not to exceed $25 million.
48
Section 4.10. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of the
Restricted Subsidiaries of the Company to, make any Asset Disposition, unless
(i) the consideration received from such Asset Disposition is at least equal to
the Fair Market Value of the Capital Stock, property or other assets sold, (ii)
at least 75% of the consideration received from such Asset Disposition is in the
form of cash, Temporary Cash Investments or Marketable Equity Securities (the
"75% Test"); provided that the amount of any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet or in the
notes thereto and other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Subsidiary Guarantee and have a
final stated maturity less than 91 days after February 1, 2013) of the Company
or such Restricted Subsidiary which are assumed by the transferee, cancelled or
satisfied in any Asset Disposition (other than liabilities that are incurred in
connection with or in anticipation of such Asset Disposition) as a credit
against the purchase price therefor shall be deemed to be cash to the extent of
the amount so credited for purposes of the 75% Test, and (iii) the Company
applies, or causes its Restricted Subsidiaries to apply, 100% of the Net
Proceeds from any Asset Disposition to an offer (a "Net Proceeds Offer") to
purchase Notes outstanding having a Net Proceeds Offer Price at least equal to
such Net Proceeds, such Net Proceeds Offer to commence on a date not later than
360 calendar days after the date of such Asset Disposition at a purchase price
(the "Net Proceeds Offer Price") equal to 100% of the principal amount thereof,
plus accrued interest to the closing date of the Net Proceeds Offer (the "Net
Proceeds Purchase Date"), except to the extent that such Net Proceeds have been
applied either to (i) the permanent repayment of principal and interest on
Senior Indebtedness of the Company or a Guarantor or Indebtedness of the
Restricted Subsidiary of the Company that is not a Guarantor that made such
Asset Disposition or to (ii) the purchase of assets or businesses in the same
line of business as the Company and its Restricted Subsidiaries or assets
incidental thereto. Notwithstanding anything to the contrary in this Section
4.10, the Company will not be required to make a Net Proceeds Offer with respect
to any Net Proceeds from Asset Dispositions until the aggregate amount of Net
Proceeds from Asset Dispositions in any period of 12 consecutive months which
are not applied either to the permanent repayment of principal and interest on
Indebtedness (as described above) or to the purchase of assets or businesses (as
described above), exceeds $10 million. For purposes of this Section 4.10, the
principal amount of Notes for which a Net Proceeds Offer shall be made is
referred to as the "Net Proceeds Offer Amount."
(b) To the extent required by any pari passu Indebtedness, and
provided there is a permanent reduction in the principal amount of such pari
passu Indebtedness, the Company shall simultaneously with the Net Proceeds Offer
make an offer to purchase such pari passu Indebtedness (a "Pari Passu Offer") in
an amount (the "Pari Passu Offer Amount") equal to the Net Proceeds Offer
Amount, as determined above, multiplied by a fraction, the numerator of which is
the outstanding principal amount of such pari passu Indebtedness and the
denominator of which is the sum of the outstanding principal amount of the Notes
and such pari passu Indebtedness, in which case the Net Proceeds Offer Amount
shall be correspondingly reduced by such Pari Passu Offer Amount.
(c) The Company may credit against its obligation to make a
Net Proceeds Offer pursuant to this Section 4.10 up to $2 million aggregate
principal amount of Notes, at 100% of the principal amount thereof, which have
been acquired by the Company and
49
surrendered for cancellation after the making of the Net Proceeds Offer and
which have not been used as a credit against or acquired pursuant to any prior
obligation to make an offer to purchase Notes pursuant to the provisions set
forth under Section 4.14 or this Section 4.10.
(d) Upon notice of a Net Proceeds Offer provided to the
Trustee by the Company, notice of such Net Proceeds Offer shall be mailed by the
Trustee (at the Company's expense) not less than 30 calendar days nor more than
60 calendar days before the Net Proceeds Purchase Date to each Holder of Notes
at such Holder's last registered address appearing in the Register. The Company
shall provide the Trustee with copies of all materials to be delivered with such
notice. The notice shall contain all instructions and material necessary to
enable such Holders to tender Notes pursuant to the Net Proceeds Offer. In such
notice, the Company shall state: (1) that the Net Proceeds Offer is being made
pursuant to this Section 4.10 and that it will purchase the principal amount of
Notes equal to the Net Proceeds Offer Amount; (2) the Net Proceeds Offer Price
and the Net Proceeds Purchase Date; (3) that any Note not tendered will continue
to accrue interest; (4) that, unless the Company defaults in the payment of the
Net Proceeds Offer Price, all Notes accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Net Proceeds Purchase
Date; (5) that Holders electing to have any Notes purchased pursuant to such Net
Proceeds Offer will be required to surrender the Notes, and complete the section
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes or
transfer beneficial ownership of such Notes by book-entry transfer, to the
Company, the Depositary (if appointed by the Company), or the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Net Proceeds Purchase Date; (6) that Holders will be
entitled to withdraw their election if the Company, the Depositary or the Paying
Agent, as the case may be, receives, not later than the close of business on the
third Business Day preceding the Net Proceeds Purchase Date, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have the Notes purchased; and (7) that
Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered
(or transferred by book-entry transfer), provided that the principal amount of
such unpurchased portion must be equal to $1,000 or an integral multiple
thereof. If Notes in a principal amount in excess of the Net Proceeds Offer
Amount are surrendered pursuant to the Net Proceeds Offer, the Company shall
purchase Notes on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000 or
integral multiples of $1,000 shall be acquired). The Company will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a Net
Proceeds Offer.
(e) On the Net Proceeds Purchase Date, the Company shall (i)
accept for payment Notes or portions thereof validly tendered pursuant to the
Net Proceeds Offer (on a pro rata basis if required), (ii) deposit with the
Paying Agent money in immediately available funds, sufficient to pay the
purchase price of all Notes or portions thereof so accepted, and (iii) deliver
to the Trustee Notes so accepted together with an Officers' Certificate stating
the Notes or portions thereof accepted for payment by the Company. If the
Company complies with its obligations set forth in the immediately preceding
sentence, whether or not a Default or Event of Default has occurred and is
continuing on the Net Proceeds Purchase Date, the Paying Agent
50
shall as promptly as practicable mail to each Holder of Notes so accepted
payment in an amount equal to the purchase price, and the Company shall execute
and the Trustee shall as promptly as practicable authenticate and mail or
deliver to such Holder a new Note equal in principal amount to any unpurchased
portion of the Note surrendered. Any Notes not so accepted shall be as promptly
as practicable mailed or delivered by the Company to the Holders thereof. The
Company shall publicly announce the results of the Net Proceeds Offer on or as
promptly as practicable after the Net Proceeds Purchase Date. For purposes of
this covenant, the Trustee shall act as the Paying Agent.
