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FAIRFIELD MANUFACTURING COMPANY, INC., as Issuer
and
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
INDENTURE
Dated as of March 12, 1997
$125,000,000
11-1/4% Subordinated Exchange Debentures due 2009
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CROSS-REFERENCE TABLE
TIA
Indenture
Section Section
310(a)(1)..............................................................................................7.10
(a)(2)..............................................................................................7.10
(a)(3)..............................................................................................N.A.
(a)(4)..............................................................................................N.A.
(b)....................................................................................7.08; 7.10; 11.02
(b)(1)..............................................................................................7.10
(b)(9)..............................................................................................7.10
(c).................................................................................................N.A.
311(a)................................................................................................ 7.11
(b)................................................................................................ 7.11
(c).................................................................................................N.A.
312(a)................................................................................................ 2.05
(b)................................................................................................11.03
(c)................................................................................................11.03
313(a)................................................................................................ 7.06
(b)(1)..............................................................................................7.06
(b)(2)..............................................................................................7.06
(c)................................................................................................11.02
(d).................................................................................................7.06
314(a)....................................................................................4.02; 4.04; 11.02
(b)................................................................................................11.02
(c)(1)...............................................................................12.02; 11.04; 11.05
(c)(2)...............................................................................12.02; 11.04; 11.05
(c)(3)..............................................................................................N.A.
(d)................................................................................................11.02
(e).........................................................................................11.03; 11.05
(f).................................................................................................N.A.
315(a)...........................................................................................7.01; 7.02
(b)..........................................................................................7.05; 11.02
(c).................................................................................................7.01
(d).....................................................................................6.05; 7.01; 7.02
(e).................................................................................................6.11
316(a)(last sentence).................................................................................11.06
(a)(1)(A)...........................................................................................6.05
(a)(1)(B)...........................................................................................6.04
(a)(2)..............................................................................................8.02
(b).................................................................................................6.07
(c).................................................................................................8.04
317(a)(1)..............................................................................................6.08
(a)(2)..............................................................................................6.09
(b).................................................................................................7.12
318(a)................................................................................................11.01
N.A. means Not Applicable
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NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions................................................................1
Section 1.02. Other Definitions.........................................................26
Section 1.03. Incorporation by Reference of Trust
Indenture Act...........................................................27
Section 1.04. Rules of Construction.....................................................28
ARTICLE 2
THE SECURITIES
Section 2.01. Dating; Incorporation of Form in
Indenture...............................................................28
Section 2.02. Execution and Authentication..............................................29
Section 2.03. Registrar and Paying Agent................................................30
Section 2.04. Paying Agent To Hold Money in Trust.......................................31
Section 2.05. Securityholder Lists......................................................31
Section 2.06. Transfer and Exchange.....................................................31
Section 2.07. Replacement Securities....................................................32
Section 2.08. Outstanding Securities....................................................33
Section 2.09. Temporary Securities......................................................33
Section 2.10. Cancellation..............................................................33
Section 2.11. Defaulted Interest........................................................34
Section 2.12. Deposit of Moneys.........................................................34
Section 2.13. CUSIP Number..............................................................34
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee........................................................35
Section 3.02. Selection by Trustee of Securities
To Be Redeemed..........................................................35
Section 3.03. Notice of Redemption......................................................36
Section 3.04. Effect of Notice of Redemption............................................36
Section 3.05. Deposit of Redemption Price...............................................37
Section 3.06. Securities Redeemed in Part...............................................37
ARTICLE 4
COVENANTS
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Section 4.01. Payment of Securities.....................................................38
Section 4.02. SEC Reports...............................................................38
Section 4.03. Waiver of Stay, Extension or Usury Laws...................................39
Section 4.04. Compliance Certificate....................................................39
Section 4.05. Taxes.....................................................................40
Section 4.06. Limitation on Incurrence of
Additional Indebtedness.................................................40
Section 4.07. Limitation on Preferred Stock Capital of
Restricted Subsidiaries.................................................40
Section 4.08. Limitation on Restricted Payments.........................................41
Section 4.09. Limitation on Asset Sales.................................................43
Section 4.10. Limitation on Transactions
with Affiliates.........................................................45
Section 4.11. Limitations on Dividends and Other
Payment Restrictions Affecting
Subsidiaries............................................................47
Section 4.12. Limitations on Guarantees by Restricted
Subsidiaries............................................................47
Section 4.13. Payments for Consent......................................................48
Section 4.14. Corporate Existence.......................................................49
Section 4.15. Change of Control.........................................................49
Section 4.16. Maintenance of Office or Agency...........................................52
Section 4.17. Maintenance of Properties and Insurance...................................52
ARTICLE 5
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation,
Merger and Sale of Assets...............................................53
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Section 5.02. Successor Person Substituted..............................................54
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.........................................................54
Section 6.02. Acceleration..............................................................56
Section 6.03. Other Remedies............................................................57
Section 6.04. Waiver of Past Defaults and
Events of Default.......................................................58
Section 6.05. Control by Majority.......................................................58
Section 6.06. Limitation on Suits.......................................................58
Section 6.07. Rights of Holders To Receive Payment......................................59
Section 6.08. Collection Suit by Trustee................................................59
Section 6.09. Trustee May File Proofs of Claim..........................................59
Section 6.10. Priorities................................................................60
Section 6.11. Undertaking for Costs.....................................................61
Section 6.12. Restoration of Rights and Remedies........................................61
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.........................................................61
Section 7.02. Rights of Trustee.........................................................63
Section 7.03. Individual Rights of Trustee..............................................63
Section 7.04. Trustee's Disclaimer......................................................64
Section 7.05. Notice of Defaults........................................................64
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Section 7.06. Reports by Trustee to Holders.............................................64
Section 7.07. Compensation and Indemnity................................................64
Section 7.08. Replacement of Trustee....................................................66
Section 7.09. Successor Trustee by Consolidation,
Merger or Conversion....................................................67
Section 7.10. Eligibility; Disqualification.............................................67
Section 7.11. Preferential Collection of Claims
Against Company.........................................................67
Section 7.12. Paying Agents.............................................................67
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders................................................68
Section 8.02. With Consent of Holders...................................................69
Section 8.03. Compliance with Trust Indenture Act.......................................70
Section 8.04. Revocation and Effect of Consents.........................................70
Section 8.05. Notation on or Exchange of Securities.....................................71
Section 8.06. Trustee To Sign Amendments, etc...........................................71
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture....................................................72
Section 9.02. Legal Defeasance..........................................................73
Section 9.03. Covenant Defeasance.......................................................73
Section 9.04. Conditions to Defeasance or Covenant
Defeasance..............................................................73
Section 9.05. Deposited Money and U.S. Government
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Page
Obligations To Be Held in Trust;
Other Miscellaneous Provisions..........................................75
Section 9.06. Reinstatement.............................................................76
Section 9.07. Moneys Held by Paying Agent...............................................76
Section 9.08. Moneys Held by Trustee....................................................76
ARTICLE 10
SUBORDINATION OF SECURITIES
Section 10.01. Securities Subordinate to Senior
Debt....................................................................77
Section 10.02. Payment Over of Proceeds upon
Dissolution, etc........................................................78
Section 10.03. Suspension of Payment When Senior
Debt in Default.........................................................79
Section 10.04. Trustee's Relation to Senior
Debt....................................................................82
Section 10.05. Subrogation to Rights of Holders
of Senior Debt..........................................................82
Section 10.06. Provisions Solely To Define Relative
Rights..................................................................82
Section 10.07. Trustee to Effectuate Subordination.......................................83
Section 10.08. No Waiver of Subordination Provisions.....................................84
Section 10.09. Notice to Trustee.........................................................84
Section 10.10. Reliance on Judicial Order or
Certificate of Liquidating Agent........................................85
Section 10.11. Rights of Trustee as a Holder of
Senior Debt; Preservation of
Trustee's Rights........................................................86
Section 10.12. Article Applicable to Paying Agents.......................................86
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Section 10.13. No Suspension of Remedies.................................................86
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls..............................................86
Section 11.02. Notices...................................................................87
Section 11.03. Communications by Holders with
Other Holders...........................................................88
Section 11.04. Certificate and Opinion as to
Conditions Precedent....................................................88
Section 11.05. Statements Required in Certificate
and Opinion.............................................................88
Section 11.06. When Treasury Securities Disregarded......................................89
Section 11.07. Rules by Trustee and Agents...............................................89
Section 11.08. Business Days; Legal Holidays.............................................89
Section 11.09. Governing Law.............................................................90
Section 11.10. No Adverse Interpretation of
Other Agreements........................................................90
Section 11.11. No Recourse Against Others................................................90
Section 11.12. Successors................................................................91
Section 11.13. Multiple Counterparts.....................................................91
Section 11.14. Table of Contents, Headings, etc..........................................91
Section 11.15. Separability..............................................................91
EXHIBITS
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Exhibit A. Form of Security A-1
Exhibit B. Terms of Guarantee B-1
Exhibit C. Form of Guarantee C-1
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INDENTURE, dated as of March 12, 1997, between FAIRFIELD
MANUFACTURING COMPANY, INC., a Delaware corporation, as Issuer (the "Company"),
and UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
11-1/4% Subordinated Exchange Debentures due 2009 and any Secondary Securities
(as hereinafter defined) (collectively, the Securities").
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a)
assumed in connection with an Asset Acquisition from such Person or (b) existing
at the time such Person becomes a Subsidiary of any other Person.
"Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations promulgated thereunder.
"Adjusted Net Assets" of a Guarantor at any date shall mean
the lesser of the amount by which (x) the fair value of the property of such
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities (including, without limitation, any guarantees of Senior
Debt)), but excluding liabilities under the Guarantee, of such Guarantor at such
date and (y) the present fair salable value of the assets of such Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities (including, without limitation, any guarantees of Senior
Debt) and after giving effect to any collection from any Subsidiary of such
Guarantor in respect of the obligations of such Subsidiary under the Guarantee),
excluding Indebtedness in respect of the Guarantee, as they become absolute and
matured.
"Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or
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controlled by or under direct or indirect common control with such specified
Person.
"Agent" means any Registrar, Paying Agent or agent for
service of notices and demands.
"Asset Acquisition" means (a) an Investment by the Company or
any Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Restricted Subsidiary of the Company, or shall be merged with or
into the Company or any Restricted Subsidiary of the Company, or (b) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person which constitute all or substantially all of the assets of
such Person or any division or line of business of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer,
lease or other disposition to any Person other than the Company or a
Wholly-Owned Restricted Subsidiary of the Company, in one or a series of related
transactions, of: (a) any Capital Stock of any Restricted Subsidiary of the
Company; (b) all or substantially all of the properties and assets of any
division or line of business of the Company or any Restricted Subsidiary of the
Company; or (c) any other properties or assets of the Company or a Restricted
Subsidiary (including proprietary brand names, whether registered or otherwise)
other than in the ordinary course of business (it being understood that the sale
or lease of any used or obsolete equipment is in the ordinary course of
business). For the purposes of this definition, the term "Asset Sale" shall not
include (i) any sale, issuance, conveyance, transfer, lease or other disposition
of properties or assets that is governed by the provisions described under
Section 5.01 and (ii) any sale, issuance, conveyance, transfer, lease or other
disposition of properties or assets, whether in one transaction or a series of
related transactions, involving assets with a fair market value determined by
the Company to be not in excess of $1,000,000.
"Board of Directors" means the board of directors of the
Company or any committee authorized to act therefor.
"Board Resolution" means a copy of a resolution certified
pursuant to an Officers' Certificate to have been duly adopted by the Board of
Directors of the Company and to be in full force and effect and delivered to the
Trustee.
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"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock, including each class of common stock and
preferred stock of such Person and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests.
"Capitalized Lease Obligations" means any obligation under a
lease of (or other agreement conveying the right to use) any property (whether
real, personal or mixed) that is required to be classified and accounted for as
a capital lease obligation under GAAP; and, for the purpose of this definition,
the amount of such obligation at any date shall be the capitalized amount
thereof at such date, determined in accordance with GAAP consistently applied.
"Cash Equivalents" means, at any time: (i) any evidence of
Indebtedness with a maturity of 180 days or less issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit,
time deposits, Eurodollar time deposits and bankers' acceptances with a maturity
of 180 days or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits at the
time of investment of not less than $500,000,000; (iii) commercial paper with a
maturity of 180 days or less issued by a corporation that is not an Affiliate of
the Company organized under the laws of any state of the United States or the
District of Columbia and rated at the time of investment at least A-1 by S&P or
at least P-1 by Xxxxx'x or at least an equivalent rating category of another
nationally recognized securities rating agency; and (iv) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the government of the United States of
America or issued by any agency thereof and backed by the full faith and credit
of the United States of America, in each case maturing within 180 days from the
date of acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
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"Change of Control" means the occurrence of any of the
following events: (a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), excluding Permitted Holders, is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company; (b) the Company consolidates with, or merges with or into, another
person or sells, assigns, conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person, or any person consolidates
with, or merges with or into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is converted
into or exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is converted
into or exchanged for (1) Voting Stock (other than Disqualified Capital Stock)
of the surviving or transferee corporation or (2) cash, securities and other
property in an amount which could be paid by the Company as a Restricted Payment
under this Indenture and (ii) immediately after such transaction no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), excluding Permitted Holders, is the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
Voting Stock of the surviving or transferee corporation; or (c) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of 66 2/3% of
the directors then still in office who were either directors at the beginning of
such period or persons whose election as directors or nomination for election
was previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office.
-5-
"Common Stock" means, with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such Person's common stock,
whether outstanding at the Issue Date or issued after the Issue Date, and
includes, without limitation, all series and classes of such common stock.
"Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces such party pursuant to Article 5 of
this Indenture and thereafter means the successor.
"Company Request" means any written request signed in the name
of the Company by any two of the following: the Chief Executive Officer; the
Chief Operating Officer; the President; any Vice President; the Chief Financial
Officer; the Treasurer; or the Secretary or any Assistant Secretary (but not
both the Secretary and any Assistant Secretary) of the Company.
"Consolidated EBITDA" means, with respect to any Person for
any period, (i) the sum of, without duplication, the amount for such period,
taken as a single accounting period, of (a) Consolidated Net Income, (b)
Consolidated Non-cash Charges, (c) Consolidated Interest Expense, (d)
Consolidated Income Tax Expense and (e) all non-cash accruals or cash expenses
relating to the New Equity Incentive Plan (to the extent such accruals or
expenses reduce net income), less (ii) non-cash items increasing Consolidated
Net Income (other than in the ordinary course of business); provided, however,
that if, during such period, such person or any of its Restricted Subsidiaries
shall have consummated any Asset Sale or Asset Acquisition, Consolidated EBITDA
for such person and its Restricted Subsidiaries for such period shall be
adjusted (in the manner set forth in the definition of the term "Consolidated
Fixed Charge Coverage Ratio") to give pro forma effect to the Consolidated
EBITDA directly attributable to the assets which are the subject of such Asset
Sales or Asset Acquisitions during such period.
"Consolidated Fixed Charge Coverage Ratio" means, with respect
to any Person, the ratio of the aggregate amount of Consolidated EBITDA of such
Person for the four full fiscal quarters for which financial information in
respect thereof is available immediately preceding the date of the transaction
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(the "Transaction Date") giving rise to the need to calculate the Consolidated
Fixed Charge Coverage Ratio (such four full fiscal quarter period being referred
to herein as the "Four Quarter Period") to the aggregate amount of Consolidated
Fixed Charges of such person for the Four Quarter Period. In addition to and
without limitation of the foregoing, for purposes of this definition
"Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after
giving effect on a pro forma basis for the period of such calculation to,
without duplication, (a) the incurrence of any Indebtedness of such Person or
any of its Restricted Subsidiaries, or the repayment of any Indebtedness of such
person or its Restricted Subsidiary (other than the incurrence and repayment of
Indebtedness under a revolving credit facility) during the period commencing on
the first day of the Four Quarter Period to and including the Transaction Date
(the "Reference Period"), including, without limitation, the incurrence of the
Indebtedness giving rise to the need to make such calculation, as if such
incurrence occurred on the first day of the Reference Period, and (b) any Asset
Sales or Asset Acquisitions (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of such
person or one of its Restricted Subsidiaries (including any person who becomes a
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness) occurring during the Reference
Period, as if such Asset Sale or Asset Acquisition occurred on the first day of
the Reference Period. Furthermore, in calculating "Consolidated Fixed Charges"
for purposes of determining the denominator (but not the numerator) of this
"Consolidated Fixed Charge Coverage Ratio," (i) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Transaction Date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the Transaction Date, (ii) if interest on any
Indebtedness actually incurred on the Transaction Date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the Transaction Date will be deemed to have been in effect during the
Reference Period; (iii) notwithstanding clauses (i) and (ii) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by Interest Rate Agreements, shall be deemed to have accrued at the rate
per annum resulting after
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giving effect to the operation of such agreements and (iv) interest on any
Indebtedness incurred pursuant to a revolving credit facility shall be based on
the average daily principal amount outstanding under such facility during such
Four Quarter Period. In calculating the Consolidated Fixed Charge Coverage
Ratio, and giving pro forma effect to any incurrence of Indebtedness during a
Reference Period, pro forma effect shall be given to the use of proceeds thereof
to permanently repay or retire Indebtedness. If such person or any of its
Restricted Subsidiaries directly or indirectly guaranteed Indebtedness or a
third person, the above clauses shall give effect to the incurrence of such
guaranteed Indebtedness as if such person or such Restricted Subsidiary had
directly incurred or otherwise assumed such guaranteed Indebtedness.
"Consolidated Fixed Charges" means, with respect to any Person
for any period, the sum of, without duplication, the amounts for such period of
(i) Consolidated Interest Expense and (ii) the aggregate amount of cash
dividends and other distributions paid or accrued during such period in respect
of Disqualified Capital Stock of such Person and its Restricted Subsidiaries on
a consolidated basis; provided, however, that if, during such period, such
Person or any of its Restricted Subsidiaries shall have made any Asset Sales or
Asset Acquisitions, Consolidated Fixed Charges for such Person and its
Restricted Subsidiaries for such period shall be adjusted (in the manner set
forth in the definition of the term "Consolidated Fixed Charge Coverage Ratio")
to give pro forma effect to the Consolidated Fixed Charges directly attributable
to the assets which are the subject of such Asset Sales or Asset Acquisitions
during such period.
"Consolidated Income Tax Expense" means, with respect to any
Person for any period, the provision for federal, state, local and foreign
income taxes of such Person and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the (i) sum of (a) the interest
expense of such person and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP consistently applied,
including, without limitation, (1)
any amortization of debt discount, (2) the net cost under Interest Rate
Agreements (including any
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amortization of discounts), (3) the interest portion of any deferred payment
obligation which in accordance with GAAP is required to be reflected on an
income statement, (4) all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, and (5) all
accrued interest and (b) the interest component of Capitalized Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such person and its
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP consistently applied, minus (ii) any non-cash interest
expense of the Company in respect of Permitted Indebtedness incurred in
connection with the New Equity Incentive Plan, minus (iii) any amortization of
deferred financing costs and expenses.
"Consolidated Net Income" means, with respect to any Person,
for any period, the consolidated net income (or loss) of such Person and its
Restricted Subsidiaries for such period as determined in accordance with GAAP
consistently applied adjusted, (A) to the extent included in calculating such
net income, by excluding, without duplication, (i) all extraordinary gains or
losses (net of fees and expenses relating to the transaction giving rise
thereto) and the non-recurring cumulative effect of accounting changes, (ii) the
portion of net income (or loss) of such person and its Restricted Subsidiaries
allocable to minority interests in unconsolidated Persons to the extent that
cash dividends or distributions have not actually been received by such person
or one of its Restricted Subsidiaries, (iii) net income (or loss) of any Person
combined with such Person or one of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(iv) one time unusual non-cash charges, (v) any gain or loss realized upon the
termination of any employee pension benefit plan, on an after-tax basis, (vi)
gains or losses in respect of any Asset Sales by such person or one of its
Restricted Subsidiaries (net of fees and expenses relating to the transaction
giving rise thereto), on an after-tax basis, (vii) the net income of any
Restricted Subsidiary of such person to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is not at the time permitted, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulations applicable to that Subsidiary or its
stockholders and (viii) the amount of any Consolidated Non-
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cash Charges of such person attributable to the purchase method of accounting
treatment in accordance with Accounting Principles Board Opinion No. 16 dated
August 1970, entitled "Business Combinations" and (B) by adding, in the case of
the Company, (i) without duplication, capital contributions made by Lancer to
the Company pursuant to the Tax Sharing Agreement to the extent such capital
contributions represent a return to the Company of amounts which had been
included as income taxes in computing the Company's Consolidated Net Income and
(ii) for purposes of determining the Company's ability to make Restricted
Payments pursuant to Section 4.08, 100% (without duplication) of all non-cash
accruals or cash expenses relating to the New Equity Incentive Plan (to the
extent such accruals or expenses reduce net income).
"Consolidated Non-cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and other
non-cash expenses (including, without limitation, non-cash reserves and non-cash
charges) of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such person and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied.
