Exhibit 4.1
INDENTURE
Dated as of November 24, 1998
among
CARROLS CORPORATION, as Issuer,
The GUARANTORS named herein
and
IBJ XXXXXXXX BANK & TRUST COMPANY, as Trustee
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$170,000,000
9 1/2% Senior Subordinated Notes due 2008, Series A
9 1/2% Senior Subordinated Notes due 2008, Series B
CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
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ss. 310(a)(1).............................................................. 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)............................................................... 7.08, 7.10.
(b).................................................................. 7.08; 7.10; 13.02
(c).................................................................. N.A.
ss. 311(a).................................................................. 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
ss.312(a).................................................................. 2.05
(b).................................................................. 13.03
(c).................................................................. 13.03
ss.313(a).................................................................. 7.06
(b)(1)............................................................... 7.06
(b)(2)............................................................... 7.06
(c).................................................................. 7.06; 13.02
(d).................................................................. 7.06
ss.314(a).................................................................. 4.11; 4.12; 13.02
(b).................................................................. N.A.
(c)(1)............................................................... 13.04
(c)(2)............................................................... 13.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e).................................................................. 13.05
(f).................................................................. N.A.
ss.315(a).................................................................. 7.01(b)
(b).................................................................. 7.05; 13.02
(c).................................................................. 7.01(a)
(d).................................................................. 7.01(c)
(e).................................................................. 6.11
ss.316(a)(last sentence)................................................... 2.09
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.07
(c).................................................................. 10.04
ss.317(a)(1)............................................................... 6.08
(a)(2)............................................................... 6.09
(b).................................................................. 2.04
ss.318(a).................................................................. 13.01
----------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................................................1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act..............................................24
SECTION 1.03. Rules of Construction..........................................................................25
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating................................................................................26
SECTION 2.02. Execution and Authentication...................................................................27
SECTION 2.03. Registrar and Paying Agent.....................................................................28
SECTION 2.04. Paying Agent To Hold Assets in Trust...........................................................29
SECTION 2.05. Holder Lists...................................................................................29
SECTION 2.06. Transfer and Exchange..........................................................................29
SECTION 2.07. Replacement Securities.........................................................................30
SECTION 2.08. Outstanding Securities.........................................................................30
SECTION 2.09. Treasury Securities............................................................................31
SECTION 2.10. Temporary Securities...........................................................................31
SECTION 2.11. Cancellation...................................................................................32
SECTION 2.12. Defaulted Interest.............................................................................32
SECTION 2.13. CUSIP Number...................................................................................32
SECTION 2.14. Deposit of Moneys..............................................................................33
SECTION 2.15. Book-Entry Provisions for Global Securities....................................................33
SECTION 2.16. Registration of Transfers and Exchanges........................................................34
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................................................40
SECTION 3.02. Selection of Securities To Be Redeemed.........................................................40
SECTION 3.03. Notice of Redemption...........................................................................40
SECTION 3.04. Effect of Notice of Redemption.................................................................41
SECTION 3.05. Deposit of Redemption Price....................................................................42
SECTION 3.06. Securities Redeemed in Part....................................................................42
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ARTICLE FOUR COVENANTS
42
SECTION 4.01. Payment of Securities..........................................................................42
SECTION 4.02. Maintenance of Office or Agency................................................................43
SECTION 4.03. Limitation on Incurrence of Additional Indebtedness and Issuance of
Disqualified Capital Stock...................................................................43
SECTION 4.04. Limitation on Senior Subordinated Indebtedness.................................................43
SECTION 4.05. Limitation on Restricted Payments..............................................................44
SECTION 4.06. Limitation on Asset Sales......................................................................46
SECTION 4.07. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries...................49
SECTION 4.08. Limitation on Liens............................................................................50
SECTION 4.09. Limitations on Transactions with Affiliates....................................................51
SECTION 4.10. Change of Control..............................................................................51
SECTION 4.11. Additional Subsidiary Guarantees...............................................................54
SECTION 4.12. Designation of Unrestricted Subsidiaries.......................................................54
SECTION 4.13. Conduct of Business............................................................................55
SECTION 4.14. Reports to Holders.............................................................................55
SECTION 4.15. Corporate Existence............................................................................56
SECTION 4.16. Payment of Taxes and Other Claims..............................................................56
SECTION 4.17. Notice of Defaults.............................................................................57
SECTION 4.18. Maintenance of Properties and Insurance........................................................57
SECTION 4.19. Compliance Certificate.........................................................................58
SECTION 4.20. Waiver of Stay, Extension or Usury Laws........................................................58
SECTION 4.21. Payments for Consent...........................................................................58
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.......................................................59
SECTION 5.02. Successor Corporation Substituted..............................................................60
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..............................................................................61
SECTION 6.02. Acceleration...................................................................................62
SECTION 6.03. Other Remedies.................................................................................63
SECTION 6.04. Waiver of Past Default.........................................................................63
SECTION 6.05. Control by Majority............................................................................64
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SECTION 6.06. Limitation on Suits............................................................................64
SECTION 6.07. Rights of Holders To Receive Payment...........................................................65
SECTION 6.08. Collection Suit by Trustee.....................................................................65
SECTION 6.09. Trustee May File Proofs of Claim...............................................................65
SECTION 6.10. Priorities.....................................................................................66
SECTION 6.11. Undertaking for Costs..........................................................................66
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................................................67
SECTION 7.02. Rights of Trustee..............................................................................68
SECTION 7.03. Individual Rights of Trustee...................................................................69
SECTION 7.04. Trustee's Disclaimer...........................................................................69
SECTION 7.05. Notice of Defaults.............................................................................70
SECTION 7.06. Reports by Trustee to Holders..................................................................70
SECTION 7.07. Compensation and Indemnity.....................................................................70
SECTION 7.08. Replacement of Trustee.........................................................................72