(f) Notwithstanding anything to the contrary contained in this
Indenture, the Company or any of its Restricted Subsidiaries may engage in
transactions in which theatre properties will be transferred in exchange for one
or more other theatre properties; provided that if the Fair Market Value of the
theatre properties to be transferred by the Company or such Restricted
Subsidiary, plus the Fair Market Value of any other consideration paid or
credited by the Company or such Restricted Subsidiary (the "Transaction Value")
exceeds $2 million, such transaction shall require approval of the Board of
Directors. In addition, each such transaction shall be valued at an amount equal
to all consideration received by the Company or such Restricted Subsidiary in
such transaction, other than the theatre properties received pursuant to such
exchange ("Other Consideration"), for purposes of determining whether an Asset
Disposition has occurred. If the Other Consideration is of an amount and
character such that such transaction constituted an Asset Disposition, then
Section 4.10(a) shall be applicable to any Net Proceeds of such Other
Consideration.
Section 4.11. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted
Subsidiary of the Company to, directly or indirectly, enter into any transaction
(including without limitation the purchase, sale, lease or exchange of any
property or the rendering of any service) with a Person that, immediately prior
to such transaction, was an Affiliate (an "Affiliate Transaction"), unless such
transaction is on terms no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained in a comparable arms' length
transaction with an entity that is not an Affiliate; provided that continued
performance under agreements as in effect on the Initial Issuance Date and
described in the Offering Memorandum, or consummation, on the terms described in
the Offering Memorandum, of transactions described therein that are not
consummated prior to the Initial Issuance Date (and renewals and extensions of
such agreements and transactions on terms not materially less favorable to the
Holders than the terms of such original agreements and transactions), shall not
be subject to such limitation.
In addition, the Company shall not, and shall not permit any
of the Restricted Subsidiaries of the Company to, enter into (i) an Affiliate
Transaction involving or having an expected value of more than $2 million unless
such transaction shall have been approved in good faith by resolution of the
Board of Directors and such resolution provides that such Affiliate Transaction
complies with the requirements of this Section 4.11 or (ii) an Affiliate
Transaction involving or having an expected value of more than $15 million,
unless the Company has received an opinion of a nationally recognized
independent investment banking firm, accounting firm, appraisal firm or other
experts of nationally recognized standing if, in each case, such firm
51
is regularly engaged to render opinions of such type, to the effect that the
transaction is fair to the Company (or, if the Company is not a party to such
Affiliate Transaction, then to such Restricted Subsidiary) from a financial
point of view.
Notwithstanding anything to the contrary contained in this
Indenture, the foregoing provisions shall not apply to (i) transactions between
the Company and a Wholly Owned Subsidiary of the Company that is a Restricted
Subsidiary or between Wholly Owned Subsidiaries of the Company that are
Restricted Subsidiaries, (ii) payments required to be made to the Company or a
Restricted Subsidiary by a Subsidiary under any subsidiary management agreement,
as the case may be, (iii) payments pursuant to any tax sharing agreement or
arrangement among the Company and its Subsidiaries, (iv) transactions with any
current or former employee, officer or director of the Company or any of its
Restricted Subsidiaries pursuant to reasonable employee benefit plans or
compensation arrangements or agreements entered into in the ordinary course of
business on or prior to the Start Date, or amended or created thereafter with
the approval of the Board of Directors, (v) transactions with any employee of
the Company pursuant to which the Company purchases or otherwise acquires
Capital Stock of the Company from such employee as permitted under Section 4.7,
or (vi) transactions constituting (A) a Restricted Payment not prohibited by
Section 4.7 and not constituting a Permitted Investment, or (B) an investment
not constituting an "Investment" by reason of a specific exclusion from such
definition.
Section 4.12. Limitation on Liens.
The Company shall not, and shall not permit any of the
Restricted Subsidiaries of the Company to, create, incur, assume or suffer to
exist any Lien upon any of its property or assets (including assets acquired
after the Initial Issuance Date), except for:
(i) (a) Liens incurred after the Initial Issuance Date
securing Indebtedness of the Company or any Guarantor
that ranks pari passu to the Notes or the Subsidiary
Guarantees, as the case may be, if the Notes or the
Subsidiary Guarantees, as applicable, are secured
equally and ratably with such Indebtedness, and
(b) Liens incurred after the Initial Issuance Date
securing Indebtedness of the Company or any Guarantor
that ranks junior in right of payment to the Notes or
the Subsidiary Guarantees, as the case may be, if the
Notes or the Subsidiary Guarantees, as applicable,
are secured by a Lien on such property or assets that
is senior in priority to such Liens;
(ii) Liens outstanding on the Initial Issuance Date;
(iii) Liens for taxes, assessments, governmental charges or
claims not yet delinquent or which are being
contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto
are maintained on the books of the Company or its
Restricted Subsidiaries, as the case may be, in
conformity with GAAP;
52
(iv) Landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's or the like Liens arising
by contract or statute in the ordinary course of
business and with respect to amounts which are not
yet delinquent or are being contested in good faith
by appropriate proceedings;
(v) pledges or deposits made in the ordinary course of
business (A) in connection with leases, performance
bonds and similar obligations, or (B) in connection
with workers' compensation, unemployment insurance
and other social security legislation;
(vi) easements, rights-of-way, restrictions, minor defects
or irregularities in title and other similar
encumbrances which, in the aggregate, do not
materially detract from the value of the property
subject thereto or materially interfere with the
ordinary conduct of the business of the Company or
such Restricted Subsidiary;
(vii) any attachment or judgment Lien that does not
constitute an Event of Default;
(viii) Liens securing Acquired Indebtedness, provided that
such Liens attach solely to the acquired assets or
the assets of the acquired entity and do not extend
to or cover any other assets of the Company or any of
its Restricted Subsidiaries;
(ix) Liens to secure Senior Indebtedness of the Company or
any Guarantor;
(x) Liens in favor of the Trustee for its own benefit and
for the benefit of the Securityholders;
(xi) any interest or title of a lessor pursuant to a lease
constituting a Capitalized Lease Obligation;
(xii) Liens on accounts receivable and inventory or cash
deposits collateralizing reimbursement obligations
with respect to letters of credit, in either case
securing Indebtedness permitted to be incurred under
clause (i) of Section 4.9(b);
(xiii) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory or
regulatory obligations, banker's acceptances, surety
and appeal bonds, government contracts, performance
and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of
borrowed money);
(xiv) Liens (including extensions and renewals thereof)
upon real or personal property acquired after the
Initial Issuance Date; provided that (a) such Lien is
created solely for the purpose of securing
Indebtedness incurred, in
53
accordance with Section 4.9, (1) to finance the cost
(including the cost of improvement or construction)
of the item of property or assets subject thereto and
such Lien is created prior to, at the time of or
within six months after the later of the acquisition,
the completion of construction or the commencement of
full operation of such property or (2) to refinance
any Indebtedness previously so secured, (b) the
principal amount of the Indebtedness secured by such
Lien does not exceed 100% of such cost and (c) any
such Lien shall not extend to or cover any property
or assets other than such item of property or assets
and any improvements on such item;
(xv) leases or subleases granted to others that do not
materially interfere with the ordinary course of
business of the Company and its Restricted
Subsidiaries, taken as a whole;
(xvi) Liens encumbering property or assets under
construction arising from progress or partial
payments by a customer of the Company or its
Restricted Subsidiaries relating to such property or
assets;
(xvii) any interest or title of a lessor in the property
subject to any Capitalized Lease Obligation or
operating lease;
(xviii) Liens arising from filing Uniform Commercial Code
financing statements regarding leases;
(xix) Liens on property of, or on shares of stock or
Indebtedness of, any Person existing at the time such
Person becomes, or becomes a part of, any Restricted
Subsidiary, provided that such Liens do not extend to
or cover any property or assets of the Company or any
Restricted Subsidiary other than the property or
assets acquired;
(xx) Liens in favor of the Company or any Restricted
Subsidiary;
(xxi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of
customs duties in connection with the importation of
goods;
(xxii) Liens encumbering deposits securing Indebtedness
under Hedging Obligations;
(xxiii) Liens arising out of conditional sale, title
retention, consignment or similar arrangements for
the sale of goods entered into by the Company or any
of its Restricted Subsidiaries in the ordinary course
of business in accordance with the past practices of
the Company and its Restricted Subsidiaries;
(xxiv) Liens on or sales of receivables;
54
(xxv) the rights of film distributors under film licensing
contracts entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of
business on a basis customary in the movie exhibition
industry; and
(xxvi) any renewal of or substitution for any Liens
permitted by any of the preceding clauses, provided
that the Indebtedness secured is not increased (other
than by any premium and accrued interest, plus
customary fees, expenses and costs related to such
renewal or substitution of Liens or the incurrence of
any related refinancing of Indebtedness) nor the
Liens extended to any additional assets (other than
proceeds and accessions).