"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Credit Agreement" means (a) the GE Credit Agreement, together
with all amendments, documents and instruments from time to time delivered in
connection with the GE Credit Agreement (including, without limitation, any
guaranty agreements and security documents), as in effect on the date hereof
and, subject to the proviso to the next succeeding sentence, as the GE Credit
Agreement and such other agreements, documents and instruments may be amended,
amended and restated, renewed, extended, restructured, supplemented or otherwise
modified from time to time, and (b) any credit agreement, loan agreement, note
purchase agreement, indenture or other agreement, document or instrument
refinancing, refunding or otherwise replacing the GE Credit Agreement or any
other agreement deemed a Credit Agreement under clause (a) or (b) hereof,
whether or not with the same agent, trustee, representative lenders or holders,
and, subject to the proviso
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to the next succeeding sentence, irrespective of any changes in the terms and
conditions thereof. Without limiting the generality of the foregoing, the term
"Credit Agreement" shall include any amendment, amendment and restatement,
renewal, extension, restructuring, supplement or modification to any Credit
Agreement and all refundings, refinancings and replacements of any Credit
Agreement, including any agreement (i) extending the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding or
deleting borrowers or guarantors thereunder, so long as borrowers and issuers
include one or more of the Company and its Subsidiaries and their respective
successors and assigns, and (iii) increasing the amount of Indebtedness incurred
thereunder or available to be borrowed thereunder, provided that on the date
thereof such Indebtedness would not be prohibited under this Indenture.
"Default" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"Depository" means, with respect to the Securities issued in
the form of one or more "Global" Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which Person must be a
clearing agency registered under the Exchange Act.
"Designated Senior Debt" means (i) all Senior Debt under the
Credit Agreement, (ii) Indebtedness in respect of the Existing Notes, and (iii)
any other Senior Debt which (a) at the time of determination exceeds $10,000,000
in aggregate principal amount and (b) is specifically designated by the Company
in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the
Company.
"Disqualified Capital Stock" means any Capital Stock which, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder thereof, in whole
or in part, on or prior to the final maturity date of the Securities. Without
limitation of the foregoing, Disqualified Capital Stock shall be deemed to
include (i) any Preferred
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Capital Stock of a Restricted Subsidiary of the Company and (ii) any Preferred
Capital Stock of the Company, with respect to either of which, under the terms
of such Preferred Capital Stock, by agreement or otherwise, such Restricted
Subsidiary or the Company is obligated to pay current dividends or distributions
in cash during the period prior to the redemption date of the Exchangeable
Preferred Stock or the maturity date of the Securities; and (iii) as long as the
Exchangeable Preferred Stock remains outstanding, Senior Stock and Parity Stock.
Notwithstanding anything in this definition to the contrary, that Preferred
Capital Stock of the Company or any Restricted Subsidiary thereof that is issued
with the benefit of provision requiring a change of control offer to be made for
such Preferred Capital Stock in the event of a change of control of the Company
or Restricted Subsidiary, which provisions have substantially the same effect as
the provisions of this Indenture described under Section 4.15 shall not be
deemed to be Disqualified Capital Stock solely by virtue of such provisions.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time and the rules and regulations promulgated thereunder.
"Exchange Date" means the date of original issuance of
the Securities.
"Exchangeable Preferred Stock" means the 11-1/4% Exchangeable
Preferred Stock, par value $.01 per share and a liquidation preference of $1,000
per share, or shares of Preferred Capital Stock issued in exchange therefor.
"Existing Indenture" means the indenture pursuant to which the
Existing Notes were issued.
"Existing Notes" means the Company's 11 3/8% Senior
Subordinated Notes due 2001.
"Event of Default" has the meaning set forth in Section
6.01 of this Indenture.
"Four Quarter Period" has the meaning set forth in the
definition of Consolidated Fixed Charge Coverage Ratio.
"GAAP" means generally accepted accounting principles in the
United States set forth in the Statements of Financial Accounting Standards and
Interpretations, Accounting
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Principles Board Opinions and AICPA Accounting Research Bulletins which are
applicable as of the Issue Date.
"GE Credit Agreement" means the Credit Agreement, dated as of
July 7, 1993, as amended from time to time, among the Company, T-H Licensing,
Inc., as guarantor, the lenders named therein and General Electric Capital
Corporation, as agent for such lenders.
"Guarantee" has the meaning set forth in Section 4.12 of
this Indenture.
"guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantor" means the issuer at any time of a Guarantee (so
long as such a Guarantee remains outstanding).
"Guarantor Senior Debt" means the principal of, premium, if
any, and interest on any Indebtedness of a Guarantor, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness is pari passu with or subordinated in right of payment to the
Securities. Without limiting the generality of the foregoing, "Guarantor Senior
Debt" shall also include (i) all obligations of the Guarantor, whether
outstanding on the Issue Date or thereafter created, incurred or assumed, under
or in respect of the Credit Agreement, whether for principal, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding under any state or federal bankruptcy law whether or
not such interest is an allowable claim), reimbursement of amounts drawn under
letters of credit issued or arranged for pursuant thereto, guarantees in respect
thereof, and all charges, fees, expenses (including reasonable
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fees and expenses of counsel) and other amounts in respect of the Credit
Agreement incurred by or owing to the lenders under the Credit Agreement or
their representative, agent or trustee, and all other obligations of the
Guarantor incurred under or in respect of the Credit Agreement (including,
without limitation, any Interest Rate Agreements and in respect of premiums,
indemnities or otherwise, and all indebtedness under the Credit Agreement which
is disallowed, avoided or subordinated pursuant to Xxxxxxx 000 xx Xxxxx 00,
Xxxxxx Xxxxxx Code or any applicable state fraudulent conveyance law) and (ii)
all obligations of the Guarantor under, or in respect of, the Existing Notes and
the Existing Indenture. Notwithstanding the foregoing, "Guarantor Senior Debt"
shall not include (a) Indebtedness evidenced by the Securities, (b) Indebtedness
that is expressly subordinate or junior in right of payment to any Guarantor
Senior Debt of the Guarantor, (c) Indebtedness which, when incurred and without
respect to any election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code,
is by its terms without recourse to the Guarantor, (d) any repurchase,
redemption or other obligation in respect of Disqualified Capital Stock, (e) to
the extent it might constitute Indebtedness, amounts owing for goods, materials
or services purchased in the ordinary course of business or consisting of trade
payables or other current liabilities (other than any current liabilities owing
under the Credit Agreement or the current portion of any long-term Indebtedness
which would constitute Guarantor Senior Debt but for the operation of this
clause (e)), (f) to the extent it might constitute Indebtedness, amounts owed by
the Guarantor for compensation to employees or for services rendered to the
Guarantor, (g) to the extent it might constitute Indebtedness, any liability for
federal, state, local or other taxes owed or owing by the Guarantor, (h)
Indebtedness of the Guarantor to a Subsidiary of such Guarantor or any other
Affiliate of such Guarantor or any of such Affiliate's Subsidiaries and (i) that
portion of any Indebtedness which at the time of issuance is issued in violation
of this Indenture (but, as to any such Indebtedness, no such violation of this
Indenture shall be deemed to exist for purposes of this clause (i) if the
holder(s) of such Indebtedness or their representative or the Company shall have
furnished to the Trustee an Opinion of Counsel, unqualified in all material
respects, addressed to the Trustee (which legal counsel may, as to matters of
fact, rely upon an Officers' Certificate of such Guarantor) to the effect that
the incurrence of such Indebtedness does not violate the provisions of this
Indenture).
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"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording (other than previously
recorded), as required pursuant to GAAP or otherwise, of any such Indebtedness
or other obligation on the balance sheet of such Person (and "incurrence,"
"incurred," "incurrable," and "incurring" shall have meanings correlative to the
foregoing); provided that a change in GAAP that results in an obligation of such
Person that exists at such time becoming Indebtedness shall not be deemed an
incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all liabilities of such Person for borrowed money or for the
deferred purchase price of property or services, excluding any trade payables
and other accrued current liabilities incurred in the ordinary course of
business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit, banker's
acceptance or other similar credit transaction, (b) all obligations of such
Person evidenced by bonds, notes, debentures or other similar instruments, (c)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade accounts payable arising in the ordinary course of business, (d)
all Capitalized Lease Obligations of such Person, (e) all Indebtedness referred
to in the preceding clauses of other Persons and all dividends of other Persons,
the payment of which is secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
property (including, without limitation, accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness (the amount of such obligations being deemed to be
the lesser of the value of such property or asset or the amount of the
obligation so secured), (f) all guarantees of Indebtedness referred to in this
definition by such Person, (g) all Disqualified Capital Stock valued at the
greater of its
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voluntary or involuntary maximum fixed repurchase price plus accrued dividends,
(h) all obligations under or in respect of currency exchange contracts and
Interest Rate Agreements of such Person and (i) any amendment, supplement,
modification, deferral, renewal, extension or refunding of any liability of the
types referred to in clauses (a) through (h) above. For purposes hereof, (x) the
"maximum fixed repurchase price" of any Disqualified Capital Stock which does
not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock
were purchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock, such fair
market value shall be determined in good faith by the board of directors of the
issuer of such Disqualified Capital Stock, and (y) Indebtedness is deemed to be
incurred pursuant to a revolving credit facility each time an advance is made
thereunder; provided, however, that, with respect to the Company, Indebtedness
referred to in this definition shall exclude all obligations of the Company to
Lancer under the Tax Sharing Agreement and any liability for federal, state,
local or other taxes owed or owing by the Company.
"Indenture" means this Indenture as amended, restated or
supplemented from time to time.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Interest Rate Agreement" means the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit, guarantee 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
-16-
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by, any other
Person. For the purpose of making any calculations under this Indenture (i)
Investment shall include the fair market value of the net assets of any
Subsidiary at the time that such Subsidiary is designated an Unrestricted
Subsidiary and shall exclude the fair market value of the net assets of any
Unrestricted Subsidiary that is designated a Restricted Subsidiary and (ii) any
property, transferred to or from an Unrestricted Subsidiary shall be valued at
fair market value at the time of such transfer; provided that in each case, the
fair market value of an asset or property shall be as determined by the Board of
Directors of the Company in good faith. For the purpose of this Indenture, the
change in designation of a Restricted Subsidiary to an Unrestricted Subsidiary
shall be an Investment. "Investments" shall exclude extensions of trade credit
on commercially reasonable terms consistent with the normal course of business
of the Company and the Restricted Subsidiaries.
"Issue Date" means the date of original issuance of the
Exchangeable Preferred Stock.
"Lancer" means Lancer Industries Inc., a Delaware
corporation.
"Lien" means any mortgage, charge, pledge, lien (statutory or
other), security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance upon or with respect to any property
of any kind. A Person shall be deemed to own subject to a Lien any property
which such Person has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement.
"Maturity Date" means March 15, 2009.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are
-17-
financed or sold with recourse to the Company or any Restricted Subsidiary of
the Company) net of (i) brokerage commissions and other fees and expenses
(including, without limitation, fees and expenses of legal counsel and
investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) amounts required to be paid and
which have been paid, or amounts required to be pledged and which are pledged to
secure Indebtedness owed to any Person (other than the Company or any Restricted
Subsidiary of the Company) owning a beneficial interest in the assets subject to
the Asset Sale (which, in the case of a Lien, is being pledged to permanently
reduce Indebtedness secured by such Lien) and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary of the Company, as the case
may be, as a reserve required in accordance with GAAP consistently applied
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary of the Company, as the case may be, after
such Asset Sale, 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 Sale, all as reflected in an Officers' Certificate delivered to the
Trustee.
"New Equity Incentive Plan" means any long-term incentive
compensation plan adopted by the Company covering the Company's executives and
selected other key management employees.
"Non-Payment Event of Default" means any event (other than a
Payment Default) the occurrence of which entitles one or more Persons to
accelerate the maturity of any Designated Senior Debt.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating to,
Indebtedness.
"Officer" means the Chief Executive Officer, the Chief
Operating Officer, the President, any Vice President, the Chief Financial
Officer, the Treasurer, the Controller or the Secretary of the Company or any
other officer designated by the Board of Directors, as the case may be.
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"Officers' Certificate" means, with respect to any Person
other than the Trustee, a certificate signed by the Chief Executive Officer, the
Chief Operating Officer, the President or any Vice President and the Chief
Financial Officer, the Controller or any Treasurer of such Person that shall
comply with applicable provisions of this Indenture and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from legal
counsel which counsel and opinion are reasonably acceptable to the Trustee.
"Payment Default" means any Default, whether or not any
requirement for the giving of notice, the lapse of time or both, or any other
condition to such Default becoming an Event of Default has occurred, in the
payment of principal of (or premium, if any) or interest on or any other amount
payable in connection with Designated Senior Debt.
"Permitted Holders" means (i) Lancer and its Affiliates and
(ii) any "group" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) comprised solely of Lancer and its Affiliates (it being understood
that a "group" that includes any other Person shall not be a Permitted Holder).
"Permitted Indebtedness" means each and all of the
following:
(1) Indebtedness of the Company or any Guarantor under the
Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed the greater of (x) $58,000,000, less the
amount of any scheduled principal payments actually made (excluding,
without limitation, any prepayments required to be made based upon the
Company's excess cash flow) or the amount of any other payments which
are applied or credited against scheduled principal payments on the
date such scheduled principal payments would otherwise have been made
(except to the extent refinanced under a replacement Credit Agreement
at the time of the respective repayment) by the Company or any
Guarantor in respect of any term loans under the Credit Agreement and
the amount by which the aggregate commitment under any revolving credit
facility under the Credit Agreement at any time has been permanently
reduced to the extent that any repayments
-19-
required to be made in connection with effecting such permanent
reduction have been made (it being understood that to the extent a
reduction in commitments under any revolving credit facility under the
Credit Agreement arises solely in connection with a refinancing of
outstanding amounts under such revolving credit facility with
borrowings under a replacement Credit Agreement and the commitments
under the Credit Agreement are thereby replaced with commitments under
such replacement Credit Agreement such a permanent reduction shall not
have occurred); provided, however, that the Company or any Guarantor
shall be permitted to incur an additional amount of Indebtedness not to
exceed $15,000,000 under its revolving credit facility if the borrowing
base requirement under such facility permits such incurrence and (y)
the amount equal to the sum of 80% of the net book value of accounts
receivable and 60% of the net book value of inventory (determined on a
first-in-first-out basis) of the Company and its Restricted
Subsidiaries on a consolidated basis at the time such Indebtedness is
incurred, as determined in accordance with GAAP;
(2) Indebtedness of the Company and its Restricted
Subsidiaries pursuant to the Existing Notes and the Existing
Indenture;
(3) Indebtedness of the Company and its Restricted
Subsidiaries pursuant to the Securities and this Indenture;
(4) Indebtedness of the Company outstanding on the date
of this Indenture;
(5) Interest Rate Agreements of the Company or any Guarantor
covering Indebtedness of the Company or any such Guarantor; provided,
however, that (i) any Indebtedness to which any such Interest Rate
Agreement relates bears interest at fluctuating interest rates and is
otherwise permitted to be incurred under this covenant and (ii) the
notional amount of any such Interest Rate Agreement does not exceed the
principal amount of the Indebtedness to which such Interest Rate
Agreement relates;
(6) Indebtedness of a Wholly-Owned Restricted Subsidiary of
the Company (x) to the Company or (y) to
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another Wholly-Owned Restricted Subsidiary of the Company; provided,
however, that any such Indebtedness of a Wholly-Owned Restricted
Subsidiary of the Company that is not a Guarantor is not subordinated
in right of payment to any other Indebtedness of such Restricted
Subsidiary;
(7) Indebtedness of the Company to a Wholly-Owned Restricted
Subsidiary of the Company which is unsecured and, unless owing to a
Guarantor, subordinated in right of payment from and after such time as
the Securities shall become due and payable (whether at a Stated
Maturity, by acceleration or otherwise) to the payment and performance
of the Company's obligations under this Indenture and the Securities;
provided, however, that any subsequent issuance or transfer of Capital
Stock that results in such Wholly-Owned Restricted Subsidiary ceasing
to be such, or any subsequent transfer of such Indebtedness (other than
to the Company or a Wholly-Owned Restricted Subsidiary) will be deemed,
in each case, to constitute the issuance of such Indebtedness by the
Company or of such Indebtedness by such Wholly-Owned Restricted
Subsidiary;
(8) Indebtedness of the Company to T-H Licensing arising
in connection with the loans described in clause (vi) of
Section 4.10(b);
(9) Indebtedness of the Company or any Guarantor
representing Capitalized Lease Obligations so long as such Indebtedness
does not exceed 6.0% of the amount of the gross property, plant and
equipment of the Company and its Restricted Subsidiaries determined on
a consolidated basis, as shown on the balance sheet of the Company as
of the end of the most recent fiscal quarter, in accordance with GAAP
consistently applied;
(10) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, that such Indebtedness is extinguished
within 5 business days of incurrence;
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(11) Indebtedness of the Company or any Restricted Subsidiary
consisting of guaranties, indemnities or obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets permitted under this Indenture;
(12) Following the Exchange Date, any Indebtedness or other
obligations of the Company issued to participants in the New Equity
Incentive Plan, provided that such Indebtedness is subordinated in
right of payment to the Securities;
(13) Indebtedness of the Company or any Guarantor in addition
to that described in clauses (1) through (12) above not to exceed
$20,000,000 outstanding at any time in the aggregate, which
Indebtedness may be incurred under the Credit Agreement; or
(14) (i) Indebtedness of the Company or any Guarantor, the
proceeds of which are used solely to refinance (whether by amendment,
renewal, extension or refunding) Indebtedness of the Company (including
all or a portion of the Exchange Debentures) or any of its Restricted
Subsidiaries and (ii) Indebtedness of any Restricted Subsidiary of the
Company the proceeds of which are used solely to refinance (whether by
amendment, renewal, extension or refunding) Indebtedness of such
Restricted Subsidiary; provided, however, that (A) the principal amount
of Indebtedness incurred pursuant to this clause (14) (or, if such
Indebtedness provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the
maturity thereof, the original issue price of such Indebtedness) shall
not exceed the sum of the principal amount of Indebtedness so
refinanced (or, if the Indebtedness so refinanced provides for an
amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof, the
original issue price of such Indebtedness plus any accretion value
attributable thereto since the original issuance of such Indebtedness)
plus the amount of any premium required to be paid in connection with
such refinancing pursuant to the terms of such Indebtedness or the
amount of any premium reasonably determined by the Company as necessary
to accomplish such refinancing by means of a tender offer or privately
-22-
negotiated purchase, plus the amount of expenses in connection
therewith and (B) in the case of any refinancing of Indebtedness that
is not Senior Debt, (1) such new Indebtedness is made subordinate to
the Securities in the same manner and at least to the same extent as
the Indebtedness being refinanced and (2) such new Indebtedness has a
Weighted Average Life to Maturity and final Stated Maturity of
principal that exceeds the Weighted Average Life to Maturity and final
Stated Maturity of principal, respectively, of the Indebtedness being
refinanced.
"Permitted Investment" means any of the following: (i)
Investments by the Company or any Wholly-Owned Restricted Subsidiary of the
Company in another Person, if as a result of such Investment such other Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all of its assets to the Company or such Wholly-Owned Restricted
Subsidiary; (ii) Investments in obligations of, or guaranteed by, the United
States government or any agency or political subdivision thereof, maturing
within one year of the date of purchase; (iii) Investments in commercial paper
issued by corporations, each of which shall have a consolidated net worth of at
least $100,000,000 maturing within 180 days from the date of the original issue
thereof, and rated "P-1" or better by Xxxxx'x or "A-1" or better by S&P or an
equivalent rating or better by any other nationally recognized securities rating
agency; (iv) Investments in certificates of deposit issued or acceptances
accepted by or guaranteed by any bank or trust company organized under the laws
of the United States of America or any state thereof or the District of
Columbia, in each case having capital, surplus and undivided profits totaling
more than $100,000,000 maturing within one year of the date of purchase; (v)
Investments representing Capital Stock or obligations issued to the Company or
any of its Restricted Subsidiaries in settlement claims against any other person
by reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or of such Restricted Subsidiary; (vi) Investments in Cash
Equivalents; (vii) loans and advances to officers of the Company and its
Restricted Subsidiaries made in compliance with clause (v) of Section 4.10(b);
(viii) Investments by the Company or a Wholly-Owned Restricted Subsidiary in the
Capital Stock of a Wholly-Owned Restricted Subsidiary; (ix) money market funds
organized under the laws of the United States of America or any state thereof
that invest substantially all of their
-23-
assets in any of the types of investments described in clause (ii), (iii), (iv)
or (vi) above; (x) Investments in any of the Securities; (xi) receivables owing
to the Company of any Restricted Subsidiary created in the ordinary course of
business; (xii) Investments consisting of Indebtedness permitted under clause
(5) of the definition of Permitted Indebtedness; and (xiii) Investments in the
aggregate amount of $10,000,000 at any time outstanding.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or
claims either (i) not delinquent or (ii) contested in good faith by
appropriate proceedings and as to which the Company or any of its
Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;
(b) security for the payment of workers' compensation,
unemployment insurance, other social security benefits or other
insurance-related obligations (including, but not limited to, in
respect of deductibles, self-insured retention amounts and premiums and
adjustments thereto);
(c) deposits or pledges in connection with bids,
tenders, leases and contracts (other than contracts for the
payment of money);
(d) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other
encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased
property, with or without consent of the lessee), none of which
interferes in any material respect with the ordinary conduct of the
business of the Company or any of its Subsidiaries or materially
impairs the use of any parcel of property;
(e) deposits or pledges to secure public or statutory
obligations, progress payments, surety and
-24-
appeal bonds or other obligations of like nature incurred in the
ordinary course of business;
(f) certain surveys, exceptions, title defects, encumbrances,
easements, reservations of, or rights of others for, rights of way,
sewers, electric lines, telegraph or telephone lines and other similar
purposes or zoning or other restrictions as to the use of real property
not materially interfering with the ordinary conduct of the business of
the Company and its Subsidiaries taken as a whole; or
(g) Liens arising by operation of law in favor of landlords,
mechanics, carriers, warehousemen, materialmen, laborers, employees,
suppliers or the like, incurred in the ordinary course of business for
sums which are not yet delinquent or are being contested in good faith
by negotiations or by appropriate proceedings which suspend the
collection thereof.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Preferred Capital Stock" of any Person means any Capital
Stock of such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemption or upon liquidation.