SECTION 7.09. Successor Trustee by Merger, etc...............................................................73
SECTION 7.10. Eligibility; Disqualification..................................................................73
SECTION 7.11. Preferential Collection of Claims Against Company..............................................73
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.................................................73
SECTION 8.02. No Payment on Securities in Certain Circumstances..............................................74
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.................................................75
SECTION 8.04. Subrogation....................................................................................77
SECTION 8.05. Obligations of Company Unconditional...........................................................77
SECTION 8.06. Notice to Trustee..............................................................................78
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.................................79
SECTION 8.08. Trustee's Relation to Senior Indebtedness......................................................79
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the Company or
Holders of Senior Indebtedness.........................................................79
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of Securities............................80
SECTION 8.11. This Article Not To Prevent Events of Default..................................................80
SECTION 8.12. Trustee's Compensation Not Prejudiced..........................................................80
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SECTION 8.13. No Waiver of Subordination Provisions..........................................................80
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust for Holders;
Payments May Be Paid Prior to Dissolution..............................................81
SECTION 8.15. Acceleration of Securities.....................................................................81
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations...........................................................81
SECTION 9.02. Legal Defeasance and Covenant Defeasance.......................................................82
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance..........................................83
SECTION 9.04. Application of Trust Money.....................................................................85
SECTION 9.05. Repayment to Company...........................................................................85
SECTION 9.06. Reinstatement..................................................................................85
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders....................................................................86
SECTION 10.02. With Consent of Holders.......................................................................87
SECTION 10.03. Compliance with Trust Indenture Act...........................................................89
SECTION 10.04. Revocation and Effect of Consents.............................................................89
SECTION 10.05. Notation on or Exchange of Securities.........................................................90
SECTION 10.06. Trustee To Sign Amendments, etc...............................................................90
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.......................................................................90
SECTION 11.02. Severability..................................................................................91
SECTION 11.03. Release of a Guarantor........................................................................91
SECTION 11.04. Limitation of Guarantor's Liability...........................................................92
SECTION 11.05. Contribution..................................................................................92
SECTION 11.06. Execution of Security Guarantee...............................................................92
SECTION 11.07. Subordination of Subrogation and Other Rights.................................................93
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ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior Indebtedness...........................93
SECTION 12.02. Payment Over of Proceeds upon Dissolution, etc................................................94
SECTION 12.03. Subrogation...................................................................................95
SECTION 12.04. Obligations of Guarantors Unconditional.......................................................96
SECTION 12.05. Notice to Trustee.............................................................................96
SECTION 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent................................97
SECTION 12.07. Trustee's Relation to Guarantor Senior Indebtedness...........................................97
SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions of the Guarantors or
Holders of Guarantor Senior Indebtedness...............................................98
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of Guarantee............................98
SECTION 12.10. This Article Not To Prevent Events of Default.................................................99
SECTION 12.11. Trustee's Compensation Not Prejudiced.........................................................99
SECTION 12.12. No Waiver of Guarantee Subordination Provisions...............................................99
SECTION 12.13. Payments May Be Paid Prior to Dissolution.....................................................99
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.................................................................100
SECTION 13.02. Notices......................................................................................100
SECTION 13.03. Communications by Holders with Other Holders.................................................102
SECTION 13.04. Certificate and Opinion as to Conditions Precedent...........................................102
SECTION 13.05. Statements Required in Certificate or Opinion................................................102
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar....................................................103
SECTION 13.07. Governing Law................................................................................103
SECTION 13.08. No Recourse Against Others...................................................................103
SECTION 13.09. Successors...................................................................................103
SECTION 13.10. Counterpart Originals........................................................................103
SECTION 13.11. Severability.................................................................................103
SECTION 13.12. No Adverse Interpretation of Other Agreements................................................104
SECTION 13.13. Legal Holidays...............................................................................104
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SIGNATURES..................................................................................................S-1
EXHIBIT A Form of Series A Security.................................................................A-1
EXHIBIT B Form of Series B Security.................................................................B-1
EXHIBIT C Form of Legend for Global Securities......................................................C-1
EXHIBIT D Form of Transfer Certificate..............................................................D-1
EXHIBIT E Form of Transfer Certificate for Institutional Accredited Investors.......................E-1
EXHIBIT F Form of Certificate for Regulation S Transfers............................................F-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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INDENTURE dated as of November 24, 1998, among CARROLS CORPORATION, a
Delaware corporation (the "Company"), the GUARANTORS named herein and IBJ
XXXXXXXX BANK & TRUST COMPANY, a New York banking corporation, as trustee (the
"Trustee").
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
or at the time it merges or consolidates with the Company or any of its
Restricted Subsidiaries or assumed in connection with the acquisition of assets
from such Person and in each case not incurred by such Person in connection
with, or in anticipation or contemplation of, such Person becoming a Restricted
Subsidiary or such acquisition, merger or consolidation.
"Affiliate" means, with respect to any specified Person, any other
Person who directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person.
The term "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative of the
foregoing.
"Affiliate Transaction" has the meaning set forth in Section 4.09(a).
"Agent" means any Registrar, Paying Agent or co-Registrar.
"amend" means amend, modify, supplement, restate or amend and restate,
including successively; and "amending" and "amended" have correlative meanings.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary of the Company or any Restricted Subsidiary, or
shall be merged with or into the Company or any Restricted Subsidiary, or (b)
the acquisition by the Company or any Re-
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stricted Subsidiary of the assets of any Person (other than a Restricted
Subsidiary) which constitute all or substantially all of the assets of such
Person or comprise any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary
course of business), assignment or other transfer for value by the Company or
any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person of (a) any Capital Stock of any Restricted
Subsidiary; or (b) any other property or assets of the Company or any
Restricted Subsidiary other than in the ordinary course of business; provided,
however, that Asset Sales shall not include (i) a transaction or series of
related transactions for which the Company or its Restricted Subsidiaries
receive aggregate consideration of less than $1.5 million, (ii) the sale,
lease, conveyance, disposition or other transfer of all or substantially all of
the assets of the Company as permitted by Section 5.01, (iii) the Pollo
Sale-Leaseback or (iv) transactions resulting in a Partnership Investment and a
Partnership Loan.