The provisions of this Section 4.12 do not authorize the
incurrence of any Indebtedness not otherwise permitted by Section 4.9.
Section 4.13. Limitation on Layering Debt.
The Company and the Guarantors will not incur, create, issue,
assume, guarantee or otherwise become liable for any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness of the
Company or the Guarantors, as the case may be, but senior in right of payment to
the Notes or the Subsidiary Guarantees, as the case may be.
Section 4.14. Change of Control.
(a) At any time on or prior to February 1, 2008, the Company
may, at its option, redeem the Notes, in whole, upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice but in no
event more than 90 days after the occurrence of such Change of Control, at a
redemption price equal to 100% of the principal amount of the Notes to be
redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if
any, to the date of redemption (the "Change of Control Redemption Date"), except
that installments of interest which are due and payable on dates falling on or
prior to the applicable redemption date will be payable to the Persons who were
the Holders of record at the close of business on the relevant record dates.
(b) Upon the occurrence of a Change of Control, if the Company
does not redeem the Notes as provided in Section 4.14(a) of this Indenture, the
Company shall be required to make an offer (a "Change of Control Offer") to
Holders to repurchase any and all of the Notes (but only in denominations of
$1,000 or integral multiples of $1,000) at a purchase price (the "Change of
Control Offer Price") equal to 101% of the aggregate principal amount, plus
accrued and unpaid interest to the date of purchase ("Change of Control Purchase
Date").
(c) Unless the Company has mailed a notice with respect to a
redemption pursuant to Section 4.14(a) of this Indenture with respect to all the
Notes in connection with a Change of Control on or prior to February 1, 2008,
notice of a Change of Control Offer shall be mailed by the Company, with a copy
to the Trustee, or, at the Company's option, by the Trustee (at the Company's
expense) not more than 30 calendar days after the Change of Control to each
55
Holder of the Notes at such Holder's last registered address appearing in the
Register. In such notice, the Company shall describe the transaction that
constitutes the Change of Control and offer to repurchase Notes pursuant to the
procedures required by this Section 4.14 and described in such notice. The
notice shall contain all instructions and materials necessary to enable Holders
to tender Notes pursuant to the Change of Control Offer. In addition, the notice
shall state: (1) that the Change of Control Offer is being made pursuant to this
Section 4.14 and that all Notes tendered will be accepted for payment; (2) the
Change of Control Offer Price and the Change of Control Purchase Date, which
shall be no sooner than 60 nor later than 90 days after the Change of Control;
(3) that any Note not tendered will continue to accrue interest; (4) that,
unless the Company defaults in the payment of the Change of Control Offer Price,
all Notes accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase Date; (5) that
Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to deliver the Notes, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Notes completed, or transfer by
book-entry transfer, to the Company, the Depositary (if appointed by the
Company), or the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Change of Control
Purchase Date; (6) that Holders will be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the close of business on the third Business Day preceding the
Change of Control Purchase Date, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or transferred by book-entry
transfer), which unpurchased portion must be equal to at least $1,000 in
principal amount or an integral multiple thereof. The Company will comply with
the requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control.
(d) On the Change of Control Purchase Date, the Company shall
(i) accept for payment Notes or portions thereof validly tendered pursuant to
the Change of Control Offer, (ii) deposit with the Paying Agent money in
immediately available funds sufficient to pay the purchase price of all Notes or
portions thereof so accepted, and (iii) deliver to the Trustee Notes so accepted
together with an Officer's Certificate stating the Notes or portions thereof
accepted for payment by the Company. If the Company complies with its
obligations set forth in the immediately preceding sentence, whether or not a
Default or Event of Default has occurred and is continuing on the Change of
Control Purchase Date, the Paying Agent shall as promptly as practicable mail or
deliver to each Holder of Notes so accepted payment in an amount equal to the
purchase price, and the Company shall execute and the Trustee shall as promptly
as practicable authenticate and mail or deliver to such Holder a new Note equal
in principal amount to any unpurchased portion of the Note surrendered, if any;
provided that each such new Note will be in a principal amount of $1,000 or an
integral multiple thereof. Any Notes not so accepted shall be as promptly as
practicable mailed or delivered by the Trustee to the Holders thereof. The
Company shall publicly announce the results of the Change of Control Offer on or
as promptly as practicable after the Change of Control Purchase Date. For
purposes of this Section 4.14, the Trustee shall act as the Paying Agent.
56
(e) Prior to complying with the other provisions of this
Section 4.14, but in any event within 90 days following a Change of Control, the
Company shall either repay all outstanding Senior Indebtedness or obtain the
requisite consents, if any, under all agreements governing outstanding Senior
Indebtedness to permit the repurchase of Notes required by this Section 4.14.
Section 4.15. Corporate Existence.
Except as otherwise permitted pursuant to the terms hereof,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Significant Subsidiaries, in
accordance with their respective organizational documents (as the same may be
amended from time to time), and (ii) the material rights (charter and
statutory), licenses and franchises of the Company and its Significant
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise of itself or any of its
Significant Subsidiaries, or the corporate, partnership or other existence of
any of its Significant Subsidiaries, if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the Notes.
Section 4.16. Covenant with Respect to Cinemark International and its
Subsidiaries.
The Company shall cause Cinemark International and its
Subsidiaries on a consolidated basis to be engaged principally in the
acquisition, construction and operation of indoor motion picture theatres and
other activities incidental thereto outside the United States and Canada.