"Property" of any Person means all types of real, Personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.
"Qualified Capital Stock" means any Capital Stock that is
not Disqualified Capital Stock.
"Record Date" means March 1 and September 1 of each year
(whether or not a Business Day).
"Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption pursuant to this Indenture.
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"Reference Period" shall have the meaning set forth in the
definition of Consolidated Fixed Charge Coverage Ratio.
"Restricted Payment" means any of the following: (i) the
declaration or payment of any dividend or the making of any other distribution
(other than dividends or distributions payable in Qualified Capital Stock) on
shares of the Company's Capital Stock, (ii) the purchase, redemption, retirement
or other acquisition for value of any Capital Stock of the Company, or any
warrants, rights or options to acquire shares of Capital Stock of the Company,
other than through the exchange of such Capital Stock or any warrants, rights or
options to acquire shares of any class of such Capital Stock for Qualified
Capital Stock or warrants, rights or options to acquire Qualified Capital Stock,
(iii) the making of any principal payment on, or the purchase, defeasance,
redemption, prepayment, decrease or other acquisition or retirement for value,
prior to any scheduled final maturity, scheduled repayment or scheduled sinking
fund payment, of, any Indebtedness of the Company or its Subsidiaries that is
subordinated or junior in right of payment to the Securities, and (iv) the
making of any Investment (other than a Permitted Investment).
"Restricted Security" has the meaning set forth in Rule
144(a)(3) promulgated under the Securities Act; provided that the Trustee shall
be entitled to request and conclusively rely upon an Opinion of Counsel with
respect to whether any Security is a Restricted Security.
"Restricted Subsidiary" means (i) T-H Licensing and (ii) any
other subsidiary of the Company other than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Corporation and its
successors.
"SEC" means the United States Securities and Exchange
Commission as constituted from time to time or any successor performing
substantially the same functions.
"Secondary Securities" shall have the meaning set forth
in the Security.
"Senior Debt" means the principal of, premium, if any, and
interest on any Indebtedness of the Company, whether
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outstanding on the Issue Date or thereafter created, incurred or assumed,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness is pari passu with or subordinated in right of
payment to the Securities. Without limiting the generality of the foregoing,
"Senior Debt" shall also include (i) all obligations of the Company, whether
outstanding on the Issue Date or thereafter created, incurred or assumed, under
or in respect of the Credit Agreement, whether for principal, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding under any state or federal bankruptcy law whether or
not such interest is an allowable claim), reimbursement of amounts drawn under
letters of credit issued or arranged for pursuant thereto, guarantees in respect
thereof, and all charges, fees, expenses (including reasonable fees and expenses
of counsel) and other amounts in respect of the Credit Agreement incurred by or
owing to the lenders under the Credit Agreement or their representative, agent
or trustee, and all other obligations of the Company incurred under or in
respect of (i) the Credit Agreement (including, without limitation, any Interest
Rate Agreements and in respect of premiums, indemnities or otherwise, and all
indebtedness under the Credit Agreement which is disallowed, avoided or
subordinated pursuant to Xxxxxxx 000 xx Xxxxx 00, Xxxxxx Xxxxxx Code or any
applicable state fraudulent conveyance law) and (ii) all obligations of the
Company under, or in respect of, the Existing Notes and the Existing Indenture.
Notwithstanding the foregoing, "Senior Debt" shall not include (a) Indebtedness
evidenced by the Securities, (b) Indebtedness that is expressly subordinate or
junior in right of payment to any Senior Debt of the Company, (c) Indebtedness
which, when incurred and without respect to any election under Section 1111(b)
of Xxxxx 00, Xxxxxx Xxxxxx Code, is by its terms without recourse to the
Company, (d) any repurchase, redemption or other obligation in respect of
Disqualified Capital Stock, (e) to the extent it might constitute Indebtedness,
amounts owing for goods, materials or services purchased in the ordinary course
of business or consisting of trade payables or other current liabilities (other
than any current liabilities owing under the Credit Agreement or the current
portion of any long-term Indebtedness which would constitute Senior Debt but for
the operation of this clause (e)), (f) to the extent it might constitute
Indebtedness, amounts owed by the Company for compensation to employees or
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for services rendered to the Company, (g) to the extent it might constitute
Indebtedness, any liability for federal, state, local or other taxes owed or
owing by the Company, (h) Indebtedness of the Company to a Subsidiary of the
Company or any other Affiliate of the Company or any of such Affiliate's
Subsidiaries and (i) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture (but, as to any such
Indebtedness, no such violation of this Indenture shall be deemed to exist for
purposes of this clause (i) if the holder(s) of such Indebtedness or their
representative or the Company shall have furnished to the Trustee an Opinion of
Counsel, unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an Officer's Certificate of
the Company) to the effect that the incurrence of such Indebtedness does not
violate the provisions of this Indenture).
"Significant Subsidiary" shall have the same meaning as in
Rule 1.02(v) of Regulation S-X under the Securities Act, provided that each
Guarantor shall in all events be deemed a Significant Subsidiary.
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, the date specified in such
Security as the fixed date on which any principal of such Security or such
installment of interest is due and payable, and when used with respect to any
other Indebtedness or any installments of interest thereon, means any date
specified in the instrument governing such Indebtedness as the fixed date on
which the principal of such Indebtedness, or such installment of interest
thereon, is due and payable.
"Subsidiary", with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such Person
or (ii) any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly, owned by
such Person.
"Tax Sharing Agreement" means the Tax Sharing Agreement, dated
as of July 18, 1990 between the Company and Lancer, as amended from time to
time.
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"Temporary Cash Investments" means (i) Investments in
marketable direct obligations issued or guaranteed by the United States of
America, or of any governmental agency or political subdivision thereof,
maturing within 365 days of the date of purchase; (ii) Investments in demand
deposits or certificates of deposit issued by a bank organized under the laws of
the United States of America or any state thereof or the District of Columbia,
in each case having capital, surplus and undivided profits totaling more than
$500,000,000 and rated at least A by S&P and A-2 by Xxxxx'x, maturing within 365
days of purchase; (iii) Investments not exceeding 365 days in duration in money
market funds that invest substantially all of such funds' assets in the
Investments described in clauses (i) and (ii) above; (iv) any security maturing
not more than 180 days after the date of acquisition, backed by a stand-by or
direct pay letter of credit issued by a bank meeting the qualifications
described in clause (ii) above; or (v) commercial paper, maturing not more than
one year after the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Company) organized and existing under the laws of
the United States of America or any state thereof or the District of Columbia
with a rating, at the time as of which any investment therein is made, of "P-1"
by Xxxxx'x or "A-1" by S&P.
"T-H Licensing" means T-H Licensing, Inc., a Delaware
corporation and a wholly owned Subsidiary of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
xx.xx. 77aaa-77bbbb) as in effect on the date of this Indenture (as amended from
time to time).
"Transaction Date" has the meaning set forth in the definition
of Consolidated Fixed Charge Coverage Ratio.
"Trust Officer" when used with respect to the Trustee, means
any officer or assistant officer of the Trustee assigned to the Corporate Trust
Administration department or similar department
performing corporate trust work of the Trustee or any successor to such
department or, in the case of a successor Trustee, any officer of such successor
Trustee performing corporate trust functions similar to those performed by any
of the above designated officers and also means, with respect to a particular
corporate trust matter,
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any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.
"Unrestricted Subsidiary" means a Subsidiary of the Company
designated as such by the Company (a) no portion of the Indebtedness or any
other obligation (contingent or otherwise) of which (i) is guaranteed by the
Company or any other Subsidiary of the Company, (ii) is recourse to or obligates
the Company or any other Subsidiary of the Company in any way or (iii) subjects
any property or asset of the Company or any other Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
(b) which has no Indebtedness or any other obligation that, if in default in any
respect (including a nonpayment default), would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its Stated Maturity,
(c) with which the Company or any other Subsidiary or the Company has no
contract, agreement, arrangement, understanding or is subject to an obligation
of any kind, whether written or oral, other than a transaction on terms no less
favorable to the Company or any other Subsidiary of the Company than those which
might be obtained at the time from Persons who are not Affiliates of the
Company, and (d) with which neither the Company nor any other Subsidiary of the
Company has any obligation (other than by the terms of this Indenture) (i) to
subscribe for additional shares of Capital Stock or other equity interest
therein or (ii) to maintain or preserve such Subsidiary's financial condition or
to cause such Subsidiary to achieve certain levels of operating results;
provided, however, that in no event shall any Guarantor be an Unrestricted
Subsidiary. The Company may designate an Unrestricted Subsidiary as a Restricted
Subsidiary by written notice to the Trustee under this Indenture; provided,
however, that the Company shall not be permitted to designate any Unrestricted
Subsidiary as a Restricted Subsidiary unless (A) after giving pro forma effect
to such designation, the Company would be permitted to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) and (B) any Indebtedness or
Liens of such Unrestricted Subsidiary would be permitted to be incurred by
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a Restricted Subsidiary of the Company under this Indenture. A designation of an
Unrestricted Subsidiary as a Restricted Subsidiary may not thereafter be
rescinded.
"U.S. Government Obligations" means (i) securities that are
direct obligations of the United States of America for the payment of which its
full faith and credit are pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, 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 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 a specific payment of principal or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such depository receipt.
"Voting Stock" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of any Person (irrespective of whether or not, at the time,
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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"Wholly-Owned Restricted Subsidiary" means any Restricted
Subsidiary of the Company of which 100% of the outstanding Capital Stock is
owned by the Company or another Wholly-Owned Restricted Subsidiary of the
Company. For purposes of this definition, any directors' qualifying shares or
investments by foreign nationals mandated by applicable law shall be disregarded
in determining the ownership of a Restricted Subsidiary.
Section 1.02. Other Definitions.
The definitions of the following terms may be found in the
sections indicated as follows:
Term Defined in Section
"Acceleration Notice" ............................................................. 6.02
"Affiliate Transaction"............................................................ 4.10
"Available Net Cash Proceeds"...................................................... 4.09
"Bankruptcy Law"................................................................... 6.01
"Business Day"..................................................................... 11.08
"Change of Control Date"........................................................... 4.15
"Change of Control Offer".......................................................... 4.15
"Change of Control Payment Date"................................................... 4.15
"Covenant Defeasance".............................................................. 9.03
"Custodian"........................................................................ 6.01
"Event of Default"................................................................. 6.01
"Excess Proceeds Offer"............................................................ 4.09
"Guarantee Payment Blockage Period"................................................ 12.07
"Guarantor Representative"......................................................... 12.07
"Initial Blockage Period".......................................................... 10.03
"Initial Guarantee Blockage Period"................................................ 12.07
"Legal Defeasance"................................................................. 9.02
"Legal Holiday".................................................................... 11.08
"Offer Period"..................................................................... 4.09
"Paying Agent"..................................................................... 2.03
"Payment Blockage Period".......................................................... 10.03
"Purchase Date".................................................................... 4.09
"Purchase Price"................................................................... 4.09
"Registrar"........................................................................ 2.03
"Reinvestment Date"................................................................ 4.09
"Replacement Assets"............................................................... 4.09
"Representative"................................................................... 10.03
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Section 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
portion of such provision required to be incorporated herein in order for this
Indenture to be qualified under the TIA is incorporated by reference in and made
a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture securityholder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor on the indenture securities" means the Company,
the Guarantors or any other obligor on the Securities.
All other terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings therein assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein,
whether defined expressly or by reference;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
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(5) words used herein implying any gender shall apply to
every gender; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or Subdivision, unless
expressly stated otherwise.
ARTICLE 2.
THE SECURITIES
Section 2.01. Dating; Incorporation of Form in Indenture.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A which is incorporated in and
made part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule or usage. The Company may use
"CUSIP" numbers in issuing the Securities. The Company shall approve the form of
the Securities by Board Resolution. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Section 2.02. Execution and Authentication.
The Securities shall be executed on behalf of the Company by
two Officers of the Company or an Officer and an Assistant Secretary of the
Company. Such signatures may be either manual or facsimile. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates
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the Security or at any time thereafter, the Security shall be valid
nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. Such signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall authenticate
Securities for original issue in the aggregate principal amount of up to
$50,000,000 and from time to time thereafter authenticate and deliver Secondary
Securities, in each case upon receipt of a written order in the form of an
Officers' Certificate. The aggregate principal amount of Securities outstanding
at any time may not exceed $125,000,000 except as provided in Section 2.07
hereof. Upon the written order of the Company in the form of an Officers'
Certificate, the Trustee shall authenticate Securities in substitution of
Securities originally issued to reflect any name change of the Company.
The Trustee (at the expense of the Company) may appoint an
authenticating agent acceptable to the Company to authenticate Securities.
Unless limited by the terms of such appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. Such authenticating agent shall have the same right as the Trustee in
dealing with the Company or an Affiliate.
The Securities shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 and any integral
multiple thereof; provided, however, that Securities may be issued in
denominations of less than $1,000 (but not less than $1.00) upon the initial
exchange of the Exchangeable Preferred Stock for the Securities such that each
holder of Exchangeable Preferred Stock shall receive Securities in a principal
amount equal to the full liquidation preference of the Exchangeable Preferred
Stock on the Issue Date (as specified to the Trustee in the Officers'
Certificate delivered pursuant to this Section 2.02; provided, further, however,
that Secondary Securities may be issued in denominations of less than $1,000
(but not less than $1.00).
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No Security shall be authenticated or issued under this
Indenture except for Securities to be issued in exchange for Exchangeable
Preferred Stock pursuant to the certificate of designation governing the
Exchangeable Preferred Stock. In addition, except for the Company's obligations
under Section 7.07 hereof, the Company shall not be required to comply with the
provisions of this Indenture prior to such exchange.
Notwithstanding the foregoing, no Security shall be
authenticated hereunder by the Trustee or the authenticating agent unless such
Security is either (i) registered under the Act or (ii) exempt from registration
under the Act, in each case as specified in an Officers' Certificate delivered
pursuant to this Section 2.02 and, in the case of clause (ii), as provided for
in an Opinion of Counsel delivered to the Trustee.
Section 2.03. Registrar and Paying Agent.
The Company shall appoint a registrar, which shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange ("Registrar"), and a paying agent, which shall maintain an
office or agency located in the Borough of Manhattan, City of New York, State of
New York where Securities may be presented for payment ("Paying Agent") and
shall maintain an office or agency where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Registrar shall keep a register of the Securities and of their transfer and
exchange. The Company may appoint one or more additional paying agents. Neither
the Company nor any of its Subsidiaries or Affiliates may act as Paying Agent
but may act as Registrar. The Company may change any Paying Agent or Registrar
without notice to any Securityholder.
The Company shall enter into an appropriate agency agreement
with any Registrar or Paying Agent not a party to this Indenture. The agreement
shall implement the provisions of this Indenture that relate to such Agent and
shall incorporate the provisions of the TIA. The Company shall notify the
Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or agent for service of notices and
demands, or fails to give the foregoing notice, the Trustee shall act as such
and shall
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be entitled to appropriate compensation pursuant to Section 7.07. The
Company initially appoints the Trustee as Registrar, Paying Agent and agent for
service of notices and demands in connection with the Securities.
Section 2.04. Paying Agent To Hold Money in Trust.
On or before 10:00 A.M., New York City time, on each due date
of the principal of and interest on any Securities, the Company shall deposit
with the Paying Agent a sum or Secondary Securities, as the case may be,
sufficient to pay such principal and interest so becoming due. Each Paying Agent
shall hold in trust for the benefit of the Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities (whether such money has been paid to it by the Company or any
other obligor on the Securities), and the Company and the Paying Agent shall
notify the Trustee of any Default by the Company (or any other obligor on the
Securities) in making any such payment. Money held in trust by the Paying Agent
need not be segregated except as required by law and in no event shall the
Paying Agent be liable for any interest on any money received by it hereunder.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and the Trustee, may at any time during the continuance of any
Payment Default, upon written request to a Paying Agent, require such Paying
Agent to forthwith pay to the Trustee all sums so held in trust by such Paying
Agent together with a complete accounting of such sums. Upon doing so, the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
Section 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date, and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders, including the aggregate principal
amount of Securities held by each such Securityholder.
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Section 2.06. Transfer and Exchange.
When a Security is presented to the Registrar with a request
to register the transfer thereof, the Registrar shall register the transfer as
requested if the requirements set forth herein for such transfer are met, and
when Securities are presented to the Registrar with a request to exchange them
for an equal principal amount of Securities of other authorized denominations,
the Registrar shall make the exchange as requested, provided that every Security
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney, duly authorized in writing. To permit registration of
transfers and exchanges, upon surrender of any Security for registration of
transfer at the office or agency maintained pursuant to Section 2.03 hereof, the
Company shall issue and execute and the Trustee shall authenticate Securities at
the Registrar's request. Any exchange or transfer shall be without any service
charge to the Securityholder, except that the Company may require payment by the
Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation to a transfer or exchange, but this provision shall
not apply to any exchange pursuant to Section 2.09, 3.06 or 8.05 hereof. The
Trustee shall not be required to register transfers of Securities or to exchange
Securities for a period of 15 days before selection of any Securities to be
redeemed. The Trustee shall not be required to exchange or register transfers of
any Securities called or being called for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
Each Holder of a Security agrees to indemnify the Company and
the Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable U.S. Federal or state securities law.
Except as expressly provided herein, neither the Trustee nor
the Registrar shall have any duty to monitor the Company's compliance with or
have any responsibility with respect to the Company's or any Guarantor's, if
any, compliance with any Federal or state securities laws.
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Section 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Registrar or
Trustee or if the Holder of a Security presents evidence to the satisfaction of
the Company and the Trustee that the Security has been lost, destroyed or
wrongfully taken and of the ownership thereof, the Company shall issue and the
Trustee shall authenticate a replacement Security if the requirements of Section
8-405 of the New York Uniform Commercial Code as in effect on the date of this
Indenture are met. An indemnity bond may be required by the Company or the
Trustee that is sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee each may
charge for its expenses (including reasonable attorneys' fees and expenses) in
replacing a Security. Every replacement Security is an additional obligation of
the Company.
Section 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, and those described in this Section 2.08 as not
outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding until the Company and the Trustee receive proof satisfactory
to each of them that the replaced Security is held by a bona fide purchaser.
If a Paying Agent holds on a Redemption Date or Maturity Date
money sufficient to pay the principal of, premium, if any, and all accrued
interest on Securities payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Securities cease to be outstanding and interest on
them ceases to accrue.
Subject to Section 11.06, a Security does not cease to be
outstanding solely because the Company or an Affiliate holds the Security.
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Section 2.09. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form, and shall carry all
rights, benefits and privileges, of definitive Securities but may have
variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities
presented to it.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee shall destroy all Securities so delivered and deliver a certificate
of destruction to the Company. All Securities surrendered for transfer,
exchange, payment or cancellation shall be destroyed by the Trustee and the
Trustee shall deliver a certificate of destruction to the Company. Subject to
Section 2.07 hereof and except for the issuance of Secondary Securities, the
Company may not issue new Securities to replace Securities in respect of which
it has previously paid all principal, premium and interest accrued thereon, or
delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted amounts, plus (to the extent permitted by
law) any interest payable on defaulted amounts pursuant to Section 4.01 hereof,
to the persons who are Securityholders on a subsequent special record date. The
Company shall fix the special record date and payment date in a manner
satisfactory to the Trustee and provide the Trustee at least 20 days notice of
the proposed amount of default interest to be paid and the special payment date,
and at the same time the Company shall deposit with the Trustee an amount equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date
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of the proposed payment, such payment when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Section
provided. At least 15 days before the special record date, the Company shall
mail or cause to be mailed to each Securityholder at his address as it appears
on the Securities register maintained by the Registrar a notice that states the
special record date, the payment date (which shall be not less than five nor
more than ten days after the special record date), and the amount to be paid. In
lieu of the foregoing procedures, the Company may pay defaulted interest in any
other lawful manner satisfactory to the Trustee.