"Bankruptcy Law" has the meaning set forth in Section 6.01.
"Basket" has the meaning set forth in Section 4.05.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Saturday, a Sunday or a day
on which banking institutions in New York, New York are not required to be
open.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate 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 of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations
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at any date shall be the capitalized amount of such obligations at such date,
determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $250,000,000;
(v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events (whether or not approved by the Board of Directors of the
Company): (i) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the assets
of the Company to any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (whether or not otherwise in compliance with the provisions of this
Indenture); other than to the Permitted Holders; (ii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) prior to the earlier
to occur of (A) the first public offering of Capital Stock of Holdings or (B)
the first public offering of Capital Stock of the Company, either (1) the
Permitted Holders cease to be 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 shares that any such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 45% in the aggregate of the total
voting power of the Voting Stock of the Company, whether as a result of
issuance of securities of the Company, any merger, consolidation, liquidation
or dissolution of the Company, any direct or indirect transfer of securi-
-4-
ties by Holdings or otherwise or (2) any "person" (as such term is used in
Section 13(d) and 14(d) of the Exchange Act), other than the Permitted Holders,
is or becomes the beneficial owner (as defined above), directly or indirectly,
of more of the total voting power of the voting stock of the Company than the
Permitted Holders; (iv) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in clause (iii) above), directly or
indirectly, of more than 30% of the total voting power of the Voting Stock of
the Company; provided, however, that the Permitted Holders "beneficially own"
(as so defined), directly or indirectly, in the aggregate a lesser percentage
of the total voting power of the Voting Stock of the Company than such other
person and do not have the right or ability by voting power, contract or
otherwise to elect designate for election a majority of the Board of Directors
of the Company; or (v) the replacement of a majority of the Board of Directors
of the Company over a two-year period from the directors who constituted the
Board of Directors of the Company at the beginning of such period, and such
replacement shall not have been approved by a vote of at least a majority of
the Board of Directors of the Company then still in office who either were
members of such Board of Directors at the beginning of such period or whose
election as a member of such Board of Directors was previously so approved.
"Change of Control Date" has the meaning set forth in Section 4.10(a).
"Change of Control Offer" has the meaning set forth in Section
4.10(a).
"Change of Control Payment Date" has the meaning set forth in Section
4.10(c)(2).
"Commodity Obligations" means the obligations of any Person pursuant
to any commodity futures contract, commodity option or other similar agreement
or arrangement.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation,
all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the
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Board, its President, a Vice President or its Treasurer, and by
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii)
to the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary, unusual or nonrecurring gains or losses or taxes attributable to
sales or dispositions outside the ordinary course of business), (B)
Consolidated Interest Expense and (C) Consolidated Non-cash Charges, less any
non-cash items increasing Consolidated Net Income for such period, all as
determined on a consolidated basis for such Person and its Restricted
Subsidiaries in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to 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 (calculated in accordance with Regulation S-X under the Securities
Act) for the period of such calculation to (i) the incurrence or repayment of
any Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the proceeds thereof), other than the incurrence or repayment of
Indebtedness in the ordinary course of business for working capital purposes
pursuant to working capital facilities, occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such incurrence or repayment, as the
case may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period and (ii) 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 Restricted
Subsidiary as a result of the Asset Acquisition) incurring, assuming or
otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA attributable to the assets which are the subject of the
Asset Acquisition or Asset Sale during the Four Quarter Period) occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition (including the incurrence, assumption or liability
for any such Acquired Indebtedness) occurred on the first day of the Four
Quarter Period. If such Person or any of its Restricted Subsidiaries directly
or indirectly guarantees Indebtedness of a third Person, the pre-
-6-
ceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) 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; and (2) notwithstanding clause (1) above, interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such
agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense,
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person or its Restricted Subsidiaries (other than
dividends paid in Qualified Capital Stock and other than dividends paid with
respect to such Preferred Stock held by such Person or its Restricted
Subsidiaries) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated federal, state
and local tax rate of such Person, expressed as a decimal.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum of, without duplication: (i) the aggregate of the interest
expense of such Person and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP, including without
limitation, (a) any amortization of debt discount and amortization or write-off
of deferred financing costs, (b) the net costs under Interest Swap Obligations,
Currency Swap Obligations and Commodity Obligations, (c) all capitalized
interest and (d) the interest portion of any deferred payment obligation; and
(ii) the interest component of Capitalized Lease Obligations, in each case
paid, accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided that there shall be excluded therefrom (a) after-tax gains
from Asset Sales or abandonments or reserves relating thereto, (b) after-tax
items classified as extraordinary or nonrecurring gains, (c) the net income of
any Person acquired in a "pooling of interests" transaction accrued prior to
the date it becomes a Restricted Subsidiary of the referent Person or is merged
or consolidated with the
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referent Person or any Restricted Subsidiary of the referent Person, (d) the
net income (but not loss) of any Restricted Subsidiary of the referent Person
to the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is restricted by a contract,
operation of law or otherwise, (e) the net income of any Person, other than a
Restricted Subsidiary of the referent Person, except, for purposes of Section
4.05, to the extent of cash dividends or distributions paid to the referent
Person or to a Restricted Subsidiary of the referent Person by such Person
unless, and to the extent, in the case of a Restricted Subsidiary who receives
such dividends or distributions, such Restricted Subsidiary is subject to
clause (d) above, (f) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Issue Date, (g)
income or loss attributable to discontinued operations (including, without
limitation, operations disposed of during such period whether or not such
operations were classified as discontinued), and (h) in the case of a successor
to the referent Person by consolidation or merger or as a transferee of the
referent Person's assets, any earnings of the successor corporation prior to
such consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for
any period, the aggregate depreciation, amortization and other non-cash
expenses 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 (excluding any such
charges constituting an extraordinary item or loss or any such charge which
requires an accrual of or a reserve for cash charges for any future period).
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 or such other address as the Trustee may
give notice to the Company.