Section 4.17. Limitation on Restrictive Covenants.
Notwithstanding any other provision of this Indenture, the
restrictive covenants set forth in this Indenture, including, without
limitation, those set forth in Sections 4.7, 4.9, 4.10, 4.11 and 5.1 shall be
and shall be deemed limited to the extent necessary so that the creation,
existence and effectiveness of such restrictive covenants shall not result in a
breach of the covenant set forth in Section 4.8 of the Senior Subordinated
Indentures.
Section 4.18. Additional Subsidiary Guarantors.
The Company shall cause its Restricted Subsidiaries to comply
with Section 11.6.
57
ARTICLE 5
SUCCESSORS
Section 5.1. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate with or merge with or into,
or sell, assign or lease all or substantially all of the properties and assets
of the Company and its Restricted Subsidiaries, taken as a whole, to any Person
(other than the Company or a Wholly Owned Subsidiary of the Company that is a
Restricted Subsidiary), or permit any Person (other than a Wholly Owned
Subsidiary of the Company that is a Restricted Subsidiary) to merge with or into
the Company unless:
(i) the Company shall be the continuing Person, or the
Person formed by such consolidation or into which the
Company is merged or to which the properties and
assets of the Company and its Restricted Subsidiaries
taken as a whole are transferred (the "surviving
entity") shall be a corporation organized and
existing under the laws of the United States or any
state thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of
the Company under the Notes and this Indenture, and
this Indenture shall remain in full force and effect;
(ii) immediately before and immediately after giving
effect to such transaction, no Event of Default and
no Default shall have occurred and be continuing;
(iii) unless the applicable transaction involves the merger
of a Restricted Subsidiary of the Company into the
Company, the Company or, in the case of a
consolidation or merger in which the Company is not
the continuing Person, the surviving entity, after
giving pro forma effect to such transaction, could
incur $1.00 of additional Indebtedness (assuming a
market rate of interest with respect to such
additional Indebtedness) pursuant to Section 4.9(a);
and
(iv) unless the applicable transaction involves the merger
of a Restricted Subsidiary of the Company into the
Company, immediately after giving effect to such
transaction, the Consolidated Net Worth of the
Company, or, in the case of a consolidation or merger
in which the Company is not the continuing Person,
the surviving entity, shall be equal to or greater
than the Consolidated Net Worth of the Company
immediately before such transaction.
58
Section 5.2. Successor Company Substituted.
Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company and its Restricted Subsidiaries
taken as a whole in accordance with Section 5.1 hereof, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such transfer is made, shall succeed to, and be substituted for, and
may exercise every right and power of the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
therein; and thereafter, if the Company is dissolved following a transfer of all
or substantially all of its assets in accordance with this Indenture, the
Company shall be discharged and released from all obligations and covenants
under this Indenture and the Notes. The Trustee shall enter into a supplemental
indenture to evidence the succession and substitution of such successor Person
and such discharge and release of the Company.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1. Events of Default.
An "Event of Default" occurs if one of the following shall
have occurred and be continuing:
(a) the Company defaults in the payment of (i) the principal
of (or premium, if any, on) any Notes when the same becomes due and
payable at maturity, by acceleration or otherwise, (ii) the redemption
price on any redemption date, or (iii) the Change of Control Offer
Price or the Net Proceeds Offer Price on the applicable Offer Purchase
Date relating to such Offer;
(b) the Company defaults in the payment of interest on any
Note when the same becomes due and payable, which default continues for
a period of 30 calendar days;
(c) the Company or any Subsidiary of the Company fails to
comply with any of its covenants or agreements in the Notes or this
Indenture (other than those referred to in clauses (a) and (b) above)
and such failure continues for 45 calendar days after receipt by the
Company of a Notice of Default specifying such Default;
(d) an event of default on any other Indebtedness for borrowed
money of the Company or any of its Restricted Subsidiaries having an
aggregate amount outstanding in excess of $5 million which default (i)
is caused by a failure to pay when due (after giving effect to any
grace periods) any principal, premium, if any, or interest on such
Indebtedness or (ii) has caused the holders thereof to declare such
Indebtedness due and payable in advance of its scheduled maturity;
(e) the Company or any Significant Subsidiary of the Company
pursuant to or within the meaning of any Bankruptcy Law: (i) commences
a voluntary case or proceeding,
59
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding, (iii) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (iv)
makes a general assignment for the benefit of its creditors, or (v)
admits in writing its inability to pay its debts generally as they
become due;
(f) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company or any Significant Subsidiary of the Company in an involuntary
case or proceeding, (ii) appoints a Custodian of the Company or any
Significant Subsidiary of the Company or for all or substantially all
of its respective properties, or (iii) orders the liquidation of the
Company or any Significant Subsidiary of the Company; and in each case
the order or decree remains unstayed and in effect for 60 calendar
days;
(g) final non-appealable judgments for the payment of money
which in the aggregate exceed $10 million (net of applicable insurance
coverage which is acknowledged in writing by the insurer) shall be
rendered against the Company or any Significant Subsidiary of the
Company by a court and shall remain unstayed or undischarged for a
period of 60 calendar days; or
(h) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in any judicial proceeding to be unenforceable
or invalid or shall cease for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Subsidiary Guarantee.
A Default under clause (c) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding notify the
Company and the Trustee, of the Default and the Company does not cure such
Default within 45 days after receipt of such notice. Such notice must be in
writing and specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default."
Notwithstanding the foregoing, if an Event of Default
specified in clause (d) above occurs and is continuing, such Event of Default
and all consequences thereof (including, without limitation, any acceleration or
resulting payment default) shall be annulled and rescinded, automatically and
without any action by the Trustee or the holders of the Notes, if (i) the
Indebtedness that is the subject of such Event of Default has been repaid, or
(ii) the default relating to such Indebtedness is waived or cured (and if such
Indebtedness has been accelerated, then the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness).
Section 6.2. Acceleration.
If any Event of Default specified in clauses (a), (b), (c),
(d), (g) or (h) of Section 6.1 hereof occurs and is continuing, then the Holders
of at least 25% in aggregate principal amount of the then outstanding Notes by
written notice to the Company and the Trustee may declare the unpaid principal
of, and any accrued interest on, all the Notes to be due and
60
payable immediately. If any Event of Default specified in clauses (e) or (f) of
Section 6.1 hereof occurs, all outstanding principal and interest on the Notes
shall be immediately due and payable without any declaration or other act on the
part of the Trustee or any Holder. The Holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Trustee
and to the Company, may rescind an acceleration (except an acceleration due to a
default in payment of the principal of, or premium or interest on, any of the
Notes) if the rescission would not conflict with any judgment or decree and if
all existing Events of Default (except nonpayment of principal, premium or
interest that have become due solely because of the acceleration) have been
cured or waived.
Section 6.3. Other Remedies.
Subject to Section 6.2, if an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect any payment due on the Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.4. Waiver of Past Defaults.