Section 2.12. Deposit of Moneys.
Prior to 10:00 A.M., New York City time, on each Interest
Payment Date and Maturity Date, the Company shall have deposited with the Paying
Agent in immediately available funds money or Secondary Securities, as the case
may be, sufficient to make cash payments, if any, due on such Interest Payment
Date or Maturity Date, as the case may be, in a timely manner which permits the
Trustee to remit payment to the Holders on such Interest Payment Date or
Maturity Date, as the case may be.
Section 2.13. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP"
number(s), and if so, the Trustee shall use the CUSIP number(s) in notices of
redemption or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number(s) printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Company will promptly notify in writing the Trustee of any
such CUSIP number used by the Company in connection with the Securities and any
change in such CUSIP number.
ARTICLE 3.
REDEMPTION
Section 3.01. Notices to Trustee.
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If the Company elects to redeem Securities pursuant to Section
3.07 hereof, (i) at least 60 days prior to the Redemption Date in the case of a
partial redemption, (ii) at least 45 days prior to the Redemption Date in the
case of a total redemption or (iii) during such other period as the Trustee may
agree to in writing, the Company shall notify the Trustee in writing of the
Redemption Date, the principal amount of Securities to be redeemed and the
redemption price, and deliver to the Trustee an Officers' Certificate stating
that such redemption will comply with the conditions contained in paragraph 6 of
the Security, as appropriate.
Section 3.02. Selection by Trustee of Securities To Be Redeemed.
In the event that fewer than all of the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed, if the
Securities are listed on a national securities exchange, in accordance with the
rules of such exchange or, if the Securities are not so listed, on either a pro
rata basis or by lot, or such other method as it shall deem fair and
appropriate. The Trustee shall promptly notify the Company of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed. Securities in
denominations of $1,000 or less may be redeemed only in whole. The Trustee may
select for redemption portions of the principal of the Securities that have
denominations larger than $1,000, provided such Securities and portions thereof
the Trustee selects shall be redeemed in amounts of $1,000 or whole multiples of
$1,000. For all purposes of this Indenture unless the context otherwise
requires, provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.
Section 3.03. Notice of Redemption.
At least 30 days, but no more than 60 days, before a
Redemption Date, the Company shall mail, or cause to be mailed (at its own
expense) a notice of redemption by first-class mail to each Holder of Securities
to be redeemed at his or her last address as the same appears on the registry
books maintained by the Registrar pursuant to Section 2.03 hereof.
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The notice shall identify the Securities to be redeemed
(including the CUSIP numbers thereof) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) if any Security is being redeemed in part, the portion of the
principal amount of such Security to be redeemed and that, after the Redemption
Date and upon surrender of such Security, a new Security or Securities in
principal amount equal to the unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on and
after the Redemption Date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed; and
(8) the aggregate principal amount of Securities that are
being redeemed.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's sole expense.
Section 3.04. Effect of Notice of Redemption.
Once the notice of redemption described in Section 3.03 is
mailed, Securities called for redemption become due and payable on the
Redemption Date and at the redemption price, including any premium, plus
interest accrued to the Redemption Date. Upon surrender to the Paying Agent,
such Securities shall be paid at the redemption price, including any premium,
plus interest accrued to the Redemption Date, provided that if the Redemption
Date is after a regular interest payment record date and on or prior to the
Interest
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Payment Date, the accrued interest shall be payable to the Holder of the
redeemed Securities registered on the relevant record date, and provided,
further, that if a Redemption Date is a Legal Holiday, payment shall be made on
the next succeeding Business Day and no interest shall accrue for the period
from such Redemption Date to such succeeding Business Day.
Section 3.05. Deposit of Redemption Price.
On or prior to 10:00 A.M., New York City time, on each
Redemption Date, the Company shall deposit with the Paying Agent in immediately
available funds money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions thereof called for redemption on that date which have been delivered by
the Company to the Trustee for cancellation.
On and after any Redemption Date, if money sufficient to pay
the redemption price of and accrued interest on Securities called for redemption
shall have been made available in accordance with the preceding paragraph and
payment thereof is not prohibited pursuant to the terms of this Indenture, the
Securities called for redemption will cease to accrue interest and the only
right of the Holders of such Securities will be to receive payment of the
redemption price of and, subject to the first proviso in Section 3.04, accrued
and unpaid interest on such Securities to the Redemption Date. If any Security
called for redemption shall not be so paid, interest will be paid, from the
Redemption Date until such redemption payment is made, on the unpaid principal
of the Security and any interest not paid on such unpaid principal, in each
case, at the rate and in the manner provided in the Securities.
Section 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for a Holder a new Security equal in principal amount
to the unredeemed portion of the Security surrendered.
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ARTICLE 4.
COVENANTS
Section 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of principal of or interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent holds on
that date money designated for and sufficient to pay the installment or, if the
interest is to be paid in Secondary Securities, if the Trustee or the Paying
Agent holds on that date duly authenticated Secondary Securities in an aggregate
principal amount equal to such installment. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
The Company shall pay interest on overdue principal (including
post-petition interest in a proceeding under any Bankruptcy Law) and overdue
interest, to the extent lawful, at the rate specified in the Securities.
Section 4.02. SEC Reports
The Company shall file with the Trustee and provide to the
Securityholders, within 15 days after it files them with the SEC, copies of the
annual reports and of the information, documents, and other reports (or copies
of such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company files with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. In the event that the Company is no longer required to
furnish such reports to its securityholders pursuant to the Exchange Act, the
Company will cause its consolidated financial statements, comparable to those
which would have been required to appear in annual or quarterly reports, to be
delivered to the Holders of the Securities. The Company shall also comply with
the
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other provisions of TIA ss. 314(a). Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive or actual notice of any
information contained therein or determinable from information contained
therein, including, without limitation, the Company's compliance with any
covenant hereunder, as to which the Trustee is entitled to rely exclusively and
conclusively on Officers' Certificates.
Section 4.03. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, or plead (as a defense or
otherwise) or in any manner whatsoever claim or take the benefit or advantage
of, any stay or extension law or any usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of,
premium, if any, and/or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 100 days
after the end of each fiscal year and on or before 50 days after the end of the
first, second and third quarters of each fiscal year, an Officers' Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company) stating that a
review of the activities of the Company and its Subsidiaries during such fiscal
year or fiscal quarter, as the case may be, 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
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contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions hereof (or, if a
Default or Event of Default shall have occurred, describing all or 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, if any, on the
Securities 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 (and to the extent) not contrary to the then
current recommendations of the American Institute of Certified Public
Accountants, the year-end financial statements delivered pursuant to Section
4.02 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 which would lead them
to believe that the Company has violated any provisions of this Article 4 or
Article 5 of this Indenture 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 for any failure to obtain
knowledge of any such violation.
(c) The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.05. Taxes.
The Company shall, and shall cause each of its Subsidiaries
to, pay prior to delinquency all material taxes, assessments, and governmental
levies except as contested in good faith and by appropriate proceedings.
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Section 4.06. Limitation on Incurrence of Additional Indebtedness.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, incur any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness.
Notwithstanding the foregoing limitations, the Company and its
Restricted Subsidiaries may incur Indebtedness if, after giving effect to the
incurrence of such Indebtedness, the Consolidated Fixed Charge Coverage Ratio of
the Company and its Restricted Subsidiaries is at least equal to 2.0 to 1.0.
Section 4.07. Limitation on Preferred Capital
Stock of Restricted Subsidiaries.
The Company shall not permit any of its Restricted
Subsidiaries to issue any Preferred Capital Stock (other than to the Company or
to a Wholly-Owned Restricted Subsidiary) or permit any Person (other than the
Company or a Wholly-Owned Restricted Subsidiary) to own any Preferred Capital
Stock of any Restricted Subsidiary unless the Company or such Restricted
Subsidiary would be entitled to incur or assume Indebtedness in compliance with
Section 4.06 hereof in an aggregate principal amount equal to the aggregate
liquidation value of the Preferred Capital Stock to be issued.
Section 4.08. Limitation on Restricted Payments.
The Company shall not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, make any Restricted Payment if at the
time of such Restricted Payment and immediately after giving effect thereto:
(a) any Default or Event of Default shall have occurred
and be continuing; or
(b) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) under Section
4.06 hereof; or
(c) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes, if
other than in cash, being the fair
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market value of such property as determined by the Board of Directors
of the Company, whose determination shall be conclusive) exceeds the
sum of (a) 50% of the aggregate Consolidated Net Income of the Company
accrued on a cumulative basis during the period (treated as one
accounting period) beginning on the last day of the fiscal quarter
immediately preceding the Issue Date and ending on the last day of the
fiscal quarter of the Company immediately preceding the date of such
proposed Restricted Payment (or, if such aggregate cumulative
Consolidated Net Income of the Company for such period shall be a
deficit, minus 100% of such deficit) plus (b) the aggregate net
proceeds received by the Company either (1) as capital contributions to
the Company after the Issue Date, excluding any capital contributions
pursuant to the Tax Sharing Agreement or (2) from the issuance or sale
of Qualified Capital Stock (including Qualified Capital Stock issued
upon the conversion of convertible Indebtedness, in exchange for
outstanding Indebtedness or from the exercise of options, warrants or
rights to purchase Qualified Capital Stock) of the Company to any
Person (other than to a Restricted Subsidiary of the Company) after the
Issue Date plus (c) in the case of the disposition or repayment of any
Investment constituting a Restricted Payment made after the Issue Date
(excluding any Investment made pursuant to clause (4) of the following
paragraph), an amount equal to the lesser of the return of capital with
respect to such Investment and the cost of such Investment, in either
case, less the cost of the disposition of such Investment minus (d) 20%
of all cash payments made pursuant to the New Equity Incentive Plan.
For purposes of the preceding clause (iii)(b)(2), the value of the
aggregate net proceeds received by the Company upon the issuance of
Qualified Capital Stock either upon the conversion of convertible
Indebtedness or in exchange for outstanding Indebtedness or upon the
exercise of options, warrants or rights will be the net cash proceeds
received upon the issuance of such Indebtedness, options, warrants or
rights plus the incremental amount received by the Company upon the
conversion, exchange or exercise thereof.
Notwithstanding the foregoing, these provisions will not
prohibit: (1) the payment of any dividend or the making of any distribution
within 60 days after the date of its
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declaration if such dividend or distribution would have been permitted on the
date of declaration; (2) the purchase, redemption or other acquisition or
retirement of any Capital Stock of the Company or any warrants, options or other
rights to acquire shares of any class of such Capital Stock either (x) solely in
exchange for shares of Qualified Capital Stock (including any such exchange
pursuant to a conversion right or privilege in connection with which cash paid
in lieu of fractional shares or scrip), or (y) through the application of the
net cash proceeds of a substantially concurrent sale (other than to a Subsidiary
of the Company) of shares of Qualified Capital Stock or warrants, options or
other rights to acquire Qualified Capital Stock; (3) the acquisition of
Indebtedness of the Company that is subordinate or junior in right of payment to
the Securities either (x) solely in exchange for shares of Qualified Capital
Stock (or warrants, options or other rights to acquire Qualified Capital Stock)
or for Indebtedness of the Company that is subordinate or junior in right of
payment to the Securities, at least to the extent that the Indebtedness being
acquired is subordinated to the Securities and has a Weighted Average Life to
Maturity no less than that of the Indebtedness being acquired or (y) through the
application of the net cash proceeds of a substantially concurrent sale for cash
(other than to a Subsidiary of the Company) of shares of Qualified Capital Stock
(or warrants, options or other rights to acquire Qualified Capital Stock) or
Indebtedness of the Company which is subordinate or junior in right of payment
to the Securities, at least to the extent that the Indebtedness being acquired
is subordinated to the Securities and has a Weighted Average Life to Maturity no
less than that of the Indebtedness being refinanced; (4) payments by the Company
to Lancer pursuant to the Tax Sharing Agreement; (5) Investments constituting
Restricted Payments made as a result of the receipt of non-cash consideration
from any Asset Sale; and (6) guarantees in respect of Indebtedness incurred by
officers or employees of the Company or any Restricted Subsidiary in the
ordinary course of business and payments in discharge thereof in an amount not
to exceed $500,000 in any fiscal year.
Section 4.09. Limitation on Asset Sales.
(a) The Company shall not, and shall not cause or permit any
of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the
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time of such sale or other disposition at least equal to the fair market value
thereof (as determined in good faith by the Company's Board of Directors, and
evidenced by a board resolution); (ii) not less than 75% of the consideration
received by the Company or its Subsidiaries, as the case may be, is in the form
of cash or Cash Equivalents; and (iii) the Net Cash Proceeds received by the
Company or such Restricted Subsidiary are applied (a) first, to the extent the
Company elects, or is required, to prepay, repay, make an offer to redeem or
purchase Indebtedness under any then existing Senior Debt of the Company or any
Restricted Subsidiary; provided, that any such repayment shall result in a
permanent reduction of the commitments thereunder in an amount equal to the
principal amount so repaid; (b) second, to the extent of the balance of Net Cash
Proceeds after application as described above, to the extent the Company elects,
to an Investment in assets (including Capital Stock or other securities
purchased in connection with the acquisition of Capital Stock or property of
another Person) used or useful in businesses similar or ancillary to the
business of the Company or Restricted Subsidiary as conducted at the time of
such Asset Sale ("Replacement Assets"), provided that such Investment occurs
within 360 days following the receipt of such Net Cash Proceeds, so long as the
Company or such Restricted Subsidiary has notified the Trustee in writing on or
prior to the 270th day following such Asset Sale (the "Reinvestment Date") that
it has determined to apply the Net Cash Proceeds from such Asset Sale to an
investment in such Replacement Assets; (c) third, to make an offer to redeem or
purchase the Existing Notes or Indebtedness under any other then existing Senior
Debt of the Company or any Restricted Subsidiary in accordance with the terms of
the Existing Indenture or the document governing such other Senior Debt, as the
case may be; (d) fourth, if any Net Cash Proceeds from any Asset Sale are not
applied as provided in the preceding clauses (a) through (d) within 420 days of
such Asset Sale, the Company shall apply an amount equal to the Net Cash
Proceeds not so applied (the "Available Net Cash Proceeds") to an offer to
repurchase the Exchange Debentures, at a purchase price in cash equal to 100% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (an "Excess Proceeds Offer"). If an Excess Proceeds Offer is
not fully subscribed, the Company may retain the portion of the Available Net
Cash Proceeds not required to repurchase Securities.
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(b) If the Company is required to make an Excess
Proceeds Offer, the Company shall mail, within 30 days following the
Reinvestment Date, a notice to the Holders stating, among other things: (1) that
such Holders have the right to require the Company to apply the Available Net
Cash Proceeds to repurchase such Securities at a purchase price in cash equal to
100% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (the "Purchase Price"); (2) the purchase date (the
"Purchase Date"), which shall be no earlier than 30 days and not later than 60
days from the date such notice is mailed; (3) the instructions, determined by
the Company, that each Holder must follow in order to have such Securities
repurchased; and (4) the calculations used in determining the amount of
Available Net Cash Proceeds to be applied to the repurchase of such Securities.
The Excess Proceeds Offer shall remain open for a period of 20 Business Days
following its commencement (the "Offer Period"). The notice, which shall govern
the terms of the Excess Proceeds Offer, shall state:
(1) that the Excess Proceeds Offer is being made pursuant to
this Section 4.09 and the length of time the Excess Proceeds Offer will
remain open;
(2) the Purchase Price and the Purchase Date;
(3) that any Security not tendered or accepted for
payment will continue to accrue interest;
(4) that any Security accepted for payment pursuant to the
Excess Proceeds Offer shall cease to accrue interest on and after the
Purchase Date so long as payment thereof is not prohibited pursuant to
the terms of the Indenture;
(5) that Holders electing to have a Security purchased
pursuant to any Excess Proceeds Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Security completed, to the Company, a depositary,
if appointed by the Company, or a Paying Agent at the address specified
in the notice at least three Business Days before the Purchase Date;
(6) that Holders will be entitled to withdraw their election
if the Company, depositary or Paying Agent, as
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the case may be, receives, not later than the expiration of the Offer
Period, a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security the Holder delivered
for purchase and a statement that such Holder is withdrawing his
election to have the Security purchased;
(7) that, if the aggregate principal amount of
Securities surrendered by Holders exceeds the Available Net Cash
Proceeds, the Trustee shall select the Securities to be purchased on a
pro rata basis (with such adjustments as may be deemed appropriate by
the Company so that only Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased) or by such other method
as the Trustee shall deem fair and appropriate; and
(8) that Holders whose Securities were purchased only in part
will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
On or before the Purchase Date, the Trustee shall, to the
extent lawful, accept for payment, on a pro rata basis or by such other method
as the Trustee shall deem fair and appropriate to the extent necessary,
Securities or portions thereof tendered pursuant to the Excess Proceeds Offer,
deposit with the Paying Agent U.S. legal tender sufficient to pay the Purchase
Price plus accrued interest, if any, on the Securities to be purchased and
deliver to the Trustee an Officers' Certificate stating that such Securities or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 4.09. The Paying Agent shall promptly (but in any case not
later than 5 days after the Purchase Date) mail or deliver to each tendering
Holder an amount equal to the Purchase Price of the Security tendered by such
Holder and accepted by the Company for purchase, and the Company shall promptly
issue a new Security, and the Trustee shall authenticate and mail or make
available for delivery such new Security to such Holder equal in principal
amount to any unpurchased portion of the Security surrendered. Any Security not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Excess Proceeds
Offer on the Purchase Date. If an Excess Proceeds Offer is not fully subscribed,
the Company may retain that portion of the
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Available Net Cash Proceeds not required to repurchase Securities for general
corporate purposes.
Section 4.10. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not cause or permit any
of its Restricted Subsidiaries to, directly or indirectly, enter into or suffer
to exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or
services) with any Affiliate or holder of 10% or more of the Company's Common
Stock (an "Affiliate Transaction") or extend, renew, waive or otherwise modify
the terms of any Affiliate Transaction entered into prior to the Issue Date
unless (i) such Affiliate Transaction is between or among the Company and its
Wholly-Owned Restricted Subsidiaries; or (ii) the terms of such Affiliate
Transaction is fair and reasonable to the Company or such Restricted
Subsidiaries, as the case may be, and the terms of such Affiliate Transaction
are at least as favorable as the terms which could be obtained by the Company or
such Restricted Subsidiary, as the case may be, in a comparable transaction made
on an arm's-length basis between unaffiliated parties. Any Affiliate Transaction
involving an amount or having a value in excess of $1.0 million which is not
permitted under clause (i) above shall have been approved by a majority of the
Company's Board of Directors. In transactions with a value in excess of $5.0
million which are not permitted under clause (i) above, the Company must obtain
a written opinion as to the fairness of such a transaction from an independent
investment banking firm.
(b) The foregoing provisions will not apply to (i) any
Restricted Payment that is not prohibited by the provisions described under
Section 4.08 contained herein, (ii) payments to Lancer under the Tax Sharing
Agreement, (iii) payments to participants in the Equity Participation Plan in an
amount not exceeding $1.32 million in any fiscal year and $5.28 million in the
aggregate, (iv) reasonable and customary regular fees to directors of the
Company who are not employees of the Company, (v) loans or advances to officers
of the Company and its Restricted Subsidiaries for bona fide business purposes
of the Company in the ordinary course of business, (vi) royalty payments by the
Company to T-H Licensing pursuant to that certain letter agreement dated as of
December 29, 1989 between the Company and T-H Licensing (as such agreement may
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be amended from time to time pursuant to its terms), provided that any such
payment (less any amounts permitted to be retained by T-H Licensing pursuant to
the Credit Agreement) is returned to the Company as a loan within sixty days
after receipt of such payment by T-H Licensing, (vii) payments or distributions
to participants in the New Equity Incentive Plan pursuant to the terms thereof,
and (viii) payments of the Company's allocated portion of the Lancer
consolidated group's corporate expenses and fees to Lancer or any Affiliate of
Lancer incurred in connection with Lancer's or any Affiliate of Lancer's
performance of management consulting, monitoring and financial advisory services
with respect to the Company and any Restricted Subsidiary in an amount not to
exceed $2.0 million in any fiscal year excluding amounts paid prior to the Issue
Date); provided, however, that notwithstanding anything to the contrary
contained in this Indenture, the Company shall not be permitted to pay to Lancer
or any Affiliate of Lancer any amount for such services in excess of the amount
set forth in this clause (viii).