"Currency Swap Obligations" means the obligations of any Person
pursuant to any foreign exchange contract, currency swap agreement or similar
agreement.
"Custodian" has the meaning set forth in Section 6.01.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Defeasance Trust Payment" see Section 8.02.
-8-
"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 must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (a) any Indebtedness
outstanding under the Senior Credit Facility and (b) any other Senior
Indebtedness which, at the time of determination, has an aggregate principal
amount outstanding, together with any commitments to lend additional amounts,
of at least $20 million, if the instrument governing such Senior Indebtedness
expressly states that such Indebtedness is "Designated Senior Indebtedness" for
purposes of this Indenture and a Board Resolution setting forth such
designation by the Company has been filed with the Trustee.
"Designation" has the meaning set forth in Section 4.12(a).
"Designation Amount" has the meaning set forth in Section 4.12(a).
"Disqualified Capital Stock" means that portion of 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 or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof on or prior to the final maturity date of the Securities.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute or statutes thereto.
"Exchange Securities" means the 9 1/2% Senior Subordinated Notes due
2008, Series B, to be issued in exchange for the Initial Securities pursuant to
the Registration Rights Agreement.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of
whom is under undue pressure or compulsion to complete the transaction. Fair
market value shall be determined by the Board of Directors of the Company
acting reasonably and in good faith and shall be evidenced by a Board
Resolution of the Board of Directors of the Company delivered to the Trustee.
"Final Maturity Date" means December 1, 2008.
-9-
"Four Quarter Period" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio" above.
"Funding Guarantor" has the meaning set forth in Section 11.05.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect as of the Issue Date.
"Global Securities" means one or more 144A Global Securities,
Regulation S Global Securities and IAI Global Securities.
"Group" has the meaning set forth in the definition of "Change of
Control" above.
"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. A guarantee shall include,
without limitation, any agreement to maintain or preserve any other Person's
financial condition or to cause any other Person to achieve certain levels of
operating results.
"Guarantee" or "Security Guarantee" has the meaning set forth in
Section 11.01.
"Guarantor" means (i) each of Carrols Realty Holdings Corp., Carrols
Realty I Corp., Carrols Realty II Corp., Xxxxxxx X.X. Corp., Quanta Advertising
Corp., Pollo Franchise, Inc. and Pollo Operations, Inc. and (ii) each of the
Company's Restricted Subsidiaries that in the future executes a supplemental
indenture in which such Restricted Subsidiary agrees to be bound by the terms
of this Indenture as a Guarantor; provided that any Person constituting a
Guarantor as described above shall cease to constitute a Guarantor when its
respective Guarantee is released in accordance with the terms of this
Indenture.
"Guarantor Senior Indebtedness" means, with respect to any Guarantor,
at any date, (a) all obligations of such Guarantor under the Senior Credit
Facility; (b) all Interest
-10-
Swap Obligations, Currency Swap Obligations and Commodity Obligations of such
Guarantor; (c) all obligations of such Guarantor under standby letters of
credit; and (d) all other Indebtedness of such Guarantor, including principal,
premium, if any, and interest (including Post-Petition Interest) on such
Indebtedness, unless the instrument under which such Indebtedness of such
Guarantor is incurred expressly provides that such Indebtedness for money
borrowed is not senior or superior in right of payment to the Guarantee of such
Guarantor, and all renewals, extensions, modifications, amendments or
refinancings thereof. Notwithstanding the foregoing, Guarantor Senior
Indebtedness shall not include (a) to the extent that it may constitute
Indebtedness, any obligation for federal, state, local or other taxes; (b) any
Indebtedness among or between such Guarantor and the Company or any Subsidiary
of the Company or any Affiliate of the Company or any of such Affiliate's
Subsidiaries; (c) to the extent that it may constitute Indebtedness, any
obligation in respect of any trade payable incurred for the purchase of goods
or materials, or for services obtained, in the ordinary course of business; (d)
that portion of any Indebtedness that is incurred in violation of this
Indenture; (e) Indebtedness evidenced by the Guarantees; (f) Indebtedness of
such Guarantor that is expressly subordinate or junior in right of payment to
any other Indebtedness of such Guarantor; (g) to the extent that it may
constitute Indebtedness, any obligation owing under leases (other than
Capitalized Lease Obligations) or management agreements; and (h) any obligation
that by operation of law is subordinate to any general unsecured obligations of
such Guarantor. No Indebtedness shall be deemed to be subordinated to other
Indebtedness solely because such other Indebtedness is secured.
"Holder" means the registered holder of any Security.
"Holdings" means Carrols Holdings Corporation, which owns all of the
outstanding Capital Stock of the Company.
"IAI Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities sold to
Institutional Accredited Investors.
"incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, in respect of such Indebtedness or other
obligation or the recording, as required pursuant to GAAP or otherwise, of any
such Indebtedness or other obligation on the balance sheet of such Person (and
"incurrence," "incurred" and "incurring" shall have meanings correlative to the
foregoing). Indebtedness of a Person existing at the time such Person becomes a
Restricted Subsidiary or is merged or consolidated with or into the Company or
any Restricted Subsidiary shall be
-11-
deemed to be incurred at such time. The accrual of interest or the accretion of
original issue discount shall not be deemed to be an incurrence.
"Indebtedness" means with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) all indebtedness
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all
indebtedness of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all obligations under any title
retention agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue by
90 days or more or are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted), (v) reimbursement obligations of
such Person on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
indebtedness or obligations referred to in clauses (i) through (v) above and
clause (viii) below, (vii) all obligations of any other Person of the type
referred to in clauses (i) through (vi) which are secured by any lien on any
property or asset of such Person, the amount of such obligation being deemed to
be the lesser of the fair market value of such property or asset or the amount
of the obligation so secured, (viii) all Interest Swap Obligations, Currency
Swap Obligations and Commodity Obligations of such Person, and (ix) all
Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal to the
greater of its voluntary or involuntary liquidation preference and its maximum
fixed repurchase price, but excluding accrued dividends, if any. For purposes
hereof, 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 this 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 reasonably and in good faith
by the Board of Directors of the issuer of such Disqualified Capital Stock.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified
to perform the task for which it is to be engaged.