Subject to Section 9.2, Holders of a majority in aggregate
principal amount of the then outstanding Notes by notice to the Trustee may, on
behalf of the Holders of all of the Notes, waive an existing Default or Event of
Default and its consequences hereunder (including without limitation
acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.5. Control by Majority.
The Holders of a majority in aggregate principal amount of the
Notes then outstanding may, subject to the Trustee's being indemnified as
provided under this Indenture, direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of another Holder or that
involves the Trustee in personal liability. The Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction.
61
Section 6.6. Limitation on Suits.
Subject to the provisions of Section 6.7 hereof, no Holder of
a Note may pursue any remedy with respect to this Indenture or the Notes
(including without limitation the institution of any proceeding, judicial or
otherwise, with respect to the Notes or this Indenture or for the appointment of
a receiver or trustee for the Company and/or any of its Subsidiaries) unless:
(a) the Holder has given to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the Notes then outstanding have made a written request to the
Trustee to pursue the remedy;
(c) such Holders have offered to provide to the Trustee
indemnity reasonably satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee has not complied with the request within 60
calendar days after receipt of the request and the offer of indemnity;
and
(e) during such 60-day period, the Holders of a majority in
aggregate principal amount of the Notes then outstanding have not given
the Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.7. Rights of Holders of Notes to Receive Payment.
The right of any Holder of a Note to receive payment of
principal of, and premium, if any, and interest on, the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 6.8. Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for principal
of, and premium, if any, and interest on, the Notes and interest on overdue
principal and, to the extent lawful, interest, and such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
62
Section 6.9. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7 hereof. To the extent that the payment of any such
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties that
the Holders may be entitled to receive in such proceeding whether in liquidation
or under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, and interest ratably, without preference
or priority of any kind, according to the amounts due and payable on the Notes
for principal, premium, if any, and interest, respectively; and
Third: the remainder to the Company or to such party as a
court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
63
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, each party to this Indenture agrees, and each Holder
by its acceptance of its Notes shall be deemed to have agreed, that any court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in principal amount of the then
outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
its own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee shall not be liable hereunder except
for such duties of the Trustee which shall be determined
solely by the express provisions of this Indenture and the
Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and
opinions to determine whether or not such documents conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
64
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it is proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section 7.1.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability whatsoever in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers hereunder. The Trustee shall be under no obligation to exercise
any of its rights and powers under this Indenture at the request of any Holders,
unless such Holder shall have offered to the Trustee security and indemnity
satisfactory to it in its sole subjective discretion (which discretion shall be
exercised in good faith) against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2. Rights of Trustee.
(a) Subject to Section 7.1, the Trustee may conclusively rely
upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and require an Officers' Certificate or an Opinion of
Counsel or both. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on such Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes in its sole subjective discretion
(which discretion shall be exercised in good faith) to be authorized or within
the rights or powers conferred upon it by this Indenture.
(e) The permissive right of the Trustee to act hereunder shall
not be construed as a duty.
65
(f) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee security or indemnity satisfactory to the Trustee in its sole subjective
discretion (which discretion shall be exercised in good faith) against the
costs, expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(h) The Trustee shall not be required to take notice or deemed
to have notice of any Event of Default hereunder, except failure by the Company
to make any of the payments to the Trustee pursuant to Section 6.1(a) or Section
6.1(b) hereof, unless the Trustee shall be specifically notified in writing of
such Event of Default by the Company or by one or more of the Holders.
Section 7.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as such term is defined in TIA Section 310(b)), it must eliminate such
conflict within 90 days, apply to the SEC for permission to continue as trustee
(to the extent permitted under TIA Section 310(b)) or resign. Any Agent may do
the same with like rights and duties. The Trustee is also subject to Sections
7.10 and 7.11 hereof.
Section 7.4. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee,
and it shall not be responsible for any statement or recital herein or any
statement in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
Section 7.5. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after such event
occurs. Except in the case of a Default or Event of Default under Section 6.1(a)
or (b), the Trustee may withhold such notice if it determines that withholding
the notice is in the interests of the Holders of the Notes.
66
Section 7.6. Reports by Trustee to Holders of the Notes.
Within 60 days after each July 31 beginning with the July 31
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange, if any, on which the Notes are listed in accordance with and to
the extent required by TIA Section 313(d). The Company shall promptly notify the
Trustee if the Notes become listed on any stock exchange or automatic quotation
system.
Section 7.7. Compensation and Indemnity.
Absent any other agreement to the contrary, the Company shall
pay to the Trustee from time to time compensation as shall be agreed upon
between the Company and the Trustee for its acceptance of this Indenture and
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.7) and defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall promptly notify
the Company of any claim for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel; provided that the Company will not be required to pay such fees
and expenses if it assumes the Trustee's defense with counsel acceptable to and
approved by the Trustee (such approval not to be unreasonably withheld) and
there is no conflict of interest between the Company and the Trustee in
connection with such defense. The Company need not pay for any settlement made
without its written consent, which consent shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or indemnity against
any liability or loss of the Trustee to the extent such expense, liability or
loss is attributable to the negligence, bad faith or willful misconduct of the
Trustee.
67
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(e) or (f) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2).
Section 7.8. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing upon 60 days notice and be
discharged from the trust hereby created by so notifying the Company in writing.
The Holders of Notes of a majority in principal amount of the then outstanding
Notes may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor trustee with the consent of the Company. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a receiver, Custodian or public officer takes charge of
the Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint or
request the Trustee to appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the then outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
68
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
69
ARTICLE 8
DEFEASANCE AND DISCHARGE
Section 8.1. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.2 or 8.3 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.2. Legal Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.2, the Company shall be deemed to have been
discharged from its obligations with respect to all outstanding Notes and this
Indenture and the Guarantors shall be deemed to have been discharged from their
obligations with respect to this Indenture, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.6
hereof and the other Sections of this Indenture referred to in (a) and (b)
below, and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged pursuant to this Indenture: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.4 hereof, and
as more fully set forth in such Section, payments in respect of the principal
of, and premium, if any, and interest on, such Notes when such payments are due,
(b) the Company's obligations with respect to such Notes under Article 2 and
Section 4.2 hereof, (c) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and (d) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 hereof.
Section 8.3. Covenant Defeasance.
Upon the Company's exercise under Section 8.1 hereof of the
option applicable to this Section 8.3, and subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, the Company and the Guarantors shall
be released from their obligations under the covenants contained in Sections
4.4, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.18, 5.1,
and 5.2 and Article 11 on and after the date the conditions set forth below are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter
be deemed not "outstanding" for the purposes of any direction, waiver, consent
or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
70
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 6.1 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(c) through 6.1(h)
hereof shall not constitute Events of Default.
Section 8.4. Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant
Defeasance, the Company must irrevocably deposit, or caused to be deposited,
with the Trustee (or another trustee satisfying the requirements of this
Indenture), in trust for such purpose, (1) money in an amount, (2) U.S.