Section 4.11. Limitations on Dividends and Other
Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary of the Company to (a) pay dividends, in
cash or otherwise, or make any other distributions on or in respect of its
Capital Stock or any other interest or participation in, or measured by, its
profits, (b) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary of the Company, (c) make loans or advances to the Company or any
other Restricted Subsidiary of the Company, (d) transfer any of its properties
or assets to the Company or any other Restricted Subsidiary of the Company
(other than any customary restriction on transfers of property subject to a
Permitted Lien (other than a Lien on cash not constituting proceeds of non-cash
property subject to a Permitted Lien) which could not materially adversely
affect the Company's ability to satisfy its obligations hereunder), or (e)
guarantee any Indebtedness of the Company or any other Restricted Subsidiary of
the Company, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) any agreement or other instrument of a person
acquired by the Company or any Restricted Subsidiary of the Company in existence
at the time
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of such acquisition (but not created in contemplation thereof), which
encumbrance or restriction is not applicable to any person, or the properties or
assets of any Person, other than the person, or the property or assets of the
Person, so acquired, (iii) any encumbrance or restriction in any agreement
existing on the Issue Date to the extent and in the manner such encumbrance or
restriction is in effect on the Issue Date and (iv) any encumbrance or
restriction pursuant to any agreement that extends, refinances, renews or
replaces any agreement described in clause (ii) above, which is not materially
more restrictive or less favorable to the Holders of Securities than those
existing under the agreement being extended, refinanced, renewed.
Section 4.12. Limitations on Guarantees by Restricted
Subsidiaries.
The Company shall not permit any Restricted Subsidiary,
directly or indirectly, to assume, guarantee or in any other manner become
liable with respect to any Indebtedness of the Company or any Guarantor, unless
such Restricted Subsidiary is a Guarantor or simultaneously executes and
delivers a supplemental indenture providing for the guarantee of payment of the
Securities by such Restricted Subsidiary pursuant to the terms of Exhibit B
hereto; provided, however, that a Restricted Subsidiary may guarantee the
Company's obligations under the Credit Agreement without executing and
delivering such supplemental indenture or guaranteeing the Securities; provided,
further, that in the case of any guarantee of any Guarantor with respect to
Senior Debt, the guarantee of the payment of the Securities by such Guarantor to
be provided in accordance herewith shall be subordinated to the guarantee with
respect to such Senior Debt in the same manner and to the same extent as the
Securities are subordinated to such Senior Debt. The supplemental indenture will
supplement this Indenture by, among other things, creating an additional Article
12 applicable to the Restricted Subsidiary and any other Guarantor in the form
set forth in Exhibit B hereto and, in connection with the execution and delivery
of the Supplemental Indenture, such Restricted Subsidiary shall execute and
deliver to the Trustee a Guarantee substantially in the form of Exhibit C
hereto. Such Article 12 will not become effective until the provisions of
Section 12.04 have been complied with. Each guarantee created pursuant to the
provisions described above is referred to as a "Guarantee" and the issuer of
each such Guarantee, so
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long as the Guarantee remains outstanding, is referred to as a "Guarantor."
Notwithstanding the foregoing, in the event that a Guarantor
is released from all obligations which pursuant to the first sentence of the
preceding paragraph obligate it to become a Guarantor, such Guarantor shall be
released from all obligations under its Guarantee (provided that the provisions
of the first sentence of the preceding paragraph shall apply anew in the event
that such Guarantor subsequent to being released incurs any obligations that
pursuant to such sentence obligate it to become a Guarantor). In addition, upon
any sale or disposition (by merger or otherwise) of any Guarantor by the Company
or a Restricted Subsidiary of the Company to any Person that is not an Affiliate
of the Company or any of its Restricted Subsidiaries which is otherwise in
compliance with the terms of this Indenture, such Guarantor will be deemed to be
released from all obligations under its Guarantee; provided, however, that each
such Guarantor is sold or disposed of in accordance with Section 4.09 above;
provided, further, that the foregoing proviso shall not apply to the sale or
disposition of a Guarantor in a foreclosure to the extent that such proviso
would be inconsistent with the requirements of the Uniform Commercial Code.
Section 4.13 Payments for Consent.
Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the Securities or unless such consideration is offered to be paid or agreed
to be paid to all holders of the Securities who so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating to such
consent, waiver or agreement.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence, and the corporate, partnership or other existence of each
Restricted Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of
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each Restricted Subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Holders.
Section 4.15 Change of Control.
(a) In the event of a Change of Control occurring on or after
July 2, 2001 (the date of such occurrence being the "Change of Control Date)",
the Company shall only if and only to the extent permitted by any Senior Debt of
the Company then outstanding, notify the Holders of the Securities in accordance
with this Section 4.15 and make an offer to redeem all outstanding Securities at
a redemption price equal to 101% of the principal amount thereof plus accrued
and unpaid interest, if any, to the Change of Control Payment Date (as defined
below). In addition, upon the occurrence of a Change of Control occurring prior
to July 2, 2001, the Company will have the option to offer to redeem the
Securities, in whole but not in part, at a redemption price equal to 101% of the
principal amount thereof, plus, without duplication, accrued and unpaid interest
to the Change of Control Payment Date. If a Change of Control occurs prior to
July 2, 2001 and the Company fails to make an offer to redeem the Securities in
accordance with the terms of this Section 4.15, the annual interest rate on the
Securities will increase by 4.0% over the then-applicable interest rate. Any
offer to redeem the Securities upon a Change of Control as provided above will
be referred to herein as a "Change of Control Offer." Prior to the mailing of
the notice referred to below, but in any event within 30 days following the date
on which a Change of Control occurs, the Company covenants that if the
redemption of the Securities would violate or constitute a default under any
outstanding Senior Debt, then the Company will, to the extent needed to permit
the purchase of the Securities, either (i) repay in full all such Senior Debt
(and terminate all commitments thereunder) or offer to repay in full all such
Senior Debt (and terminate all such commitments) or (ii) obtain the requisite
consents under the instrument governing
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such Senior Debt to permit the repurchase of the Securities as provided below.
The Company will first comply with the covenant in the preceding sentence before
it will be required to repurchase Securities pursuant to the provisions
described in this Section 4.15, provided that the Company's failure to comply
with the covenant described in the preceding sentence shall constitute an Event
of Default under Section 6.01(3).
(b) To effect a Change of Control, within 30 days following
the Change of Control Date, the Company shall send, by first class mail, a
notice to each Holder of Securities, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Change of Control Offer. Such notice shall
state:
(i) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Securities validly tendered and not
withdrawn will be accepted for payment;
(ii) the purchase price (including the amount of accrued
interest if any) and the purchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed,
other than as may be required by law) (the "Change of Control Payment
Date");
(iii) that any Security not tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Change of
Control Payment Date;
(v) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender the
Security, properly endorsed for transfer together with such customary
documents as the Company reasonably may request, to the Paying Agent at
the address specified in the notice prior to the close of business on
the Business Day prior to the Change of Control Payment Date;
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(vi) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than three Business Days
prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(vii) that Holders whose Securities are purchased only in part
will be issued new Securities in a principal amount equal to the
unpurchased portion of the Securities surrendered; and
(viii) the circumstances and relevant facts regarding such
Change of Control.
On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment Securities or portions thereof
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
or beneficial interests so tendered and (iii) deliver or cause to be delivered
to the Trustee Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof tendered to the Company. The Paying
Agent shall promptly mail to each holder of Securities so accepted payment in an
amount equal to the purchase price for such Securities, and the Company shall
execute and issue, and the Trustee shall promptly authenticate and mail to such
holder, a new Security equal in principal amount to any unpurchased portion of
the Securities surrendered.
(c) (i) If the Company or any Subsidiary thereof has issued
any outstanding (A) Indebtedness that is subordinated in right of payment to the
Securities or (B) Preferred Stock, and the Company or such Subsidiary is
required to make a Change of Control Offer or to make a distribution with
respect to such subordinated Indebtedness or Preferred Stock in the event of a
Change of Control, the Company shall not consummate any such offer or
distribution with respect to such subordinated Indebtedness or Preferred Stock
until such time as the Company shall have paid the Change of Control Purchase
Price in full to the holders of Securities that have accepted the Company's
Change of Control Offer and shall otherwise have consummated the Change of
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Control Offer made to holders of the Securities and (ii) the Company will not
issue Indebtedness that is subordinated in right of payment to the Securities or
Preferred Stock with change of control provisions requiring the payment of such
Indebtedness or Preferred Stock prior to the payment of the Securities in the
event of a Change of Control under this Indenture.
In the event that a Change of Control occurs and the Holders
of Securities exercise their right to require the Company to purchase
Securities, if such purchase constitutes a "tender offer" for purposes of Rule
14e-1 under the Exchange Act at that time, the Company will comply with the
requirements of Rule 14e-1 as then in effect with respect to such repurchase.
Section 4.16 Maintenance of Office or Agency.
The Company shall maintain an office or agency where
Securities may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee as set forth in Section
11.02.
The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company shall give prompt written notice to the Trustee of
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee set forth in Section 11.02 as such office of the Company.
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Section 4.17 Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties used or
useful to the conduct of its business or the business of any of its Subsidiaries
to be maintained and kept in good condition, repair and working order
(reasonable wear and tear excepted) and supplied with all equipment deemed
necessary in the good faith judgment of the Officers of the Company and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in their judgment may be necessary, so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times unless the failure to so maintain such properties
(together with all other such failures) would not have a material adverse effect
on the financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole; provided, however, that nothing in this Section
4.17 shall prevent the Company or any Subsidiary from discontinuing the
operation or maintenance of any of such properties, or disposing of any of them,
if such discontinuance or disposal is in the good faith judgment of the Board of
Directors of the Company or the Subsidiary concerned, as the case may be,
desirable in the conduct of the business of the Company or such Subsidiary, as
the case may be, and is not adverse in any material respect to the Holders.
(b) The Company shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the reasonable,
good faith opinion of the Company are adequate and appropriate for the conduct
of the business of the Company and such Subsidiaries in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the
Company, for corporations similarly situated in the industry, unless the failure
to provide such insurance (together with all other such failures) would not have
a material adverse effect on the financial condition or results of operations of
the Company and its Subsidiaries, taken as a whole.
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ARTICLE 5.
SUCCESSOR CORPORATION
Section 5.01. Limitation on Consolidation,
Merger and Sale of Assets.
(a) The Company shall not and shall not cause or permit any
Guarantor to, in a single transaction or series of related transactions,
consolidate with or merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets to, another
Person or adopt a plan of liquidation unless (i) either (1) the Company or the
Guarantor, as the case may be, is the survivor of such merger or consolidation
or (2) the surviving or transferee Person is a corporation, partnership or trust
organized and existing under the laws of the United States, any state thereof or
the District of Columbia and such surviving or transferee Person expressly
assumes by supplemental indenture all the obligations of the Company or the
Guarantor, as the case may be, under the Securities and this Indenture; (ii)
immediately after giving effect to such transaction and the use of proceeds
therefrom (on a pro forma basis, including any Indebtedness incurred or
anticipated to be incurred in connection with such transaction), the Company or
the surviving or transferee Person is able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.06
hereof; (iii) immediately after giving effect to such transaction (including any
Indebtedness incurred or anticipated to be incurred in connection with the
transaction) no Default or Event of Default has occurred and is continuing; and
(iv) the Company has delivered to the Trustee an Officers' Certificate and
Opinion of Counsel, each stating that such consolidation, merger or transfer
complies with this Indenture, that the surviving Person agrees by supplemental
indenture to be bound thereby, and that all conditions precedent in this
Indenture relating to such transaction have been satisfied. For purposes of the
foregoing, the transfer (by lease, assignment, sale or otherwise, in a single
transaction or series of related transactions) of all or substantially all of
the properties and assets of one or more Subsidiaries the Capital
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Stock of which constitutes all or substantially all of the properties and assets
of the Company will be deemed to be the transfer of all or substantially all of
the properties and assets of the Company.
(b) In connection with any consolidation, merger or transfer
of assets contemplated by this Section 5.01, the Company shall deliver or cause
to be delivered, to the Trustee, in form and substance reasonably satisfactory
to the Trustee, an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and the supplemental indenture in
respect thereto comply with this Section 5.01 and that all conditions precedent
herein provided for relating to such transaction or transactions have been
complied with.
Section 5.02. Successor Person Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company or any Guarantor in accordance
with Section 5.01 above, 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 or such Guarantor under this Indenture with the same effect as if
such successor corporation had been named as the Company or such Guarantor
herein, and thereafter the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if
(1) there is a default in the payment of any principal of, or
premium, if any, on the Securities when the same becomes due and
payable at maturity, upon acceleration, redemption or otherwise,
whether or not
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such payment is prohibited by the provisions of Article 10 hereof;
(2) there is a default in the payment of any interest on any
Security when the same becomes due and payable and the Default
continues for a period of 30 days, whether or not such payment is
prohibited by the provisions of Article 10 hereof;
(3) the Company or any Guarantors defaults in the observance
or performance of any other covenant in the Securities or this
Indenture for 60 days after written notice from the Trustee to the
Company or written notice from the Holders of not less than 25% in
aggregate principal amount of the Securities then outstanding to the
Company and the Trustee;
(4) there is a default in the payment at final maturity of
principal in an aggregate amount of $5,000,000 or more with respect to
any Indebtedness of the Company or any Restricted Subsidiary thereof
which default shall not be cured, waived or postponed pursuant to an
agreement with the holders of such Indebtedness within 60 days after
written notice, or the acceleration of any such Indebtedness
aggregating $5,000,000 or more which acceleration shall not be
rescinded or annulled within 20 days after written notice to the
Company of such Default by the Trustee or to the Company and the
Trustee by any Holder;
(5) a court of competent jurisdiction enters a final judgment
or judgments which can no longer be appealed for the payment of money
in excess of $5,000,000 (which are not paid or covered by third party
insurance by financially sound insurers that have not disclaimed
coverage) against the Company or any Restricted Subsidiary thereof and
such judgment remains undischarged, for a period of 60 consecutive days
during which a stay of enforcement of such judgment shall not be in
effect;
(6) the Company or any Restricted Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
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(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian
of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is not paying its debts as they
become due; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Restricted Subsidiary or for all or substantially all of
the property of the Company or any Restricted Subsidiary,
or
(C) orders the liquidation of the Company or any
Restricted Subsidiary,
and, in each case, the order or decree remains unstayed and in
effect for 60 consecutive days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
Subject to the provisions of Sections 7.01 and 7.02, the
Trustee shall not be charged with knowledge of any Default, Event of Default,
Change of Control or Asset Sale unless written notice thereof shall have been
given to a Trust Officer at the Corporate Trust Office by the Company or any
other Person.
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Section 6.02. Acceleration.
If an Event of Default (other than an Event of Default
specified in Section 6.01(6) or (7) with respect to the Company) occurs and is
continuing and has not been waived pursuant to Section 6.04, the Trustee may, by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by written notice to the Company
and the Trustee, and the Trustee shall, upon the request of such Holders,
declare the aggregate principal amount of the Securities outstanding, together
with accrued but unpaid interest, if any, on all Securities to be due and
payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same (i) shall become immediately due and
payable or (ii) if there are any amounts outstanding under the Credit Agreement,
shall become due and payable upon the first to occur of an acceleration under
the Credit Agreement or 5 Business Days after receipt by the Company and the
Representative under the Credit Agreement of such Acceleration Notice (unless
all Events of Default Specified in such Acceleration Notice have been cured or
waived). If an Event of Default specified in Section 6.01(6) or (7) with respect
to the Company occurs and is continuing with respect to the Company, all unpaid
principal and accrued interest on the Securities then outstanding shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholder. The Holders of a majority
in principal amount of the Securities then outstanding (by notice to the
Trustee) may rescind and cancel a declaration of acceleration and its
consequences if (i) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction, (ii) all existing Events of Default
have been cured or waived, except non-payment of the principal or interest on
the Securities which have become due solely by such declaration of acceleration,
(iii) to the extent the payment of such interest is lawful, interest (at the
same rate as specified in the Securities) on overdue installments of interest
and overdue payments of principal, which has become due otherwise than by such
declaration of acceleration, has been paid, (iv) the Company has paid the
Trustee its reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of a
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Default or Event of Default of the type described in Sections 6.01(6) and (7),
the Trustee shall have received an Officers' Certificate and an Opinion of
Counsel that such Default or Event of Default has been cured or waived and the
Trustee shall be entitled to conclusively rely upon such Officers' Certificate
and Opinion of Counsel. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
Section 6.03. Other Remedies.
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 the
payment of principal of, or premium, if any, and interest on the Securities or
to enforce the performance of any provision of the Securities or this Indenture
and may take any necessary action requested of it as Trustee to settle,
compromise, adjust or otherwise conclude any proceedings to which it is a party.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.04. Waiver of Past Defaults and Events of Default.
Subject to Sections 6.02, 6.07 and 8.02 hereof, the Holders of
a majority in principal amount of the Securities then outstanding have the right
to waive any existing Default or Event of Default or compliance with any
provision of this Indenture or the Securities. 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 Event of Default or
impair any right consequent thereto.
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Section 6.05. Control by Majority.
The Holders of a majority in principal amount of the
Securities then outstanding may 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 the Trustee by this Indenture. The Trustee, however, 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
Securityholder not taking part in such direction, and the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
counsel, determines that the action so directed may not lawfully be taken or if
the Trustee in good faith shall, by a Trust Officer, determine that the
proceedings so directed may involve it in Personal liability; provided that the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 6.06. Limitation on Suits.
Subject to Section 6.07 below, a Securityholder may not
institute any proceeding or pursue any remedy with respect to this Indenture or
the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding make a written
request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer, and if requested,
provide to the Trustee indemnity reasonably satisfactory to
the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60 day period by the Holders of a
majority in aggregate principal amount of the Securities then
outstanding.
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A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
Section 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Security to receive payment of principal of, or
premium, if any, and interest of the Security on or after the respective due
dates expressed in the Security, or to bring suit for the enforcement of any
such payment on or after such respective dates, is absolute and unconditional
and shall not be impaired or affected without the consent of the Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal, premium or
interest specified in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against the Company or the Guarantors (or any other obligor on the
Securities) for the whole amount of unpaid principal and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate then borne by the Securities, and such
further amounts 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, including all sums due and
owing to the Trustee pursuant to Section 7.07.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company or
the Guarantors (or any other obligor upon the Securities), its creditors or its
property and shall be entitled and empowered to collect and receive any monies
or other securities or property payable or deliverable on any such claims and to
distribute the same after deduction of its
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reasonable charges and expenses to the extent that any such charges and expenses
are not paid out of the estate in any such proceedings and any custodian in any
such judicial proceeding is hereby authorized by each Securityholder 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 Securityholders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceedings.
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 for amounts due under Section 7.07
hereof;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, and interest as to each,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities; and
THIRD: to the Company or, to the extent the Trustee collects
any amount from any Guarantors, to such Guarantors.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. The Trustee shall give
the Company prior notice of any such record date and payment date; provided,
however, that the failure to give any such notice shall not affect the
establishment of such record date or payment date or any payment to
Securityholders pursuant to this Section 6.10.
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Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, 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 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the Securities then outstanding.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
ARTICLE 7.
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, and
a Trust Officer of the Trustee has received written notice of such Event of
Default 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 their exercise as a
prudent man would exercise or use under the same circumstances in the conduct of
his own affairs.
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(b) Except during the continuance of an Event of
Default:
(1) 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.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture but, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Sections 6.02, 6.05 or 6.06 hereof.
(4) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity satisfactory to it against such risk or liability is
not reasonably assured to it.
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(d) Whether or not therein expressly so provided, paragraphs
(a), (b), (c), (e) and (f) of this Section 7.01 shall govern every provision of
this Indenture that in any way relates to the Trustee.
(e) The Trustee may refuse to perform any duty or exercise any
right or power unless it receives indemnity reasonably satisfactory to it
against any loss, liability, expense or fee.
(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 or
any Guarantors. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by the law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01 hereof:
(1) The Trustee may rely on and shall be protected in acting
or refraining from acting upon any document reasonably 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.
(2) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, or both,
which shall conform to the provisions of Section 13.05 hereof. The
Trustee shall be protected and shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion.
(3) The Trustee may act through attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney or
agent (other than the negligence or willful misconduct of an attorney
or agent who is an employee of the Trustee) appointed by it with due
care.
(4) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights
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or powers; provided that the Trustee's conduct does not constitute
negligence or bad faith.
(5) The Trustee may consult with counsel of its selection, and
the advice or opinion of such counsel as to matters of law shall be
full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such
counsel.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may make loans to, accept deposits from,
perform services for or otherwise deal with the Company or any Guarantors, or
any Affiliates thereof, with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, shall
be subject to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the sale of Securities or any money paid to the Company pursuant to the
terms of this Indenture and it shall not be responsible for any statement in the
Securities or any document used in connection with the sale of the Securities
other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default occurs and is continuing and if it is known to a
Trust Officer of the Trustee, the Trustee shall mail to each Securityholder
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment of the principal of, or premium, if any, or interest on any
Security, the Trustee may withhold the notice if and so long as any trust
committee of Trust Officers in good faith determines that withholding the notice
is in the interests of the Securityholders.
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Section 7.06. Reports by Trustee to Holders.
If required by TIA ss. 313(a), within 60 days after March 15
of any year, commencing the March 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 15
that complies with TIA ss. 313(a); provided that no such report need be
transmitted if no such events listed in TIA ss. 313(a) have occurred within such
period. The Trustee also shall comply with TIA ss. 313(b)(2). The Trustee shall
also transmit by mail all reports as required by TIA ss. 313(c) and TIA ss.