"Initial Purchasers" means Chase Securities Inc. and NationsBanc
Xxxxxxxxxx Securities LLC.
-12-
"Initial Securities" means the 9 1/2% Senior Subordinated Notes due
2008, Series A, of the Company.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of any cash
interest and any Additional Interest (as defined in the Registration Rights
Agreement) on the Securities.
"Interest Payment Date" means each semiannual interest payment date on
June 1 and December 1 of each year, commencing June 1, 1999.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the
November 15 or May 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Interest Swap Obligations" 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
other 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 (including, without limitation, a 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 purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude extensions of trade credit by
the Company and its Restricted Subsidiaries on commercially reasonable terms in
accordance with normal trade practices of the Company or such Restricted
Subsidiary, as the case may be. For the purposes of Section 4.05, (i)
"Investment" shall include the applicable Designation Amount at the time
-13-
of the Designation of any Restricted Subsidiary as an Unrestricted Subsidiary
and shall exclude the fair market value of the Company's proportionate interest
in the net worth of such Unrestricted Subsidiary at the time of the Revocation
with respect to such Unrestricted Subsidiary and (ii) the amount of any
Investment shall be the original cost of such Investment plus the cost of all
additional Investments by the Company or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions in connection with such Investment or any
other amounts received in respect of such Investment; provided that no such
payment of dividends or distributions or receipt of any such other amounts
shall reduce the amount of any Investment if such payment of dividends or
distributions or receipt of any such amounts would be included in Consolidated
Net Income. If the Company or any Restricted Subsidiary sells or otherwise
disposes of any Common Stock of any direct or indirect Restricted Subsidiary
such that, after giving effect to any such sale or disposition, the Company no
longer owns, directly or indirectly, greater than 50% of the outstanding Common
Stock of such Restricted Subsidiary, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Common Stock of such Restricted Subsidiary not sold or
disposed of.
"Issue Date" means the original issue date of the Securities, November
24, 1998.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Xxxxx'x" has the meaning set forth in the definition of "Cash
Equivalents" above.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds 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 (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions), (b) taxes paid or payable after
taking into account any reduction in consolidated tax liability due to
available tax credits or deductions and any tax sharing arrangements, (c)
repayment of Indebtedness that is required to be repaid in connection with such
Asset Sale and (d) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance with
GAAP, against any liabilities associated with such Asset Sale and retained by
the Company or any Restricted
14
Subsidiary, 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.
"Net Proceeds Offer" has the meaning set forth in Section 4.06(a).
"Net Proceeds Offer Amount" has the meaning set forth in Section
4.06(a).
"Net Proceeds Offer Payment Date" has the meaning set forth in Section
4.06(a).
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
4.06(a).
"Officer" means the Chairman, any Vice Chairman, the President, any
Vice President, the Chief Financial Officer, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company
complying with Sections 13.04 and 13.05.
"144A Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Participants" has the meaning set forth in Section 2.15.
"Partnership Investments" mean Investments by the Company or a
Restricted Subsidiary in a partnership (i) which holds one or more Burger King
franchises, (ii) in which the Company or a Restricted Subsidiary has at least a
20% equity interest and the remaining equity interest is held by a former
employee of the Company or a Restricted Subsidiary and (iii) which has
outstanding Partnership Loans, consistent with past practice.
"Partnership Loans" means loans made by the Company or a Restricted
Subsidiary to an entity (i) in which the Company or a Restricted Subsidiary has
a Partnership Investment and (ii) which finance the acquisition of assets from
the Company or a Restricted Subsidiary at fair market value.
-15-
"Paying Agent" has the meaning set forth in Section 2.03.
"Payment Blockage Notice" see Section 8.02(a).
"Payment Blockage Period" see Section 8.02(a).
"Permitted Business" means the business conducted by the Company and
the Restricted Subsidiaries on the Issue Date and other businesses similar
thereto or reasonably related thereto.
"Permitted Holders" means Atlantic Restaurants, Inc., Madison Dearborn
Capital Partners, L.P., Madison Dearborn Capital Partners II, L.P., Xxxx Xxxxxx
or Xxxxxx X. Xxxxxxxxx or their respective affiliates or, in the case of a
natural person, any entity of which the controlling owners or beneficiaries
consist of family members of such natural person or such natural person.