Government Obligations which through the payment of principal and interest in
accordance with their terms will provide money in an amount, or (3) 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 Trustee, to pay the principal of, premium, if any, and interest
on, the outstanding Notes at maturity or upon redemption, together with all
other amounts payable by the Company under this Indenture. Such Legal Defeasance
or Covenant Defeasance will become effective 91 days after such deposit if and
only if:
(i) no Default or Event of Default with respect to
the Notes has occurred and is continuing immediately prior to
the time of such deposit;
(ii) no Default or Event of Default pursuant to
Sections 6.1(e) or 6.1(f) shall have occurred at any time in
the period ending on the 91st day after the date of such
deposit and shall be continuing on such 91st day;
(iii) such defeasance does not result in a breach or
violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by
which it is bound (and, in furtherance of such condition, no
Default or Event of Default shall result under this Indenture
due to the incurrence of Indebtedness to fund such deposit and
the entering into of customary documentation in connection
therewith, even though such documentation may contain
provisions that would otherwise give rise to a Default or
Event of Default); and
(iv) the Company has delivered to the Trustee (A)(1)
in the case of Legal Defeasance, an Opinion of Counsel to the
effect that (x) there has been published by the Internal
Revenue Service a ruling or (y) since the date of this
Indenture, there has been a change in the applicable federal
income tax law, in either case to the
71
effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the Notes will not recognize
income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal
Defeasance had not occurred, or (2) in the case of Covenant
Defeasance, an Opinion of Counsel to the effect that the
Holders of the Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the
same amount, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not
occurred; and (B) an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating
to such Legal Defeasance or Covenant Defeasance have been
complied with.
Section 8.5. Discharge.
If (i) the Company shall deliver to the Trustee for
cancellation all Notes theretofore authenticated and delivered (other than any
Notes which shall have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore cancelled, or (ii) all Notes not theretofore surrendered or
delivered to the 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 Trustee,
and the Company shall irrevocably deposit with the Trustee, as trust funds
solely for the benefit of the Holders for that purpose, an amount sufficient to
pay at maturity or upon redemption all of the Notes (other than any Notes which
shall have been destroyed, lost or stolen and in lieu of or in substitution for
which other Notes shall have been authenticated and delivered) not theretofore
surrendered or delivered to the Trustee for cancellation, including principal,
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, then this Indenture shall cease to be of
further force or effect (except as to rights of registration of transfer or
exchange of the Notes provided in this Indenture) and, at the written request of
the Company, accompanied by an Officer's Certificate and Opinion of Counsel,
each stating that all conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture have been complied with, and upon
payment of the costs, charges and expenses incurred or to be incurred by the
Trustee in relation thereto or in carrying out the provisions of this Indenture,
the Trustee shall satisfy and discharge this Indenture ("Discharge"); provided
that the Company's or any Guarantor's obligations with respect to the payment of
principal, premium, if any, and interest will not terminate until the same shall
apply the moneys so deposited to the payment to the Holders of Notes of all sums
due and to become due thereon.
Section 8.6. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.7 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee,
72
collectively for purposes of this Section 8.6, the "Trustee") pursuant to
Section 8.4 or 8.5 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company or any of its Subsidiaries or Affiliates acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to this Section 8.6 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or U.S. Government Obligations held by it as
provided in this Section 8.6 which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.4 hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance, Covenant
Defeasance or Discharge.
Section 8.7. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company or any of its Subsidiaries or Affiliates, in trust for
the payment of the principal of, or premium, if any, or interest on, any Note
and remaining unclaimed for one year after such principal, premium, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company or any of its Subsidiaries or Affiliates) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company or any of its Subsidiaries or Affiliates
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in the New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such notification or publication, any unclaimed balance
of such money then remaining will be repaid to the Company.
Section 8.8. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with Section 8.2,
8.3 or 8.5 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining
73
or otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes, and any Guarantor's obligations under this
Indenture, shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.2, 8.3 or 8.5 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such assets in accordance with Section
8.2, 8.3 or 8.5 hereof, as the case may be; provided, however, that, if the
Company makes any payment of principal of, or premium, if any, or interest on,
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1. Without Consent of Holders of Notes.
Notwithstanding Section 9.2 of this Indenture, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of Notes in the case of a merger
or consolidation;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any such Holder;
(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA as then
in effect;
(f) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture; or
(g) to add additional Guarantors with respect to the Notes.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company and the
Guarantors in the execution of any amended or supplemental Indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
74
Section 9.2. With Consent of Holders of Notes.
Except as provided below in this Section 9.2, this Indenture
or the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), and, subject to Sections 6.4
and 6.7 and the last sentence of Section 6.1 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of
principal of, premium, if any, or interest on, the Notes, except a payment
default resulting from an acceleration that has been rescinded) or compliance
with any provision of this Indenture or the Notes may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for Notes).
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.2
hereof, the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental Indenture and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into such amended or supplemental
Indenture that adversely affects its own rights, duties, liabilities or
immunities under this Indenture or otherwise.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.2 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
9.2 becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in principal amount of the Notes then outstanding may
waive compliance in a particular instance by the Company or the Guarantors with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter the provisions with respect to the redemption of the
Notes;
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of, premium, if any, or interest on, the Notes (except a
rescission of acceleration of the Notes
75
by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, premium, if any, or interest on,
the Notes;
(g) waive a redemption payment with respect to any Note;
(h) release any Guarantor from any of its obligations under
this Indenture, except in accordance with the terms of this Indenture;
or
(i) make any change in the foregoing amendment and waiver
provisions.
In addition, any amendment to the provisions of Article 10 of
this Indenture requires the consent of the Holders of at least 66-2/3% in
aggregate principal amount of the Notes then outstanding if such amendment would
adversely affect the rights of Holders of the Notes.
Section 9.3. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.4. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment has
been approved by the requisite Holders. An amendment, supplement or waiver
becomes effective when approved by the requisite Holders and executed by the
Trustee (or, if otherwise provided in such waiver, supplement or amendment, in
accordance with its terms) and thereafter binds every Holder.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies), and only those
Persons, shall be entitled to consent to such amendment or waiver or revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No consent shall be valid or effective for more than 90
days after such record
76
date except to the extent that the requisite number of consents to the
amendment, supplement or waiver have been obtained within such 90-day period or
as set forth in the next paragraph of this Section 9.4.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(a) through (i) of Section 9.2, in which case, the amendment, supplement or
waiver shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same
indebtedness as the consenting Holder's Note.
Section 9.5. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue, and the Trustee shall authenticate,
new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
In executing any amended or supplemental indenture, the Trustee shall be
entitled to receive and (subject to Section 7.1) shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such amended or supplemental indenture is authorized or
permitted by this Indenture.
Section 9.7. Payments for Consent.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Notes for or as an inducement to any consent, waiver or amendment of any
terms or provisions of the Notes unless such consideration is offered to be paid
or agreed to be paid to all Holders of the Notes which so consent, waive or
agree to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
77
ARTICLE 10
SUBORDINATION
Section 10.1. Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note
agrees, that the payment of principal of, and premium, if any, and interest on,
and other Obligations evidenced by, the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article 10, to the
prior payment in full of all Senior Indebtedness (whether outstanding on the
date hereof or hereafter incurred) of the Company, and that the subordination is
for the benefit of the holders of Senior Indebtedness.