313(d).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange on which the
Securities are listed. The Company shall promptly notify the Trustee in writing
when the Securities are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
On a joint and several basis, the Company and the Guarantors,
if any, shall pay to the Trustee and Agents from time to time such compensation
as shall be agreed in writing between the Company and the Trustee for its
services hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust). The Company
shall reimburse the Trustee and Agents upon request for all reasonable
disbursements, expenses and advances incurred or made by it in connection with
its duties under this Indenture, including the reasonable compensation,
disbursements and expenses of the Trustee's and Agent's agents and counsel.
On a joint and several basis, the Company and the Guarantors,
if any, shall indemnify each of the Trustee and Agents and any predecessor
Trustee for, and hold it harmless against, any and all loss, damage, claim,
liability, expense (including but not limited to reasonable attorneys' fees and
expenses) or taxes (other than taxes based on the income of the Trustee)
incurred by it in connection with the acceptance or performance of its duties
under this Indenture including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder (including, without
limitation, settlement costs). The
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Trustee shall notify the Company in writing promptly of any claim asserted
against the Trustee for which it may seek indemnity. However, the failure by the
Trustee to so notify the Company shall not relieve the Company or any Guarantor
of its obligations hereunder.
Notwithstanding the foregoing, the Company and the Guarantors,
if any, need not reimburse the Trustee for any expense or indemnify it against
any loss or liability incurred by the Trustee through its negligence or bad
faith. To secure the payment obligations of the Company in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee in its capacity as such, except such money or
property held in trust to pay principal of and interest on particular
Securities. The obligations of the Company and the Guarantors, if any, under
this Section 7.07 to compensate and indemnify the Trustee and Agents and each
predecessor Trustee and to pay or reimburse the Trustee and Agents and each
predecessor Trustee for expenses, disbursements and advances shall be joint and
several liabilities of the Company and the Guarantors, if any, and shall survive
the satisfaction and discharge of this Indenture, including the termination or
rejection hereof in any bankruptcy proceeding to the extent permitted by law and
any resignation or removal of the Trustee.
When the Trustee or any Agent incurs expenses or renders
services after an Event of Default specified in Section 6.01(6) or (7) hereof
occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
For purposes of this Section 7.07, the term "Trustee" shall
include any trustee appointed pursuant to Article 9.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company in writing,
such resignation to become effective upon the appointment of a successor
Trustee. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by notifying the removed Trustee in writing
and may appoint a successor Trustee with the Company's written consent which
consent shall not be unreasonably withheld. The Company may remove the Trustee
at its election if:
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(1) the Trustee fails to comply with Section 7.10
hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.
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 a majority in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any
Securityholder 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. Immediately following
such delivery, the retiring Trustee shall, subject to its rights under Section
7.07 hereof, transfer all property held by it as Trustee to the successor
Trustee, 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. A successor Trustee shall mail
notice of its succession to each Securityholder. Notwithstanding replacement of
the Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the retiring Trustee.
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Section 7.09. Successor Trustee by Consolidation, Merger
or Conversion.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation or national banking association, subject to Section 7.10 hereof, the
successor corporation or national banking association without any further act
shall be the successor Trustee.
Section 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1) and (2) in every respect. The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA ss. 310(b), including the provision in ss. 310(b)(1); provided that there
shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities, or conflicts of interest or
participation in other securities, of the Company or the Guarantors are
outstanding if the requirements for exclusion set forth in TIA ss. 310(b)(1) are
met.
Section 7.11. Preferential Collection of Claims Against
Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
Section 7.12. Paying Agents.
The Company shall cause each Paying Agent other than the
Trustee to execute and deliver to it and the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
7.12:
(A) that it will hold all sums held by it as agent for
the payment of principal of, or premium, if any, or interest
on, the Securities (whether such sums have been paid to it by the
Company or by any obligor on the
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Securities) in trust for the benefit of Holders of the Securities or
the Trustee;
(B) that it will at any time during the continuance of any
Event of Default, upon written request from the Trustee, deliver to the
Trustee all sums so held in trust by it together with a full accounting
thereof; and
(C) that it will give the Trustee written notice within three
(3) Business Days of any failure of the Company (or by any obligor on
the Securities) in the payment of any installment of the principal of,
premium, if any, or interest on, the Securities when the same shall be
due and payable.
ARTICLE 8.
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 8.01. Without Consent of Holders.
The Company and the Guarantors, if any, when authorized by a
Board Resolution of each of them, and the Trustee may modify, waive, amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to comply with Section 5.01 hereof;
(2) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(3) to comply with any requirements of the SEC under the
TIA;
(4) to cure any ambiguity, defect or inconsistency, or
to make any other change that does not materially and
adversely affect the rights of any Securityholder;
(5) to make any other change that does not adversely
affect in any material respect the rights of any Securityholders
hereunder;
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(6) to add or release any Subsidiary as a Guarantor
pursuant to the terms of Article 12; or
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities.
The Trustee is hereby authorized to join with the Company and
the Guarantors, if any, in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations which may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which adversely affects its own rights, duties or immunities under this
Indenture.
Section 8.02. With Consent of Holders.
The Company, the Guarantors, if any, each when authorized by a
Board Resolution, and the Trustee may modify, amend, waive or supplement this
Indenture or the Securities with the written consent of the Holders of not less
than a majority in aggregate principal amount of the outstanding Securities
without notice to any Securityholder. The Holders of not less than a majority in
aggregate principal amount of the outstanding Securities may waive compliance in
a particular instance by the Company with any provision of this Indenture or the
Securities without notice to any Securityholder. Subject to Section 8.04,
without the consent of each Securityholder affected, however, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment, modification, supplement or waiver to
this Indenture or the Securities;
(2) reduce the rate of or change the time for payment of
interest on any Security;
(3) reduce the principal of or premium on or change the
stated maturity of any Security;
(4) make any Security payable in money other than that stated
in the Security or change the place of payment from New York, New York;
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(5) change the amount or time of any payment required by the
Securities or reduce the premium payable upon any redemption of the
Securities in accordance with Section 3.07 hereof, or change the time
before which no such redemption may be made;
(6) waive a default in the payment of the principal of, or
interest on, or redemption payment with respect to, any Security
(including any obligation to make a Change of Control Offer or, after
the Company's obligation to purchase Securities arises thereunder,
an Excess Proceeds Offer or modify any of the provisions or
definitions with respect to such offers);
(7) make any changes in Sections 6.04 or 6.07 hereof or
this sentence of Section 8.02; or
(8) affect the ranking of the Securities in a manner
adverse to the Holders.
After a modification, amendment, supplement or waiver under
this Section 8.02 becomes effective, the Company shall mail to the Holders a
notice briefly describing the modification, 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 modification,
amendment, supplement or waiver.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
modification, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
Section 8.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
Section 8.04. Revocation and Effect of Consents.
Until a modification, amendment, supplement, waiver or other
action becomes effective, a consent to it by a Holder of a Security is a
continuing consent conclusive and binding upon such Holder and every subsequent
Holder of the same Security or portion thereof, and of any Security issued upon
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the transfer thereof or in exchange therefor or in place thereof, even if
notation of the consent is not made on any such Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Security or portion
of a Security, if the Trustee receives the notice of revocation before the date
the modification, amendment, supplement, waiver or other action becomes
effective.
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
modification, amendment, supplement, or waiver. If a record date is fixed, then,
notwithstanding the preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only such Persons, shall be
entitled to consent to such modification, amendment, supplement, or waiver or to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 90 days after such record date unless the consent of the requisite
number of Holders has been obtained.
After a modification, amendment, supplement, waiver or other
action becomes effective, it shall bind every Securityholder, unless it makes a
change described in any of clauses (1) through (8) of Section 8.02 hereof. In
that case, the modification, amendment, supplement, waiver or other action shall
bind each Holder of a Security who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security.
Section 8.05. Notation on or Exchange of Securities.
If a modification, amendment, supplement or waiver changes the
terms of a Security, the Trustee shall (in accordance with the specific written
direction of the Company) request the Holder of the Security to deliver it to
the Trustee. In such case, the Trustee shall place an appropriate notation on
the Security about the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Security shall issue and the Trustee shall authenticate a new security that
reflects the changed terms. Failure to make the appropriate notation or issue a
new Security shall not affect the validity
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and effect of such modification, amendment, supplement or waiver.
Section 8.06. Trustee To Sign Amendments, etc.
The Trustee shall sign any modification, amendment, supplement
or waiver authorized pursuant to this Article 8 if the modification, amendment,
supplement or waiver does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing or refusing to sign such modification, amendment, supplement or
waiver, the Trustee shall be entitled to receive and, subject to Section 7.01
hereof, shall be fully protected in relying upon an Officers' Certificate and an
Opinion of Counsel stating that such modification, amendment, supplement or
waiver is authorized or permitted by this Indenture and such supplemental
indenture constitutes the legal, valid and binding obligation of the Company and
any Guarantor, if any, enforceable against each of them in accordance with its
terms (subject to customary exceptions). The Company or any Guarantors, if any,
may not sign a modification, amendment or supplement until the Company or such
Guarantors, as appropriate, approve it.
ARTICLE 9.
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01. Discharge of Indenture.
The Company and the Guarantors, if any, may terminate their
obligations under the Securities, the Guarantees, if any, and this Indenture,
except the obligations referred to in the last paragraph of this Section 9.01,
if there shall have been canceled by the Trustee or delivered to the Trustee for
cancellation all Securities theretofore authenticated and delivered (other than
any Securities that are asserted to have been destroyed, lost or stolen and that
shall have been replaced as provided in Section 2.07 hereof) and the Company has
paid all sums payable by it hereunder or deposited all required sums with the
Trustee.
After such delivery the Trustee upon request shall acknowledge
in writing the discharge of the Company's and the
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Guarantors' obligations under the Securities, the Guarantees and this Indenture
except for those surviving obligations specified below.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company in Sections 2.07, 7.07, 9.05, 9.06 and
9.08 hereof shall survive.
Section 9.02. Legal Defeasance.
The Company may at its option, by Board Resolution, be
discharged from its obligations with respect to the Securities and the
Guarantors, if any, discharged from their obligations under the Guarantees, if
any, on the date the conditions set forth in Section 9.04 below are satisfied
(hereinafter, "Legal Defeasance"). For this purpose, such Legal Defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Securities and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, shall, subject to
Section 9.06 hereof, execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (A) the rights of Holders of outstanding Securities to receive solely
from the trust funds described in Section 9.04 hereof and as more fully set
forth in such Section, payments in respect of the principal of, premium, if any,
and interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.08 and 4.20 hereof, (C) the rights, powers, trusts, duties, and
immunities of the Trustee hereunder (including claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof) and (D) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option
under this Section 9.02 with respect to the Securities notwithstanding the prior
exercise of its option under Section 9.03 below with respect to the Securities.
Section 9.03. Covenant Defeasance.
At the option of the Company, pursuant to a Board Resolution,
the Company and the Guarantors, if any, shall be released from their respective
obligations under Sections 4.02 through 4.19 hereof, inclusive, and clause
(a)(iii) of
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Section 5.01 hereof with respect to the outstanding Securities on and after the
date the conditions set forth in Section 9.04 hereof are satisfied (hereinafter,
"Covenant Defeasance") and the Securities shall thereafter be deemed to not be
outstanding for purposes of any direction, waiver, consent, declaration or act
of the Holders (and the consequences thereof) in connection with such covenants
but shall continue to be outstanding for all other purposes hereunder. For this
purpose, such Covenant Defeasance means that the Company and the Guarantors, if
any, may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section or portion
thereof, whether directly or indirectly by reason of any reference elsewhere
herein to any such specified Section or portion thereof or by reason of any
reference in any such specified Section or portion thereof to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities shall be unaffected thereby.
Section 9.04. Conditions to Defeasance or Covenant
Defeasance.
The following shall be the conditions to application of
Section 9.02 or Section 9.03 hereof to the outstanding Securities:
(1) the Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 7.10 hereof who shall agree to comply with the
provisions of this Article 9 applicable to it) as funds in trust for
the purpose of making the following payments, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of
the Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than the due date of any payment, money in an
amount, or (C) 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 and
discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, the principal of, premium, if
any, and accrued interest on the outstanding
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Securities at the maturity date of such principal, premium, if any, or
interest, or on dates for payment and redemption of such principal,
premium, if any, and interest selected in accordance with the terms of
this Indenture and of the Securities;
(2) no Event of Default or Default with respect to the
Securities shall have occurred and be continuing on the date of such
deposit, or shall have occurred and be continuing at any time during
the period ending on the 91st day after the date of such deposit or, if
longer, ending on the day following the expiration of the longest
preference period under any Bankruptcy Law applicable to the Company in
respect of such deposit (it being understood that this condition shall
not be deemed satisfied until the expiration of such period);
(3) such Legal Defeasance or Covenant Defeasance shall not
cause the Trustee to have a conflicting interest for purposes of the
TIA with respect to any securities of the Company;
(4) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute default under any
other agreement or instrument to which the Company is a party or by
which it is bound;
(5) the Company shall have delivered to the Trustee an Opinion
of Counsel stating that, as a result of such Legal Defeasance or
Covenant Defeasance, neither the trust nor the Trustee will be required
to register as an investment company under the Investment Company Act
of 1940, as amended;
(6) in the case of an election under Section 9.02 above, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling to the effect that
or (ii) there has been a change in any applicable Federal income tax
law with the effect that, and such opinion shall confirm that, the
Holders of the outstanding Securities or Persons in their positions
will not recognize income, gain or loss for Federal income tax purposes
solely as a result of such Legal Defeasance and
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will be subject to Federal income tax on the same amounts, in the same
manner, including as a result of prepayment, and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(7) in the case of an election under Section 9.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the outstanding Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such Covenant Defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(8) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the Legal
Defeasance under Section 9.02 above or the Covenant Defeasance under
Section 9.03 hereof (as the case may be) have been complied with;
(9) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit under clause (1) was not
made by the Company with the intent of defeating, hindering, delaying
or defrauding any creditors of the Company or others; and
(10) the Company shall have paid or duly provided for payment
under terms mutually satisfactory to the Company and the Trustee all
amounts due to the Trustee pursuant to Section 7.07 hereof.
Section 9.05. Deposited Money and U.S. Government
Obligations To Be Held in Trust; Other
Miscellaneous Provisions.
All money and U.S. Government Obligations (including the
proceeds thereof) deposited with the Trustee pursuant to Section 9.04 hereof in
respect of the outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent to the
Holders of such Securities, of all sums due and to become due thereon in respect
of principal,
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premium, if any, and accrued interest, but such money need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no duty to invest such money or U.S. Government Obligations.
On a joint and several basis, the Company and the Guarantors
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 9.04 hereof or the principal, premium, if any, and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the outstanding Securities.
Anything in this Article 9 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 9.04 hereof which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 9.01, 9.02 or 9.03 hereof
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Company and any Guarantors under this
Indenture, the Securities and the Guarantees, if any, shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 9 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
U.S. Government Obligations in accordance with Section 9.01 hereof; provided,
however, that if the Company or any Guarantors have made any payment of
principal of, premium, if any, or accrued interest on any Securities because of
the reinstatement of their obligations, the Company or such Guarantors, as the
case may be, shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
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Section 9.07. Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this
Indenture, all moneys then held by any Paying Agent under the provisions of this
Indenture shall, upon a Company Request, be paid to the Trustee, or if
sufficient moneys have been deposited pursuant to Section 9.04 hereof, to the
Company (or, if such moneys had been deposited by any Guarantors, to such
Guarantors), and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
Section 9.08. Moneys Held by Trustee.
Any moneys deposited with the Trustee or any Paying Agent or
then held by the Company or any Guarantors in trust for the payment of the
principal of, or premium, if any, or interest on any Security that are not
applied but remain unclaimed by the Holder of such Security for two years after
the date upon which the principal of, or premium, if any, or interest on such
Security shall have respectively become due and payable shall be repaid to the
Company (or, if appropriate, the Guarantors) upon Company Request, or if such
moneys are then held by the Company or any Guarantors in trust, such moneys
shall be released from such trust; and the Holder of such Security entitled to
receive such payment shall thereafter, as an unsecured general creditor, look
only to the Company and the Guarantors, if any, for the payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; provided, however, that the Trustee or any such Paying
Agent, before being required to make any such repayment, may, at the expense of
the Company and the Guarantors, if any, either mail to each Securityholder
affected, at the address shown in the register of the Securities maintained by
the Registrar pursuant to Section 2.03 hereof, or cause to be published once a
week for two successive weeks, in a newspaper published in the English language,
customarily published each Business Day and of general circulation in The City
of New York, New York, a 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 mailing or publication, any unclaimed balance of such moneys then
remaining will be repaid to the Company. After payment to the Company or the
Guarantors, if any, or the release of any money held in trust by the Company
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or any Guarantors, as the case may be, Securityholders entitled to the money
must look only to the Company and any Guarantors for payment as general
creditors unless applicable abandoned property law designates another Person.
ARTICLE 10.
SUBORDINATION OF SECURITIES
Section 10.01. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of
Securities, by its acceptance thereof, likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Article 10, the
Indebtedness represented by the Securities and the payment of the principal of,
premium, if any, and interest on the Securities are hereby expressly made
subordinate and subject in right of payment as provided in this Article 10 to
the prior indefeasible payment and satisfaction in full in cash or, as
acceptable to the holders of Senior Debt, in any other manner, of all existing
and future Senior Debt.
This Article 10 shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of or continue to
hold Senior Debt; and such provisions are made for the benefit of the holders of
Senior Debt; and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
Section 10.02. Payment Over of Proceeds upon
Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, whether voluntary or involuntary or (b)
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any general assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Company, then and in any such event:
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(1) the holders of Senior Debt shall be entitled to receive
payment and satisfaction in full in cash or, as acceptable to the
holders of Senior Debt, in any other manner, of all amounts due on or
in respect of all Senior Debt, before the Holders of the Securities are
entitled to receive or retain any payment or distribution of any kind
or character on account of principal of, premium, if any, or interest
on the Securities; and
(2) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the provisions of this Article 11 shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior
Debt or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any
of such Senior Debt may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Debt held
or represented by each, to the extent necessary to make payment in full
in cash or, as acceptable to the holders of Senior Debt, in any other
manner, of all Senior Debt remaining unpaid, after giving effect to any
concurrent payment or distribution, or provision therefor, to the
holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section 10.02, the Trustee or the Holder of any
Security shall have received any payment or distribution of assets of
the Company of any kind or character, whether in cash, property or
securities, including, without limitation, by way of set-off or
otherwise, in respect of principal of, premium, if any, and interest on
the Securities before all Senior Debt is paid and satisfied in full in
cash or such payment and satisfaction thereof in cash is provided for,
then and in such event such payment or distribution upon written notice
to the Trustee or the Holder of such Security, as the case may be,
shall be held by the Trustee or the Holder of such Security, as the
case may be, in trust for the benefit of the holders of such Senior
Debt and shall be immediately paid over or
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delivered forthwith to the liquidating trustee or agent or other Person
making payment or distribution of assets of the Company for application
to the payment of all Senior Debt remaining unpaid, to the extent
necessary to pay all Senior Debt in full in cash or, as acceptable to
the holders of Senior Debt, any other manner, after giving effect to
any concurrent payment or distribution, or provision therefor, to or
for the holders of Senior Debt.
The consolidation of the Company with, or the merger of the
Company with or into, another Person or the liquidation or dissolution of the
Company following the transfer of all its assets (as an entirety or
substantially as an entirety) to another Person upon the terms and conditions
set forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of the Company for the purposes of this
Article 11 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by transfer such assets (as an entirety
or substantially as an entirety) shall, as a part of such consolidation, merger
or transfer, comply with the conditions set forth in such Article 5 hereof.
Section 10.03. Suspension of Payment When Senior
Indebtedness in Default.
(a) Unless Section 10.02 hereof shall be applicable, after the
occurrence of a Payment Default no payment or distribution of any assets or
securities of the Company or any Restricted Subsidiary of any kind or character
(including, without limitation, cash, property and any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of the Company being subordinated to the payment of the Securities
by the Company) may be made by or on behalf of the Company or any Restricted
Subsidiary, including, without limitation, by way of set-off or otherwise, for
or on account of principal of, premium, if any, or interest on the Securities,
or for or on account of the purchase, redemption, defeasance or other
acquisition of the Securities, and neither the Trustee nor any holder or owner
of any Securities shall take or receive from the Company or any Restricted
Subsidiary, directly or indirectly in any manner, payment in respect of all or
any portion of Securities following the delivery by the
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representative of the holders of Designated Senior Debt (the "Representative")
to the Trustee of written notice of (i) the occurrence of a Payment Default on
Designated Senior Debt or (ii) the occurrence of a Non-Payment Event of Default
on Designated Senior Debt and the acceleration of the maturity of Designated
Senior Debt in accordance with its terms, and in any such event, such
prohibition shall continue until such Payment Default is cured, waived in
writing or ceases to exist or such acceleration has been rescinded or otherwise
cured; provided that nothing in this sentence shall be deemed to affect the
right of the Holders to receive solely from the funds deposited in trust
pursuant to clause (1) of Section 9.04 hereof prior to the date of such Payment
Default and as more fully set forth in such Section payments or distributions in
respect of the principal of, premium, if any, and interest on the Securities in
connection with any Legal Defeasance or Covenant Defeasance. At such time as the
prohibition set forth in the preceding sentence shall no longer be in effect,
subject to the provisions of the following paragraph (b), the Company shall
resume making any and all required payments in respect of the Securities,
including any missed payments.