"Permitted Indebtedness" means, without duplication, each of the
following:
(i) Indebtedness under the Securities and Permitted Refinancings
thereof;
(ii) Indebtedness incurred pursuant to a senior secured credit
facility, including, without limitation, the Senior Credit Facility, in an
aggregate principal amount at any time outstanding not to exceed $155 million
in the aggregate;
(iii) Permitted Refinancings of (x) other Indebtedness of the Company
or any Restricted Subsidiary to the extent outstanding on the Issue Date
reduced by the amount of any scheduled amortization payments or mandatory
prepayments when actually paid or permanent reductions thereon and (y)
Indebtedness incurred under the Consolidated Fixed Charge Coverage Ratio test
of Section 4.03;
(iv) Interest Swap Obligations of the Company covering Indebtedness of
the Company or any Restricted Subsidiary; provided, however, that such Interest
Swap Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in interest rates on Indebtedness incurred in
accordance with this Indenture to the extent the notional principal amount of
such Interest Swap Obligation does not exceed the principal amount of the
Indebtedness to which such Interest Swap Obligation relates;
(v) Currency Swap Obligations of the Company covering Indebtedness of
the Company or any Restricted Subsidiary; provided, however, that such Currency
Swap Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in currency exchange rates on obligations
incurred in accordance with this In-
-16-
denture to the extent the notional principal amount of such Currency Swap
Obligation does not exceed the amount of the underlying obligation to which
such Currency Swap Obligation relates;
(vi) Commodity Obligations of the Company covering Indebtedness of the
Company or any Restricted Subsidiary; provided, however, that such Commodity
Obligations are entered into to protect the Company and its Restricted
Subsidiaries from fluctuations in the price of commodities actually used in the
ordinary course of business of the Company and its Restricted Subsidiaries;
(vii) Indebtedness of a Restricted Subsidiary to the Company or to a
Restricted Subsidiary for so long as such Indebtedness is held by the Company
or a Restricted Subsidiary, in each case subject to no Lien held by a Person
other than the Company or a Restricted Subsidiary; provided that if as of any
date any Person other than the Company or a Restricted Subsidiary owns or holds
any such Indebtedness or holds a Lien in respect of such Indebtedness, such
date shall be deemed the incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(viii) Indebtedness of the Company to a Restricted Subsidiary for so
long as such Indebtedness is held by a Restricted Subsidiary, in each case
subject to no Lien; provided that (a) any Indebtedness of the Company to any
Restricted Subsidiary is unsecured and subordinated, pursuant to a written
agreement, to the Company's obligations under this Indenture and the Securities
and (b) if as of any date any Person other than a Restricted Subsidiary owns or
holds any such Indebtedness or any Person holds a Lien in respect of such
Indebtedness, such date shall be deemed the incurrence of Indebtedness not
constituting Indebtedness permitted by this clause (viii);
(ix) Indebtedness 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, however, that such Indebtedness is
extinguished within two business days of incurrence;
(x) Indebtedness of the Company or any Restricted Subsidiary
represented by letters of credit for the account of the Company or such
Restricted Subsidiary, as the case may be, in order to provide security for
workers' compensation claims, payment obligations in connection with
self-insurance or similar requirements in the ordinary course of business;
-17-
(xi) Indebtedness represented by Capitalized Lease Obligations of the
Company and its Restricted Subsidiaries with respect to leasehold improvements
and equipment;
(xii) Purchase Money Indebtedness; and
(xiii) additional Indebtedness of the Company in an aggregate
principal amount not to exceed $30 million at any one time outstanding.
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary in any Person that immediately after such Investment is,
or will be, a Restricted Subsidiary of the Company; (ii) Investments in the
Company by any Restricted Subsidiary; provided that any Indebtedness evidencing
such Investment is unsecured and subordinated, pursuant to a written agreement,
to the Company's obligations under the Securities and this Indenture; (iii)
Investments in cash and Cash Equivalents; (iv) loans and advances to employees
and officers of the Company and its Restricted Subsidiaries (other than to
Permitted Holders) in the ordinary course of business for bona fide business
purposes not in excess of $1,000,000 at any one time outstanding; (v) Interest
Swap Obligations, Currency Swap Obligations and Commodity Obligations entered
into in the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with this Indenture; (vi) Investments in
securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers; (vii) Investments made by the Company or its
Restricted Subsidiaries as a result of consideration received in connection
with an Asset Sale made in compliance with Section 4.06; (viii) Partnership
Loans and Partnership Investments in an aggregate amount not to exceed $5
million (without duplication) at any one time outstanding; and (ix) Investments
made by the Company or any Restricted Subsidiary of the Company in a Restricted
Subsidiary of the Company.
"Permitted Junior Securities" means any securities of the Company or
any other Person that are (i) equity securities without special covenants or
(ii) debt securities expressly subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Securities are subordinated as
provided in this Indenture, in any event pursuant to a court order so providing
and as to which (a) the rate of interest on such securities shall not exceed
the effective rate of interest on the Securities on the date hereof, (b) such
securities shall not be entitled to the benefits of covenants or defaults
materially more beneficial to the holders of such securities than those in
effect with respect to the Securities on the date hereof and (c) such
securities shall not provide for amortization (including sinking fund and
mandatory prepayment provisions) commencing prior to the date six months
following the final scheduled maturity date of
-18-
the Senior Indebtedness (as modified by the plan of reorganization of
readjustment pursuant to which such securities are issued).
"Permitted Liens" means (a) Liens imposed by law such as carriers',
warehousemen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business which secure payment of obligations not more than
60 days past due or which are being contested in good faith and by appropriate
proceedings; (b) Liens existing on the Issue Date; (c) Liens securing only the
Securities; (d) Liens in favor of the Company or any Restricted Subsidiary; (e)
Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
promptly instituted and diligently concluded; provided, however, that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (f) easements, reservation of rights of
way, restrictions and other similar easements, licenses, restrictions on the
use of properties, or minor imperfections of title that in the aggregate are
not material in amount and do not in any case materially detract from the
properties subject thereto or interfere with the ordinary conduct of the
business of the Company and the Restricted Subsidiaries; (g) Liens resulting
from the deposit of cash or notes in connection with contracts, tenders or
expropriation proceedings, or to secure workers' compensation, surety or appeal
bonds, costs of litigation when required by law and public and statutory
obligations or obligations under franchise arrangements entered into in the
ordinary course of business; (h) judgment Liens not giving rise to an Event of
Default; and (i) Liens securing letters of credit entered into in the ordinary
course of business.
"Permitted Refinancing" means, with respect to any Indebtedness of any
Person, any Refinancing of such Indebtedness; provided, however, that (i) such
Indebtedness shall not result in an increase in the aggregate principal amount
of Indebtedness of such Person as of the date of such proposed Refinancing
(plus the amount of any premium required to be paid under the terms of the
instrument governing such Indebtedness and plus the amount of reasonable
expenses incurred by the Company in connection with such Refinancing), (ii)
such Indebtedness other than Senior Indebtedness shall not have a Weighted
Average Life to Maturity that is less than the Weighted Average Life to
Maturity of the Indebtedness being Refinanced or a final maturity earlier than
the final maturity of the Indebtedness being Refinanced and (iii) if the
Indebtedness being Refinanced is subordinate or junior to the Securities, then
such Refinancing Indebtedness shall be subordinate to the Securities, as
applicable, at least to the same extent and in the same manner as the
Indebtedness being Refinanced.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof.
-19-
"Physical Securities" means one or more certificated Securities in
registered form.