Section 10.2. Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property, an assignment for the benefit of creditors or any marshalling of the
Company's assets and liabilities:
(1) holders of Senior Indebtedness shall be entitled
to receive payment in full in cash (or U.S. dollar-denominated
Cash Equivalents) of all Obligations due in respect of such
Senior Indebtedness (including interest after the commencement
of any such proceeding at the rate specified in the applicable
Senior Indebtedness) before the Holders of Notes shall be
entitled to receive any payment of any kind or character with
respect to the Notes; and
(2) until all Obligations with respect to Senior
Indebtedness are paid in full in cash (or U.S.
dollar-denominated Cash Equivalents), any distribution to
which the Holders of Notes would be entitled but for this
Article 10 shall be made to the holders of such Senior
Indebtedness.
Notwithstanding the foregoing, Holders of Notes may receive
(i) securities that are subordinated at least to the same extent as the Notes to
Senior Indebtedness and any securities issued in exchange for Senior
Indebtedness and (ii) payments made from the trusts described in Sections 8.4
and 8.5 hereof.
Section 10.3. Default on Designated Senior Indebtedness.
The Company may not make any payment of any kind or character
upon or in respect of the Notes (other than in (1) securities that are
subordinated to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness and (2) payments made from
the trusts described in Sections 8.4 and 8.5 hereof) if:
(i) a default in the payment of the principal of,
premium, if any, or interest on Designated Senior Indebtedness
occurs and is continuing; or
78
(ii) any other default occurs and is continuing with
respect to Designated Senior Indebtedness that permits holders
of the Designated Senior Indebtedness as to which such default
relates to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the
Company or the holders of any Designated Senior Indebtedness.
Payments on the Notes may and shall be resumed:
(a) in the case of default referred to in Section 10.3(i),
upon the date on which such default is cured or waived, and
(b) in case of a default referred to in Section 10.3(ii), upon
the earlier of (i) the date on which such default is cured or waived or
(ii) 179 days after the date on which the applicable Payment Blockage
Notice is received by the Trustee (unless the maturity of any
Designated Senior Indebtedness has been accelerated or unless the
provisions of this Article 10 otherwise do not permit such payment).
In no event shall more than one period of payment blockage be
made in any 360 consecutive day period. No nonpayment default that existed or
was continuing on the date of receipt by the Trustee of any Payment Blockage
Notice shall be, or be made, the basis for a subsequent Payment Blockage Notice.
Following the expiration of any period during which the Company is prohibited
from making payments on the Notes pursuant to a Payment Blockage Notice, the
Company will be obligated to resume making any and all required payments in
respect of the Notes, including without limitation any missed payments.
Section 10.4. Acceleration of Notes.
The Company and the Trustee shall promptly notify holders of
Designated Senior Indebtedness if payment of the Notes is accelerated because of
an Event of Default.
Section 10.5. When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any
payment of any Obligations with respect to the Notes at a time when the Trustee
or such Holder, as applicable, has actual knowledge that such payment is
prohibited by Section 10.3 hereof, such payment shall be held by the Trustee or
such Holder, in trust for the benefit of and, upon written request, shall be
paid forthwith over and delivered to, the holders of Senior Indebtedness as
their interests may appear or their Representative under the indenture or other
agreement (if any) pursuant to which Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Indebtedness remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
79
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders or the Company or any other Person money or assets to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
10, except if such payment is made as a result of the willful misconduct or
gross negligence of the Trustee.
Section 10.6. Notice by the Company.
The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of any
Obligations with respect to the Notes to violate this Article 10, but failure to
give such notice shall not affect the subordination of the Notes to the Senior
Indebtedness as provided in this Article.
Section 10.7. Subrogation.
After all Senior Indebtedness is irrevocably paid in full in
cash or U.S. dollar-denominated Cash Equivalents reasonably satisfactory to the
holders thereof and until the Notes are paid in full, Holders shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the Holders have been applied to the payment of Senior Indebtedness.
A distribution made under this Article to holders of Senior Indebtedness that
otherwise would have been made to Holders is not, as between the Company and
Holders, a payment by the Company on the Notes.
Section 10.8. Relative Rights.
This Article defines the relative rights of Holders and
holders of Senior Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the obligation
of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and other creditors
of the Company other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders.
80
If the Company fails because of this Article 10 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default.
Section 10.9. Subordination May Not Be Impaired by the Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Notes shall be impaired by
any act or failure to act by the Company or any Holder or by the failure of the
Company or any Holder to comply with this Indenture.
Section 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Obligations
with respect to the Notes to violate this Article. Only the Company or a
Representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.7 hereof.
The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a Representative of such holder) to establish that such notice
has been given by a holder of Senior Indebtedness (or a Representative of any
such holder). In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is
81
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 10, and if such
evidence is not furnished, the Trustee may defer any payment which it may be
required to make for the benefit of such Person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such Person to
receive such payment.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
Section 10.12. Authorization to Effect Subordination.
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.1. Guarantee.
Subject to this Article 11, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that: (a)
the principal of, premium, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration, redemption or
otherwise, and interest on the overdue principal of, premium, and interest on
the Notes, if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this Subsidiary Guarantee is a general unsecured
obligation of such Guarantor and it is a guarantee of payment and not a
guarantee of collection.
The Guarantors hereby agree that their obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise
82
constitute a legal or equitable discharge or defense of a guarantor. Each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that this Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations contained in the
Notes and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by the Company or a Guarantor either to the
Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under this Subsidiary Guarantee.
Section 11.2. Subordination of Subsidiary Guarantee.
The Obligations of each Guarantor under its Subsidiary
Guarantee pursuant to this Article 11 shall be junior and subordinated in right
of payment to the prior payment in full of all the obligations of such Guarantor
under its Senior Indebtedness (including any guarantees constituting Senior
Indebtedness and any Designated Senior Indebtedness of such Guarantor) on the
same basis as the Notes are junior and subordinated to Senior Indebtedness of
the Company. For the purposes of the foregoing sentence, the Trustee and the
Holders shall have the right to receive and/or retain payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof.
Section 11.3. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder,
hereby confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention,
83
the Trustee, the Holders and the Guarantors hereby irrevocably agree that the
obligations of such Guarantor will be limited to such maximum amount as will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.4. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.6, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless either:
(a) subject to Section 11.6 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by or surviving
any such consolidation or merger (if other than a Guarantor or the Company)
assumes all the obligations of that Guarantor under the Notes, this Indenture
(including its Subsidiary Guarantee) and the Registration Rights Agreement on
the terms set forth herein or therein pursuant to a supplemental indenture in
the form of Exhibit E attached hereto; or
(b) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this Indenture.