(b) Unless Section 10.02 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Debt, no
payment or distribution of any assets or securities of the Company of any kind
or character (including, without limitation, cash, property and any payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of the Company being subordinated to the payment of the
Securities by the Company) shall be made by or on behalf of the Company,
including, without limitation, by way of set-off or otherwise, for or on account
of any principal of, premium, if any, or interest on the Securities or for or on
account of the purchase, redemption, defeasance or other acquisition of
Securities, and neither the Trustee nor any holder or owner of any Securities
shall take or receive from the Company, directly or indirectly in any manner,
payment in respect of all or any portion of the Securities, for a period (a
"Payment Blockage Period") commencing on the date of receipt by the Trustee of
written notice from the Representative of such Non-Payment Event of Default
unless and until (subject to any blockage of payments that may then be in effect
under the preceding paragraph (a)) the earliest to occur of the following
events: (x) more than 179 days shall have elapsed
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since the date of receipt of such written notice by the Trustee, (y) such
Non-Payment Event of Default shall have been cured or waived in writing or shall
have ceased to exist or such Designated Senior Debt shall have been paid in full
in cash and the Trustee has been so notified by either the Representative or the
Company or (z) such Payment Blockage Period shall have been terminated by
written notice to the Company or the Trustee from the Representative, after
which, in the case of clause (x), (y) or (z), the Company shall resume making
any and all required payments in respect of the Securities, including any missed
payments. Notwithstanding any other provisions of this Indenture, no event of
default with respect to Designated Senior Debt (other than a Payment Default)
which existed or was continuing on the date of the commencement of any Payment
Blockage Period initiated by the Representative shall be, or be made, the basis
for the commencement of a second Payment Blockage Period initiated by the
Representative unless such event of default shall have been cured or waived for
a period of not less than 90 consecutive days. In no event shall a Payment
Blockage Period extend beyond 179 days from the date of the receipt by the
Trustee of the notice referred to in this Section 10.03(b) (the "Initial
Blockage Period"). Any number of additional Payment Blockage periods may be
commenced during the Initial Blockage Period; provided, however, that no such
additional Payment Blockage Period shall extend beyond the Initial Blockage
Period. After the expiration of the Initial Blockage Period, no Payment Blockage
Period may be commenced under this Section 10.03(b) and no Guarantee Payment
Blockage Period may be commenced under Section 12.07(b) hereof until at least
180 consecutive days have elapsed from the last day of the Initial Blockage
Period. Notwithstanding anything in the Indenture to the contrary, no NonPayment
Event of Default with respect to Designated Senior Debt which existed or was
continuing on the date of the commencement of any Payment Blockage Period
initiated by the Representative shall be, or be made, the basis for the
commencement of a Second Payment Blockage Period initiated by the Representative
whether or not within the Initial Blockage Period, unless such Non-Payment Event
of Default shall have been waived for a period of not less than 90 consecutive
days.
(c) In the event that, notwithstanding the foregoing,
the Trustee or the Holder of any Security shall have received any payment
prohibited by the foregoing provisions of this Section 10.03, then and in such
event such
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payment shall be paid over and delivered forthwith to the Representative
initiating the Payment Blockage Period, in trust for distribution to the holders
of Senior Debt or, if no amounts are then due in respect of Senior Debt,
promptly returned to the Company, or otherwise as a court of competent
jurisdiction shall direct.
Section 10.04. Trustee's Relation to Senior Debt
With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and the Trustee shall not be liable
to any holder of Senior Debt if it shall mistakenly pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Debt shall be entitled by virtue of this Article 10 or otherwise.
Section 10.05. Subrogation to Rights of Holders
of Senior Debt.
Upon the payment in full of all Senior Debt, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Debt to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of, premium, if any, and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Senior Debt of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article 10, and no
payments pursuant to the provisions of this Article 10 to the holders of Senior
Debt by Holders of the Securities or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Debt and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Debt.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article 10 shall
have been applied, pursuant to the
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provisions of this Article 10, to the payment of all amounts payable under the
Senior Debt of the Company, then and in such case the Holders shall be entitled
to receive from the holders of such Senior Debt at the time outstanding any
payments or distributions received by such holders of such Senior Debt in excess
of the amount sufficient to indefeasibly pay all amounts payable under or in
respect of such Senior Debt in full in cash.
Section 10.06. Provisions Solely to Define Relative
Rights.
The provisions of this Article 10 are and are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities on the one hand and the holders of Senior Debt on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders of the Securities the principal of, premium, if any, and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms, or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Debt or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon a Default or
an Event of Default under this Indenture, subject to the rights, if any, under
this Article 11 of the holders of Senior Debt (1) in any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, arrangement,
reorganization or other similar case or proceeding in connection therewith, or
any liquidation, dissolution or other winding-up, or any assignment for the
benefit of creditors or other marshaling of assets and liabilities referred to
in Section 10.02 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2) under the conditions specified in Section 10.03,
to prevent any payment prohibited by such Section or enforce their rights
pursuant to Section 10.03(c) hereof.
The failure to make a payment on account of principal of,
premium, if any, or interest on the Securities
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by reason of any provision of this Article 10 shall not be construed as
preventing the occurrence of a Default or an Event of Default hereunder.
Section 10.07. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article 10 and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Trustee
does not file such a claim prior to 30 days before the expiration of the time to
file such a claim, the holders of Senior Debt, or any Representative, may file
such a claim on behalf of Holders of the Securities.
Section 10.08. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior
Debt to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of subsection (a) of this
Section 10.08, the holders of Senior Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article 11
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Debt, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt or any instrument evidencing the same or any agreement under which Senior
Debt
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is outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person
liable in any manner for the collection or payment of Senior Debt; and (4)
exercise or refrain from exercising any rights against the Company and any other
Person; provided, however, that in no event shall any such actions limit the
right of the Holders of the Securities to take any action to accelerate the
maturity of the Securities pursuant to Article 6 hereof or to pursue any rights
or remedies hereunder or under applicable laws if the taking of such action does
not otherwise violate the terms of this Indenture.
Section 10.09. Notice to Trustee.
(a) The Company shall give prompt written notice to the
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee at its Corporate Trust Office in respect of the
Securities. 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 which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior Debt
or from any trustee, fiduciary or agent therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of this Section
10.09, shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section 10.09 at least five Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
under this Indenture (including, without limitation, the payment of the
principal of, premium, if any, or interest on any Security), then, anything
herein contained to the contrary notwithstanding but without limiting the rights
and remedies of the holders of Senior Indebtedness or any trustee, fiduciary or
agent therefor, the Trustee shall have full power and authority to receive such
money and to apply the same to the purpose for which such money was received and
shall not be affected by any notice to the contrary which may be received by it
within five Business Days prior to such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition
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preventing any such payment unless and until the Trustee shall have received an
Officers' Certificate to such effect.
(b) Subject to the provisions of Section 7.01 hereof, the
Trustee shall be entitled to rely on the delivery to it of a written notice to
the Trustee and the Company by a Person representing itself to be a holder of
Senior Debt (or a trustee, fiduciary or agent therefor) to establish that such
notice has been given by a holder of Senior Debt (or a trustee, fiduciary or
agent therefor); provided, however, that failure to give such notice to the
Company shall not affect in any way the ability of the Trustee to rely on such
notice. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Debt to participate in any payment or distribution pursuant to 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 Debt held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article 10, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 10.10. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee, subject to the provisions of
Section 7.01 hereof, and the Holders shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding-up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Debt and other Indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10.
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Section 10.11. Rights of Trustee as a Holder of
Senior Debt; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article 10 with respect to any Senior Debt
which may at any time be held by it, to the same extent as any other holder of
Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article 10 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Section 10.12. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article 10 in addition to or in place of the Trustee.
Section 10.13. No Suspension of Remedies.
Nothing contained in this Article 10 shall limit the right of
the Trustee or the Holders of Securities to take any action to accelerate the
maturity of the Securities pursuant to Article 6 or to pursue any rights or
remedies hereunder or under applicable law, subject to the rights, if any, under
this Article 10 of the holders, from time to time, of Senior Debt.
ARTICLE 11.
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
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Section 11.02. Notices.
Any notice or communication shall be given in writing and
delivered in person, sent by facsimile, delivered by commercial courier service
or mailed by first-class mail, postage prepaid, addressed as follows:
If to the Company:
FAIRFIELD MANUFACTURING COMPANY, INC.
X.X. 00 Xxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Telecopier: (000) 000-0000
Attention: Corporate Secretary
Copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxxx
If to the Trustee:
UNITED STATES TRUST COMPANY OF NEW YORK
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Telecopier: (000) 000-0000
Attention: Corporate Trust Department
Copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Such notices or communications shall be effective when
received and shall be sufficiently given if so given within the time prescribed
in this Indenture.
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The Company, or the Trustee by written notice to the others
may designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to him by first-class mail, postage prepaid, at his address shown on
the register kept by the Registrar. If a notice or communication to a
Securityholder is mailed in the manner provided above, it shall be deemed duly
given on the date so deposited in the mail, whether or not the addressee
receives it.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders.
In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.
Section 11.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA ss. 312(c).
Section 11.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee at the request of the Trustee:
(1) an Officers' Certificate (which shall include the
statements set forth in Section 11.05 below) in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
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(2) an Opinion of Counsel (which shall include the statements
set forth in Section 11.05 below) in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 11.05. Statements Required in Certificate and Opinion.
Each certificate and opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, it or he
has made such examination or investigation as is necessary to enable it
or him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
Section 11.06. When Treasury Securities Disregarded.
In determining whether the Holders of the required aggregate
principal amount of Securities have concurred in any direction, waiver or
consent, Securities owned by the Company, any Guarantors or any other obligor on
the Securities or by any Affiliate of any of them shall be disregarded as though
they were 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 Securities which the Trustee actually knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith shall
not be disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to
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act with respect to the Securities and that the pledgee is not the Company, a
Guarantors or any other obligor upon the Securities or any Affiliate of any of
them.
Section 11.07. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or
meetings of Securityholders. The Registrar and Paying Agent may make reasonable
rules for their functions.
Section 11.08. Business Days; Legal Holidays.
A "Business Day" is a day that is not a Legal Holiday. A
"Legal Holiday" is a Saturday, a Sunday, a federally-recognized holiday or a day
on which banking institutions are not required to be open in the State of New
York. 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.
Section 11.09. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES.
Section 11.10. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan, security or debt agreement of the Company or any Subsidiary thereof. No
such indenture, loan, security or debt agreement may be used to interpret this
Indenture.
Section 11.11. No Recourse Against Others.
No recourse for the payment of the principal of or premium, if
any, or interest on any of the Securities, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any
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supplemental indenture, or in any of the Securities, or because of the creation
of any Indebtedness represented thereby, shall be had against any stockholder,
officer, director, partner, affiliate, beneficiary or employee, as such, past,
present or future, of the Company or of any successor corporation or against the
property or assets of any such stockholder, officer, employee, partner,
affiliate, beneficiary or director, either directly or through the Company or
any successor corporation thereof, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the Securities
are solely obligations of the Company, and that no such Personal liability
whatever shall attach to, or is or shall be incurred by, any stockholder,
officer, employee, partner, affiliate, beneficiary or director of the Company,
or any successor corporation thereof, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or the Securities or implied
therefrom, and that any and all such Personal liability of, and any and all
claims against every stockholder, officer, employee, partner, affiliate,
beneficiary and director, are hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issuance of the Securities. It is understood that this limitation on
recourse is made expressly for the benefit of any such shareholder, employee,
officer, partner, affiliate, beneficiary or director and may be enforced by any
one or all of them.
Section 11.12. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind their respective successors. All agreements of the
Trustee, any additional trustee and any Paying Agents in this Indenture shall
bind its successor.
Section 11.13. Multiple Counterparts.
The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent one and the same agreement.
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Section 11.14. Table of Contents, Headings, etc.
The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 11.15 Separability.
Each provision of this Indenture shall be considered separable
and if for any reason any provision which is not essential to the effectuation
of the basic purpose of this Indenture or the Securities 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.
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IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed, and the Company's corporate seal to be hereunto affixed and
attested, all as of the date and year first written above.
FAIRFIELD MANUFACTURING COMPANY, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and
Chief Operating Officer
ATTEST:
/s/ XXXXXXX X. XXXX
-------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President Finance
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: /s/ XXXXXXX XXXXXX
----------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice President
ATTEST:
/s/ XXXXXXXX XXXXXXX
-------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Assistant Vice President
EXHIBIT A
CUSIP______
Number
FAIRFIELD MANUFACTURING COMPANY, INC.
11-1/4% SUBORDINATED EXCHANGE DEBENTURE DUE 2009
Fairfield Manufacturing Company, Inc., a Delaware corporation
(the "Company", which term includes any successor corporation), for value
received promises to pay to ________________________ or registered assigns the
principal sum of ___________________ Dollars, on March 15, 2009.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as if set
forth at this place.
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IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers.
FAIRFIELD MANUFACTURING COMPANY, INC.
By:
----------------------------
Title:
By:
----------------------------
Title:
[SEAL]
Certificate of Authentication:
This is one of the 11-1/4% Subordinated
Exchange Debentures due 2009 referred
to in the within-mentioned Indenture
Dated:
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By: ___________________________________
Authorized Signatory
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(REVERSE SIDE)
FAIRFIELD MANUFACTURING COMPANY, INC.
11-1/4% SUBORDINATED EXCHANGE DEBENTURES DUE 2009
1. INTEREST.
Fairfield Manufacturing Company, Inc., a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above. Interest on the Securities will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from .(1) The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing .(2)
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
Notwithstanding anything herewith to the contrary, on each
Interest Payment Date through and including March 15, 2002, the entire amount of
the interest payment on the Securities may be paid, at the option of the
Company, in additional Securities ("Secondary Securities") (valued at 100% of
the principal amount thereof), which Securities shall mature on the Maturity
Date, bear interest from their issue date and be governed by, and subject to the
provisions and conditions of, the Indenture and shall have the same rights and
benefits as Securities previously issued. The Company may, at its option, pay
cash in lieu of issuing any Secondary Security to the extent the principal
amount such Secondary Security is not an integral multiple of $1,000. The
Company shall notify the Trustee by delivery of a Company Request of the
Company's election to pay interest in Secondary Securities not less than 10 days
prior to the Record Date for an Interest Payment Date. On each such Interest
Payment Date, the Trustee shall, upon receipt of an Officers' Certificate,
authenticate Secondary Securities for original issuance to each holder of
Securities on the preceding Record Date, as shown on the Security Register, in
the amount required to pay such interest. For purposes of determining the
principal amount of Secondary Securities to be issued in payment of interest,
the Company shall be entitled to aggregate as to each holder the principal
amount of all Securities and Secondary Securities held of record by such holder.
------------
(1) Insert date of original issuance of Security.
(2) Insert First Interest Payment Date following the date of original issuance
of Security.
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The Company shall pay interest on overdue principal and on
overdue installments of interest from time to time on demand at the rate borne
by the Securities to the extent lawful.
2. METHOD OF PAYMENT.
The Company shall pay interest on this Security provided for
in Paragraph 1 above (except defaulted interest) to the Person who is the
registered Holder of this Security at the close of business on the Record Date
immediately preceding the Interest Payment Date (whether or not such day is a
Business Day). The Holder must surrender this Security to a Paying Agent to
collect principal payments. The Company will pay principal, premium, if any, and
interest payable in cash in money of the United States that at the time of
payment is legal tender for payment of public and private debts; provided,
however, that the Company may pay principal, premium, if any, and interest by
check payable in such money. It may mail an interest check to the Holder's
registered address.
3. PAYING AGENT AND REGISTRAR.
Initially, The United States Trust Company of New York, (the
"Trustee"), will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to the Holders of the Securities.
Neither the Company nor any of its Subsidiaries or Affiliates may act as Paying
Agent but may act as Registrar.
4. INDENTURE; RESTRICTIVE COVENANTS.
The Company issued this Security under an Indenture dated as
of March 12, 1997 (the "Indenture") by and between the Company and the Trustee.
The terms of this Security include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture. This
Security is subject to all such terms, and the Holder of this Security is
referred to the Indenture and said Trust Indenture Act for a statement of them.
All capitalized terms in this Security, unless otherwise defined, have the
meanings assigned to them by the Indenture.
The Securities are general unsecured obligations of the
Company limited to up to $125,000,000 aggregate principal amount. The Indenture
imposes certain restrictions on, among other things, the incurrence of
indebtedness, the issuance of preferred stock by the Company and its
subsidiaries, mergers
A-4
and sale of assets, the payments of dividends on, or the repurchase of, capital
stock of the Company and its subsidiaries, certain other restricted payments by
the Company and its subsidiaries, certain transactions with, and investments in,
its affiliates, and a provision regarding change-of-control transactions. The
restrictions are subject to a number of important qualifications and exceptions.
5. SUBORDINATION.
The Indebtedness represented by the Securities is, to the
extent and in the manner provided in the Indenture, subordinated in right of
payment to the prior indefeasible payment and satisfaction in full in cash of
all existing and future Senior Debt as defined in the Indenture, and this
Security is issued subject to such provisions. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Security shall cease to be so subordinate and subject in right of payment
upon any defeasance of this Security referred to in Paragraph 18 below.
6. OPTIONAL REDEMPTION.
The Company may redeem the Securities, in whole or in part, at
any time on or after March 15, 2002 at the following redemption prices
(expressed as a percentage of principal amount), together, in each case, with
accrued and unpaid interest to the Redemption Date, if redeemed during the
twelve-month period beginning on March 15 of each year listed below:
Year Percentage
2002....................................105.625%
2003....................................104.219%
2004....................................102.813%
2005....................................101.406%
2006 and thereafter................... 100.00%
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed via first class mail at
least 30 days but not more than 60 days prior to the redemption date to each
Holder of Securities to be redeemed at its registered address as it shall appear
on the register of
A-5
the Securities maintained by the Registrar. On and after any Redemption Date,
interest will cease to accrue on the Securities or portions thereof called for
redemption unless the Company shall fail to redeem any such Security.
8. LIMITATION ON DISPOSITION OF ASSETS.
The Indenture requires that certain proceeds from Asset Sales
be used, subject to further limitations contained therein, to make an offer to
purchase certain amounts of Securities in accordance with the procedures set
forth in the Indenture.
9. CHANGE OF CONTROL OFFER.
The Indenture requires the Company to make an offer to
purchase Securities upon the occurrence of a Change of Control occurring on or
after July 2, 2001 in accordance with the procedures set forth in the Indenture.
In addition, upon the occurrence of a Change of Control occurring prior to July
2, 2001, the Company will have the option to offer to purchase the Securities,
in whole but not in part, at a purchase price equal to 101% of the principal
amount thereof, plus, without duplication, accrued and unpaid interest to date
of purchase. If a Change of Control occurs prior to July 2, 2001 and the Company
fails to make an offer to purchase the Securities in accordance with the terms
of the Indenture, the annual interest rate on the Securities will increase by
4.0% over the then-applicable interest rate.
10. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons. A
Holder may register the transfer or exchange of Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Security selected for redemption or
register the transfer of or exchange any Security for a period of 15 days before
a selection of Securities to be redeemed or any Security after it is called for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
11. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the
owner of it for all purposes.
12. UNCLAIMED MONEY.
A-6
If money for the payment of principal, premium or interest on
any Security remains unclaimed for two years, the Trustee or Paying Agent will
pay the money back to the Company at its request. After that, Holders entitled
to money must look to the Company for payment as general creditors unless an
"abandoned property" law designates another Person.
13. AMENDMENT, SUPPLEMENT AND WAIVER.
Subject to certain exceptions, the Indenture or the
Securities may be modified, amended or supplemented by the Company, the
Guarantors, if any, and the Trustee with the consent of the Holders of at least
a majority in principal amount of the Securities then outstanding and any
existing default or compliance with any provision may be waived in a particular
instance with the consent of the Holders of a majority in principal amount of
the Securities then outstanding. Without the consent of Holders, the Company,
the Guarantors, if any, and the Trustee may amend the Indenture or the
Securities or supplement the Indenture for certain specified purposes including
providing for uncertificated Securities in addition to certificated Securities,
and curing any ambiguity, defect or inconsistency, or making any other change
that does not materially and adversely affect the rights of any Holder.
14. SUCCESSOR ENTITY.
When a successor corporation assumes all the obligations of
its predecessor under the Securities and the Indenture and immediately before
and thereafter no Default exists and certain other conditions are satisfied, the
predecessor corporation will be released from those obligations.
15. DEFAULTS AND REMEDIES.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee is not obligated to enforce the Indenture or the
Securities unless it has been offered indemnity or security reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Holders of Securities notice of any
continuing Default or Event of Default (except a Default in
A-7
payment of principal or interest) if it determines in good faith that
withholding notice is in their interest.