"Pollo Sale-Leaseback" means a Sale and Leaseback Transaction in
respect of real estate assets acquired in connection with the acquisition of
Pollo Tropical, Inc. by the Company and effected within 360 days of the Issue
Date.
"Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument
creating, evidencing or governing such Indebtedness, whether or not, pursuant
to applicable law or otherwise, the claim for such interest is allowed as a
claim in such Insolvency or Liquidation Proceeding.
"Preferred 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 redemptions or upon liquidation.
"principal" of a debt security means the principal of the security,
plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" has the meaning provided in Section 1 of
the Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Initial Securities in the form set forth on Exhibit A hereto.
"Public Equity Offering" means an underwritten public offering of
Qualified Capital Stock of Holdings or the Company pursuant to a registration
statement filed with the Commission in accordance with the Securities Act;
provided, however, that in the event of a Public Equity Offering by Holdings,
Holdings contributes to the capital of the Company the portion of the net cash
proceeds of such Public Equity Offering necessary to pay the aggregate
redemption price (plus accrued interest to the date of redemption) of the
Securities to be redeemed pursuant to paragraph 6 of the Securities.
"Purchase Agreement" means the Purchase Agreement dated as of November
18, 1998, by and among the Company, the Guarantors and the Initial Purchasers.
"Purchase Money Indebtedness" means Indebtedness of the Company and
its Restricted Subsidiaries incurred in the normal course of business for the
purpose of financing
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part of the purchase price, or the cost of installation, construction or
improvement, of property or equipment (including quick-service restaurant
properties and related franchises and other intangibles); provided, however,
(A) the Indebtedness shall not exceed 75% of the cost of such property or
assets and shall not be secured by any property or assets of the Company or any
Restricted Subsidiary other than the property and assets so acquired or
constructed, (B) the Indebtedness constituting such Indebtedness (other than
the refinancing of such Indebtedness) shall have initially been incurred within
270 days of the entering into or incurrence of such underlying obligation and
(C) the Lien securing such Indebtedness shall be created within 270 days of
such acquisition or construction or, in the case of a refinancing of any
Purchase Money Indebtedness, within 270 days of such refinancing.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"redeem" means redeem, repurchase, defease or otherwise acquire or
retire for value; and "redemption" and "redeemed" have correlative meanings.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Reference Date" has the meaning set forth in Section 4.05.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Registrar" has the meaning set forth in Section 2.03.
"Registration" means a registered exchange offer for the Securities by
the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
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"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated as of November 24, 1998, by and among the Company, the
Guarantors and the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Permanent Global Security" means a permanent global
Security in registered form representing the outstanding principal amount of
the Regulation S Temporary Global Security upon expiration of the Restricted
Period.
"Regulation S Temporary Security" means a temporary global Security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S.
"Replacement Assets" means, with respect to an Asset Sale, properties
and assets that replace the properties and assets that were the subject of such
Asset Sale or properties and assets that will be used in a Permitted Business
(or the Capital Stock of an entity all of whose assets constitute Replacement
Assets).
"Restricted Period" means the "distribution compliance period"
applicable to the Company described in Regulation S.
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided, however, 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 any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary.
"Revocation" has the meaning set forth in Section 4.12(c).
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such Person or to any other Person from whom
funds have been or are to be advanced by such Person on the security of such
property.
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"S&P" has the meaning set forth in the definition of "Cash
Equivalents" above.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities" means, collectively, the Initial Securities, the Private
Exchange Securities and the Unrestricted Securities treated as a single class
of securities, as amended or supplemented from time to time in accordance with
the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Senior Credit Facility" means the Loan Agreement dated as of May 12,
1997, as amended among Carrols Corporation, Chase Bank of Texas, National
Association, as agent and the lenders party thereto in their capacities as
lenders thereunder, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted by Section
4.03) or adding Restricted Subsidiaries of the Company as additional borrowers
or guarantors thereunder) all or any portion of Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender, or group of lenders.
"Senior Indebtedness" means, at any date, (a) all obligations of the
Company under the Senior Credit Facility; (b) all Interest Swap Obligations,
Currency Swap Obligations and Commodity Obligations of the Company; (c) all
obligations of the Company under standby letters of credit; and (d) all other
Indebtedness of the Company, including principal, premium, if any, and interest
(including Post-Petition Interest) on such Indebtedness, unless the instrument
under which such Indebtedness of the Company is incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right of
payment to the Securities, and all renewals, extensions, modifications,
amendments or refinancings thereof. Notwithstanding the foregoing, Senior
Indebtedness shall not include: (a) to the extent that it may constitute
Indebtedness, any obligation for federal, state, local or other taxes; (b) any
Indebtedness among or between the Company and any Subsidiary of the Company or
any Affiliate of the Company or any of such Affiliate's Subsidiaries; (c) to
the extent that it may constitute Indebtedness, any obligation in respect of
any trade payable incurred for the purchase of goods or materials, or for
services obtained, in the ordinary course of business; (d) that portion of any
Indebtedness that is incurred in violation of this Indenture; (e) Indebtedness
evidenced by the Securities; (f) Indebtedness of the Company that is expressly
subordinate or
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junior in right of payment to any other Indebtedness of the Company; (g) to the
extent that it may constitute Indebtedness, any obligation owing under leases
(other than Capitalized Lease Obligations) or management agreements; and (h)
any obligation that by operation of law is subordinate to any general unsecured
obligations of the Company. No Indebtedness shall be deemed to be subordinated
to other Indebtedness solely because such other Indebtedness is secured.
"Significant Subsidiary," with respect to any Person, means any
Restricted Subsidiary of such Person that satisfies the criteria for a
"significant subsidiary" set forth in Rule 1.02(w) of Regulation S-X under the
Securities Act.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest 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.
"Surviving Entity" has the meaning set forth in Section 5.01(a).
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except
as provided in Section 10.03) until such time as this Indenture is qualified
under the TIA, and thereafter as in effect on the date on which this Indenture
is qualified under the TIA.