In case of any such consolidation, merger, sale or other
disposition and upon the assumption by the successor Person, by supplemental
indenture in the form of Exhibit E attached hereto, executed and delivered to
the Trustee, of the Subsidiary Guarantee and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
All the Subsidiary Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
Except as set forth in Articles 4 and 5 hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of a Guarantor
with or into the Company or another Guarantor, or shall prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an
entirety to the Company or another Guarantor.
84
Section 11.5. Releases of Subsidiary Guarantee.
The Subsidiary Guarantee of a Guarantor will be released and
the Guarantor will be relieved of any obligations under the Notes, this
Indenture and the Registration Rights Agreement:
(a) in connection with any sale or other disposition of all or
substantially all of the assets of that Guarantor (including by way of merger or
consolidation) to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the sale or other disposition
complies with Section 4.10;
(b) in connection with any sale of all of the Capital Stock of
a Guarantor to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of the Company, if the sale complies with Section
4.10;
(c) if the Company designates any Restricted Subsidiary that
is a Guarantor as an Unrestricted Subsidiary in accordance with the applicable
provisions of this Indenture; or
(d) upon the release, termination or satisfaction of the
Guarantor's guarantee or assumption of certain other Indebtedness under Section
11.6 of this Indenture.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel together to the effect that all conditions
precedent set forth in this Section 11.5 to the release of the Subsidiary
Guarantee of a Guarantor have been satisfied, to the extent such conditions can
be satisfied as of such date, the Trustee shall execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its
Subsidiary Guarantee shall remain liable for the full amount of principal of and
interest on the Notes and for the other obligations of any Guarantor under this
Indenture as provided in this Article 11.
Section 11.6. Additional Subsidiary Guarantees.
If any Restricted Subsidiary of the Company that is not a
Guarantor (the "New Guarantor") guarantees, assumes or in any other manner
becomes liable with respect to Indebtedness of the Company or any Guarantor (the
"Other Indebtedness"), then the New Guarantor shall, within ten business days of
the date of the New Guarantor's guarantee or assumption of the Other
Indebtedness, execute and deliver to the Trustee a supplemental indenture in the
form of Exhibit E attached hereto pursuant to which the New Guarantor shall
become a Guarantor and guarantee the obligations of the Company under this
Indenture and the Notes. Concurrently with the execution and delivery of such
supplemental indenture, the Company shall deliver to the Trustee an Opinion of
Counsel and an Officers' Certificate to the effect that such supplemental
indenture has been duly authorized, executed and delivered by such New
Guarantor, and that, subject to the application of bankruptcy, insolvency,
moratorium, fraudulent conveyance or transfer or other similar laws relating to
creditors' rights generally and
85
to the principles of equity, whether considered in a proceeding at law or in
equity, and other customary exceptions, such New Guarantor's Subsidiary
Guarantee is a legal, valid and binding obligation of such New Guarantor,
enforceable against such New Guarantor in accordance with its terms and as to
such other matters as the Trustee may reasonably request. Upon the release,
termination or satisfaction of the New Guarantor's guarantee or assumption of
the Other Indebtedness, the New Guarantor's Subsidiary Guarantee shall
automatically be released and terminated. Upon request of the New Guarantor, the
Trustee will provide written evidence of such release and termination.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), such TIA-imposed duties
shall control.
Section 12.2. Notices.
Any notice or communication by the Company, any Guarantor or
the Trustee to the other is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company:
Cinemark USA, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Phone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
With a copy to:
Akin, Gump, Strauss, Xxxxx &
Xxxx, L.L.P.
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Phone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, P.C.
86
If to any Guarantor:
c/o the Company, at the address
noted above, with a copy as noted.
If to the Trustee:
The Bank of New York Trust Company
of Florida, N.A.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Phone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx,
Vice President
With a copy to:
Xxxxxx and Xxxxx, LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000-0000
Phone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
The Company, any Guarantor or the Trustee, by notice to the
other, may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery, in each case to the address shown above.
Notwithstanding the foregoing, notices to the Trustee shall only be effective
upon actual receipt thereof by the Trustee at the Corporate Trust Office of the
Trustee.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
87
Section 12.3. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 12.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.5 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.5 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) the opinion of such Person, that he or she has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(c) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 12.6. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
88
Section 12.7. No Personal Liability of Directors, Officers, Employees and
Others.
No past, present or future director, officer, employee, agent,
manager, incorporator, stockholder or other Affiliate of the Company or any
Guarantor, as such, shall have any liability for any obligations of the Company
or any Guarantor under any of the Notes or this Indenture or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
Section 12.8. Governing Law.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 12.9. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 12.10. Successors.
This Indenture shall inure to the benefit of and be binding
upon the parties hereto and each of their respective successors and assigns,
except that the Company may not assign this Indenture or its obligations
hereunder except as expressly permitted by Sections 5.1 and 5.2 and each of the
Guarantors may not assign this Indenture, the Subsidiary Guarantee or its
obligations hereunder except as expressly permitted by Section 11.4. Without
limiting the generality of the foregoing, this Indenture shall inure to the
benefit of all Holders from time to time. Except as set forth in Article 10 and
Section 11.2, nothing expressed or mentioned in this Indenture is intended or
shall be construed to give any Person, other than the parties hereto, their
respective successors and assigns, and the Holders, any legal or equitable
right, remedy or claim under or in respect of this Indenture or any provision
herein contained.
Section 12.11. Severability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
89
Section 12.12. Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 12.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
Section 12.14. Counterparts.
This Indenture may be signed in counterparts and by the
different parties hereto in separate counterparts, each of which shall
constitute an original and all of which together shall constitute one and the
same instrument.
[Signatures on following page]
90
IN WITNESS WHEREOF, the parties hereto have executed this
Indenture as of February 11, 2003.
CINEMARK USA, INC.
SUNNYMEAD CINEMA CORP.
CINEMARK MEXICO (USA), INC
CINEMARK INVESTMENTS CORPORATION
CINEMARK LEASING COMPANY
CINEMARK PARADISO, INC.
CINEMARK PARTNERS I, INC.
CINEMARK PROPERTIES, INC.
MISSOURI CITY CENTRAL 6, INC.
MULTIPLEX SERVICES, INC.
TRANS TEXAS CINEMA, INC.
CINEMARK, L.L.C.
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President-General Counsel
CNMK INVESTMENTS, INC.
MULTIPLEX PROPERTIES, INC.
CNMK DELAWARE INVESTMENTS I, L.L.C.
CNMK DELAWARE INVESTMENTS II, L.L.C.
By:
----------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
CNMK DELAWARE INVESTMENT
PROPERTIES, L.P., by CNMK Delaware
Investments I, L.L.C., its general partner
By:
----------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Secretary
91
LAREDO THEATRE, LTD.,
by CNMK TEXAS PROPERTIES, LTD., its
general partner,
by Sunnymead Cinema Corp., the general
partner of CNMK Texas Properties, Ltd.,
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President-General Counsel
CNMK TEXAS PROPERTIES, LTD.
by Sunnymead Cinema Corp., its general
partner,
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President-General Counsel
00
XXX XXXX XX XXX XXXX TRUST COMPANY
OF FLORIDA, N.A.
as Trustee
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
93