16. TRUSTEE DEALINGS WITH THE COMPANY.
The Trustee under the Indenture, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company, its Affiliates, and may otherwise deal with the Company or its
Affiliates, as if it were not Trustee.
17. NO RECOURSE AGAINST OTHERS.
As more fully described in the Indenture, a director, officer,
employee, partner, affiliate, beneficiary or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect or by
reason of, such obligations or their creation. The Holder of this Security by
accepting this Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of this Security.
18. DEFEASANCE AND COVENANT DEFEASANCE.
The Indenture contains provisions for defeasance of the entire
indebtedness on this Security and for defeasance of certain covenants in the
Indenture upon compliance by the Company with certain conditions set forth in
the Indenture.
19. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Holder of
a Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Holders of the Securities.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
A-8
21. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES.
THE COMPANY WILL FURNISH TO ANY HOLDER OF A SECURITY UPON
WRITTEN REQUEST AND WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE
TO: FAIRFIELD MANUFACTURING COMPANY, INC., X.X. 00 Xxxxx, Xxxxxxxxx, Xxxxxxx
00000-0000, Attention: Corporate Secretary.
22. AUTHENTICATION
This Security shall not be valid until the Trustee manually
signs the Certificate of Authentication on the other side of this Security.
A-9
[FORM OF ASSIGNMENT]
I or we assign to
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
-----------------------------------
--------------------------------------------------------------------------------
(please print or type name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
--------------------------------------------------------------------------------
attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.
Dated:
------------------ -----------------------------------
NOTICE: The signature on this
assignment must correspond with the
name as it appears upon the face of
the within Security in every
particular without alteration or
enlargement or any change whatsoever
and be guaranteed by the endorser's
bank or broker.
Signature Guarantee:
-----------------------------------
A-10
EXHIBIT B
ARTICLE 12.
GUARANTEE OF SECURITIES
Section 12.01. Guarantee.
Subject to the provisions of this Article 12, each Guarantor,
by execution of the Guarantee, will jointly and severally unconditionally
guarantee to each Holder and to the Trustee, on behalf of the Holders,
irrespective of the validity and enforceability of this Indenture, the
Securities or the obligations of the Company or any other Guarantors to the
Holders or the Trustee hereunder, that: (i) the due and punctual payment of the
principal of, and premium, if any, and interest on each Security when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal of,
and premium, if any, and interest on the Securities, to the extent lawful, and
the due and punctual performance of all other Obligations of the Company to the
Holders or the Trustee all in accordance with the terms of such Security and
this Indenture, and (ii) in the case of any extension of time of payment or
renewal of any Securities or any of such other Obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, at stated maturity, by acceleration or otherwise. Each
Guarantor, by execution of the Guarantee, will agree that its obligations
thereunder and hereunder shall be absolute and unconditional, irrespective of,
and shall be unaffected by, any invalidity, irregularity or unenforceability of
any such Security or this Indenture, any failure to enforce the provisions of
any such Security or this Indenture, any waiver, modification or indulgence
granted to the Company with respect thereto by the Holder of such Security or
the Trustee, or any other circumstances which may otherwise constitute a legal
or equitable discharge of a surety or such Guarantor.
Each Guarantor, by execution of the Guarantee, will waive
diligence, presentment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest or notice with respect to any such Security or the Indebtedness
evidenced thereby and all demands whatsoever, and will covenant that the
Guarantee will not be discharged as to any such Security except by payment in
full of the principal thereof, premium if any, and interest thereon and as
provided in Section 9.01 hereof. Each Guarantor, by execution of the
Guarantee, will further agree that, as between such Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (i) the maturity of the
Obligations guaranteed by the Guarantee may be accelerated as provided in
Article 6 hereof for the purposes of the Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed thereby, and (ii) 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 each Guarantor for the purpose of the Guarantee. In addition, without
limiting the foregoing provisions, upon the effectiveness of an acceleration
under Article 6 hereof, the Trustee shall promptly make a demand for payment on
the Securities under the Guarantee provided for in this Article 12 and not
discharged. Failure to make such demand shall not affect the validity or
enforceability of the Guarantee upon any Guarantor.
A Guarantee shall not be valid or become obligatory for any
purpose with respect to a Security unless the certificate of authentication on
such Security shall have been signed by or on behalf of the Trustee.
This Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities
are, pursuant to applicable law, rescinded or reduced in amount, or must
otherwise be restored or returned by any obligee on the Securities, whether as a
"voidable preference," "fraudulent transfer" or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Securities shall,
to the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator,
past, present or future, or any Guarantor, as such, shall have any personal
liability under this Guarantee by reason of his, her or its status as such
stockholder, officer, director, employer or incorporator.
The Guarantors shall have the right to seek contribution from
any non-paying Guarantor so long as the
B-2
exercise of such right does not impair the rights of the Holders under this
Guarantee.
Section 12.02. Execution and Delivery of Guarantees.
A Guarantee, substantially in the form of Exhibit F hereto,
shall be executed on behalf of a Guarantor by the manual or facsimile signature
of an Officer of such Guarantor.
If an Officer of a Guarantor whose signature is on the
Guarantee no longer holds that office, such Guarantee shall be valid
nevertheless.
The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Security. Each of
the Guarantors hereby agrees that its Guarantee set forth in Section 12.01
hereof shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation of such Guarantee.
Any Person may become a Guarantor by executing and delivering
to the Trustee (a) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such Person to the provisions of this Indenture
as a Guarantor, and (b) as Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such Person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights and equitable principles as may be acceptable to the Trustee
in its discretion).
Section 12.03. Additional Guarantors.
Any person may become a Guarantor by executing and delivering
to the Trustee (a) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such person to the provisions of this Indenture
as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such person and
constitutes the legal, valid, binding and enforceable obligation of such person
(subject to such customary exceptions concerning fraudulent conveyance laws,
creditors' rights and equitable principles as may be acceptable to the Trustee
in its discretion).
Section 12.04. Limitation of Guarantee.
The obligations of each Guarantor will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor (including, without limitation, any guarantees of
Senior Debt) and after
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giving effect to any collections from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to its contribution obligations under this Indenture,
result in the obligations of such Guarantor under the Guarantee not constituting
a fraudulent conveyance or fraudulent transfer under Federal or state law. Each
Guarantor that makes a payment or distribution under a Guarantee shall be
entitled to a contribution from each other Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Guarantor.
Section 12.05. Release of Guarantors.
A Guarantor shall be released from all of its obligations
under its Guarantee if:
(i) the Guarantor has sold all or substantially all of its
assets or the Company and its Restricted Subsidiaries have sold all of
the Capital Stock of the Guarantor owned by them, in each case in a
transaction in compliance with Sections 4.10 and 5.01 hereof to the
extent applicable; or
(ii) the Guarantor merges with or into or consolidates with,
or transfers all or substantially all of its assets to, the Company or
another Guarantor in a transaction in compliance with Section 5.01
hereof;
and in each such case, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to such transactions have been complied
with.
Section 12.06. Guarantee Obligations Subordinated
to Guarantor Senior Debt.
Each Guarantor, by execution of the Guarantee, will covenant
and agree, and each Holder of Securities, by its acceptance thereof, likewise
covenants and agrees, that to the extent and in the manner hereinafter set forth
in this Article 12, the Indebtedness represented by the Guarantee and the
payment of any obligations pursuant to the Guarantee by such Guarantor are
hereby expressly made subordinate and subject in right of payment as provided in
this Article 12 to the prior indefeasible payment and satisfaction in full in
cash or, as acceptable to the holders of Guarantor Senior Debt of such
Guarantor, in any other manner, of all existing and future Guarantor Senior Debt
of such Guarantor.
This Section 12.06 and the following Sections 12.07 through
12.11 shall constitute a continuing offer to all Persons who, in reliance upon
such provisions, become holders
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of or continue to hold Guarantor Senior Debt of any Guarantor; and such
provisions are made for the benefit of the holders of Guarantor Senior Debt of
each Guarantor; and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
Section 12.07. Payment Over of Proceeds upon Dissolution,
etc., of a Guarantor.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any liquidation, dissolution or other winding-up of any Guarantor, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any general assignment for the benefit of creditors or any other
marshaling of assets or liabilities of any Guarantor, then and in any such
event:
(1) the holders of all Guarantor Senior Debt of such
Guarantors shall be entitled to receive payment and satisfaction in
full in cash or, as acceptable to the holders of such Guarantor Senior
Debt, in any other manner, of all amounts due on or in respect of all
such Guarantor Senior Debt, before the Holders of the Securities are
entitled to receive or retain, pursuant to the Guarantee of such
Guarantor, any payment or distribution of any kind or character by such
Guarantor on account of any of its Obligations on its Guarantee; and
(2) any payment or distribution of assets of such Guarantor of
any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the Holders or the Trustee would be
entitled but for the subordination provisions of this Article 12 shall
be paid by the liquidating trustee or agent or other Person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Guarantor
Senior Debt of such Guarantor or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Guarantor Senior Debt may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Guarantor Senior Debt held or represented by
each, to the extent necessary to make payment in full in cash or, as
acceptable to the Holders of such Guarantor Senior Debt of such
Guarantor, in any other manner, of all such Guarantor Senior Debt
remaining
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unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Guarantor Senior Debt; and
(3) in the event that, notwithstanding the foregoing
provisions of this Section 12.07, the Trustee or the Holder of any
Security shall have received any payment or distribution of assets of
such Guarantor of any kind or character, whether in cash, property or
securities, including, without limitation, by way of set-off or
otherwise, in respect of any of its Obligations on its Guarantee before
all Guarantor Senior Debt of such Guarantor is paid and satisfied in
full in cash or such payment and satisfaction thereof in cash is
provided for, then and in such event such payment or distribution upon
written notice to the Trustee or the Holder of such Security, as the
case may be, shall be held by the Trustee or the Holder of such, as the
case may be, in trust for the benefit of the holders of such Guarantor
Senior Debt and shall be immediately paid over or delivered forthwith
to the liquidating trustee or agent or other Person making payment or
distribution of assets of such Guarantor for application to the payment
of all such Guarantor Senior Debt remaining unpaid, to the extent
necessary to pay all of such Guarantor Senior Debt in full in cash or,
as acceptable to the holders of such Guarantor Senior Debt, any other
manner, after giving effect to any concurrent payment or distribution
to or for the holders of such Guarantor Senior Debt.
The consolidation of a Guarantor with, or the merger of a
Guarantor with or into, another Person or the liquidation or dissolution of a
Guarantor following the transfer of all of its assets (as an entirety or
substantially as an entirety) to another Person upon the terms and conditions
set forth in Article 5 hereof shall not be deemed a dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshaling of assets and liabilities of such Guarantor for the purposes of this
Article 12 if the Person formed by such consolidation or the surviving entity of
such merger or the Person which acquires by transfer such assets (as an entirety
or substantially as an entirety) shall, as a part of such consolidation, merger
or transfer comply with the conditions set forth in such Article 5 hereof.
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Section 12.08. Suspension of Guarantee Obligations When
Guarantor Senior Debt in Default.
(a) Unless Section 10.06 hereof shall be applicable, after the
occurrence of a Payment Default, no payment or distribution of any assets or
securities of a Guarantor (or any Restricted Subsidiary or Subsidiary of such
Guarantor) of any kind or character (including, without limitation, cash,
property and any payment or distribution which may be payable or deliverable by
reason of the payment of any other Indebtedness of such Guarantor being
subordinated to its Obligations on its Guarantee) may be made by or on behalf of
such Guarantor (or any Restricted Subsidiary or Subsidiary of such Guarantor ),
including, without limitation, by way of set-off or otherwise, for or on account
of its Obligations on its Guarantee, and neither the Trustee nor any holder or
owner of any Securities shall take or receive from any Guarantor (or any
Restricted Subsidiary or Subsidiary of such Guarantor), directly or indirectly
in any manner, payment in respect of all or any portion of its Obligations on
its Guarantee following the delivery by the representative of the holders of
Guarantor Senior Debt (the "Guarantors Representative") to the Trustee of
written notice of (i) the occurrence of a Payment Default on Designated Senior
Debt which constitutes Guarantor Senior Debt or (ii) the occurrence of a
Non-Payment Event of Default on Designated Senior Debt which constitutes
Guarantor Senior Debt and the acceleration of the maturity of such Designated
Senior Debt in accordance with its terms, and in any such event, such
prohibition shall continue until such Payment Default is cured, waived in
writing or ceases to exist or such acceleration has been rescinded or otherwise
cured. At such time as the prohibition set forth in the preceding sentence shall
no longer be in effect, subject to the provisions of the following paragraph
(b), such Guarantor shall resume making any and all required payments in respect
of its Obligations under its Guarantee.
(b) Unless Section 12.07 hereof shall be applicable, upon the
occurrence of a Non-Payment Event of Default on Designated Senior Debt which
constitutes Guarantor Senior Debt of any Guarantor, no payment or distribution
of any assets or securities of such Guarantor of any kind or character
(including, without limitation, cash, property and any payment or distribution
which may be payable or deliverable by reason of the payment of any other
Indebtedness of such Guarantor being subordinated to its Obligations on its
Guarantee) shall be made by such Guarantor, including, without limitation, by
way of set-off or otherwise, for or on account of any of its Obligations on its
Guarantee, and neither the Trustee nor any holder or owner of any Securities
shall take or receive from any Guarantor (or any Restricted Subsidiary or
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Subsidiary of such Guarantor), directly or indirectly in any manner, payment in
respect of all or any portion of its Obligations on its Guarantee for a period
(a "Guarantee Payment Blockage Period") commencing on the date of receipt by the
Trustee of written notice from the Guarantor Representative of such Non-Payment
Event of Default, unless and until (subject to any blockage of payments that may
then be in effect under the preceding paragraph (a)) the earliest to occur of
the following events: (x) more than 179 days shall have elapsed since the date
of receipt of such written notice by the Trustee, (y) such Non-Payment Event of
Default shall have been cured or waived in writing or shall have ceased to exist
or such Designated Senior Debt shall have been paid in full in cash and the
Trustee has been so notified by either the Guarantor Representative or such
Guarantor or (z) such Guarantee Payment Blockage Period shall have been
terminated by written notice to such Guarantor or the Trustee from the Guarantor
Representative, after which, in the case of clause (x), (y) or (z), such
Guarantor shall resume making any and all required payments in respect of its
Obligations on its Guarantee. Notwithstanding any other provisions of this
Indenture, no event of default with respect to Designated Senior Debt which
constitutes Guarantor Senior Debt (other than a Payment Default) which existed
or was continuing on the date of the commencement of any Guarantee Payment
Blockage Period initiated by the Guarantor Representative shall be, or be made,
the basis for the commencement of a second Guarantee Payment Blockage Period
initiated by the Guarantor Representative unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days. In
no event shall a Guarantee Payment Blockage Period extend beyond 179 days from
the date of the receipt by the Trustee of the notice referred to in this Section
12.08(b) or, in the event of a Non-Payment Event of Default which formed the
basis for a Payment Blockage Period under Section 10.03(b) hereof, 179 days from
the date of the receipt by the Trustee of the notice referred to in Section
12.08(b) (the "Initial Guarantee Blockage Period"). Any number of additional
Guarantee Payment Blockage Periods may be commenced during the Initial Guarantee
Blockage Period; provided, however, that no such additional Guarantee Payment
Blockage Period shall extend beyond the Initial Guarantee Blockage Period. After
the expiration of the Initial Guarantee Blockage Period, no Guarantee Payment
Blockage Period may be commenced under this Section 12.08(b) and no Payment
Blockage Period may be commenced under Section 10.03(b) hereof until at least
180 consecutive days have elapsed from the last day of the Initial Guarantee
Blockage Period. Notwithstanding anything in the Indenture to the contrary, no
Non-Payment Event of Default with respect to Designated Senior Debt which
existed or was continuing on the date of the commencement of any Guarantee
Payment Blockage Period initiated by the Guarantor
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Representative shall be, or be made, the basis for the commencement of a Second
Guarantee Payment Blockage Period initiated by the Guarantor Representative
whether or not within the Initial Guarantee Blockage Period, unless such
Non-Payment Event of Default shall have been waived for a period of not less
than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the
Trustee or the Holder of any Security shall have received any payment from a
Guarantor prohibited by the foregoing provisions of this Section 12.08, then and
in such event such payment shall be paid over and delivered forthwith to the
Guarantor Representative initiating the Guarantee Payment Blockage Period, in
trust for distribution to the holders of Guarantor Senior Debt or, if no amounts
are then due in respect of Guarantor Senior Debt, promptly returned to the
Guarantor, or as a court of competent jurisdiction shall direct.
Section 12.09. Subrogation to Rights of Holders
of Guarantor Senior Debt.
Upon the payment in full of all amounts payable under or in
respect of all Guarantor Senior Debt of a Guarantor, the Holders shall be
subrogated to the rights of the holders of such Guarantor Senior Debt to receive
payments and distributions of cash, property and securities of such Guarantor
made on such Guarantor Senior Debt until all amounts due to be paid under the
Guarantee shall be paid in full. For the purposes of such subrogation, no
payments or distributions to holders of Guarantor Senior Debt of any cash,
property or securities to which Holders of the Securities or the Trustee would
be entitled except for the provisions of this Article 12, and no payments over
pursuant to the provisions of this Article 12 to holders of Guarantor Senior
Debt by Holders of the Securities or the Trustee, shall, as among each
Guarantor, its creditors other than holders of Guarantor Senior Debt and the
Holders of the Securities, be deemed to be a payment or distribution by such
Guarantor to or on account of such Guarantor Senior Debt.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article 12 shall
have been applied, pursuant to the provisions of this Article 12, to the payment
of all amounts payable under Guarantor Senior Debt, then and in such case, the
Holders shall be entitled to receive from the holders of such Guarantor Senior
Debt at the time outstanding any payments or distributions received by such
holders of Guarantor Senior Debt in excess of the amount sufficient to
indefeasibly pay all amounts payable under or in respect of such Guarantor
Senior Debt in full in cash.
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Section 12.10. Guarantee Subordination Provisions
Solely to Define Relative Rights.
The subordination provisions of this Article 12 are and are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Guarantor Senior Debt on
the other hand. Nothing contained in this Article 12 or elsewhere in this
Indenture or in the Securities is intended to or shall (a) impair, as among each
Guarantor, its creditors other than holders of its Guarantor Senior Debt and the
Holders of the Securities, the obligation of such Guarantor, which is absolute
and unconditional, to make payments to the Holders in respect of its Obligations
on its Guarantee in accordance with its terms; or (b) affect the relative rights
against such Guarantor of the Holders of the Securities and creditors of such
Guarantor other than the holders of the Guarantor Senior Debt; or (c) prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon a Default or an Event of Default under this
Indenture, subject to the rights, if any, under this Article 12 of the holders
of Guarantor Senior Debt (1) in any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, arrangement, reorganization or other similar
case or proceeding in connection therewith or any liquidation, dissolution or
other winding-up, or any assignment for the benefit of creditors or other
marshaling of assets and liabilities referred to in Section 12.07 hereof, to
receive, pursuant to and in accordance with such Section, cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder, or
(2) under the conditions specified in Section 12.07 hereof, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
12.08(c) hereof.
The failure by any Guarantor to make a payment in respect of
its obligations on its Guarantee by reason of any provision of this Article 12
shall not be construed as preventing the occurrence of a Default or an Event of
Default hereunder.
Section 12.11. Application of Certain
Article 10 Provisions.
The provisions of Sections 10.04, 10.05, 10.07, 10.08, 10.09,
10.10, 10.11, 10.12 and 10.13 hereof shall apply, mutatis mutandis, to each
Guarantor and its respective holders of Guarantor Senior Debt and the rights,
duties and obligations set forth therein shall govern the rights, duties and
obligations of each Guarantor, the holders of Guarantor Senior Debt, the Holders
and the Trustee with respect to the
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Guarantee and all references therein to Article 10 hereof shall mean this
Article 12.
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EXHIBIT C
FORM OF GUARANTEE
The undersigned (the "Guarantor") hereby unconditionally
guarantees, on a senior subordinated basis, jointly and severally with all other
guarantors under the Indenture dated as of , 1997 by and between
Fairfield Manufacturing Company, Inc., a Delaware corporation, and United States
Trust Company of New York, as trustee (as amended, restated or supplemented from
time to time, the "Indenture"), to the extent set forth in the Indenture and
subject to the provisions of the Indenture, (a) the due and punctual payment of
the principal of and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on overdue
principal, and, to the extent permitted by law, interest, and the due and
punctual performance of all other obligations of the Company to the
Securityholders or the Trustee all in accordance with the terms set forth in
Article 12 of the Indenture, and (b) in case of any extension of time of payment
or renewal of any Securities or any of such other obligations, that the 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.
The obligations of the Guarantors to the Securityholders and
to the Trustee pursuant to this Guarantee and the Indenture are expressly set
forth in Article 12 of the Indenture and reference is hereby made to the
Indenture for the precise terms and limitations of this Guarantee.
Guarantor:
By:
---------------------------
Name:
Title:
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