"Transaction Date" has the meaning set forth in the definition of
"Consolidated Fixed Charge Coverage Ratio" above.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.
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"United States Government Obligations" means direct non-callable
obligations of the United States for the payment of which the full faith and
credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do not and
are not required to bear the Private Placement Legend in the form set forth in
Exhibit A hereto, including, without limitation, the Exchange Securities and
any Securities registered under the Securities Act pursuant to and in
accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary.
"Voting Stock" of a corporation means all classes of Capital Stock of
such corporation then outstanding and normally entitled to vote in the election
of directors.
"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 sum of
the total of the products 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.
"Wholly Owned Restricted Subsidiary" of any Person means any
Restricted Subsidiary of such Person of which all the outstanding voting
securities (other than in the case of a foreign Restricted Subsidiary,
directors' qualifying shares or an immaterial amount of shares required to be
owned by other Persons pursuant to applicable law) are owned by such Person or
any Wholly Owned Restricted Subsidiary of such Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities and the Guaranties.
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"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, a Guarantor
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in
this Indenture to "generally accepted accounting principles" refers to
GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
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 other subdivision.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication thereof shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated in
and expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements (including the Security Guarantee) required by law,
stock exchange rule or usage. The Company and the Trustee shall approve the
form of the Securities and any notation, legend or endorsement (including the
Security Guarantee) on them. Each Security shall be dated the date of its
issuance and shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more Global Securities and Securities offered
and sold in reliance on Regulation S shall be issued initially in the form of
one or more Regulation S Temporary Global Securities, substantially in the form
set forth in Exhibit A hereto, deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C hereto.
The aggregate principal amount of the Global Securities may from time to time
be increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided. Securities issued in
exchange for interests in a Global Security pursuant to Section 2.16 may be
issued in the form of Physical Securities in substantially the form set forth
in Exhibit A hereto.
The Restricted Period for the Regulation S Temporary Global Security
shall be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depository, together with copies of certificates from
Euroclear and Cedel Bank certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal
amount of the Regulation S Temporary Global Security (except to the extent of
any beneficial owners thereof who acquired an interest therein during the
Restricted Period pursuant to another exemption from registration under the
Securities Act and who will take delivery of a beneficial ownership interest in
a 144A Global Security or an IAI Global Security) and (ii) receipt of an
Opinion of Counsel. Following the termination of the Restricted Period,
beneficial interests in the Regulation S Temporary Global Security shall be
exchanged for beneficial interests in Regulation S Permanent Global Securities.
Simultaneously with the
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authentication of Regulation S Permanent Global Security, the Trustee shall
cancel the Regulation S Temporary Global Security. The aggregate principal
amount of the Regulation S Temporary Global Security and the Regulation S
Permanent Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and Conditions Governing Use of Euroclear" and the "General Terms
and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Security and the Regulation S Permanent Global Security that are held by
participants through Euroclear or Cedel Bank.
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to such Officer's signature, the Securities for the
Company by manual or facsimile signature.
If an Officer or an Assistant Secretary whose signature is on a
Security was an Officer or an Assistant Secretary, as the case may be, at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $170,000,000, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to
time only in exchange for (A) a like principal amount of Initial Securities or
(B) a like principal amount of Private Exchange Securities, in each case upon a
written order of the Company in the form of an Officers' Certificate. Each such
written order shall specify the amount of Securities to be authenticated and
the date on which the Securities are to be authenticated, whether the
Securities are to be Initial Securities, Private Exchange Securities or
Unrestricted Securities and whether the Securities are to be issued as Physical
Securities or Global Securities and such other information as the Trustee may
reasonably re-
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quest. The aggregate principal amount of Securities outstanding at
any time may not exceed $170,000,000, except as provided in Sections 2.07 and
2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
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. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency in the Borough of
Manhattan, The City of New York, where (a) Securities may be presented or
surrendered for registration of transfer or for exchange (the "Registrar"), (b)
Securities may be presented or surrendered for payment (the "Paying Agent") and
(c) notices and demands 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, upon notice to the Trustee, may appoint one
or more co-Registrars and one or more additional Paying Agents. The term
"Paying Agent" includes any additional Paying Agent. Except as provided herein,
the Company or any Guarantor may act as Paying Agent, Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee in writing of the
name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such and shall be entitled to appropriate compensation in
accordance with Section 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
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SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee in
writing of any Default by the Company in making any such payment. The Company
at any time may require a Paying Agent to distribute all assets held by it to
the Trustee and account for any assets disbursed 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 distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent (if other than the Company), the Paying Agent shall have no
further liability for such assets. If the Company, any Guarantor or any of
their respective Affiliates acts as Paying Agent, it shall, on or before each
due date of the principal of or interest on the Securities, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum sufficient to
pay the principal or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee in writing of its action or failure so to act.
SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee before each Interest Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a written request to
register the transfer of such Securities or to exchange such Securities for an
equal principal amount of Securities of other authorized denominations of the
same series, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
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written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.06,
4.10 or 10.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and neither the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary. Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest in a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depository (or its agent), and that
ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements for replacement of Securities are met.
If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee and any Agent from
any loss which any of them may suffer if a Security is replaced The Company may
charge such Holder for its reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security
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does not cease to be outstanding because the Company or any of its Affiliates
holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be outstanding
upon surrender of such Security and replacement thereof pursuant to Section
2.07.
If on a Redemption Date, Net Proceeds Offer Payment Date, Change of
Control Payment Date or the Final Maturity Date the Paying Agent holds money
sufficient to pay all of the principal and interest due on the Securities
payable on that date, and is not prohibited from paying such money to the
Holders 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.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities as to which the Trustee has received an Officer's Certificate that
such Securities are so owned shall be disregarded.
The Company shall notify the Trustee, in writing, when it, any
Guarantor or any of its Affiliates repurchases or otherwise acquires
Securities, of the aggregate principal amount of such Securities so repurchased
or otherwise acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities that have been identified to the Trustee in writing by the
Company. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate upon receipt of a written order
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of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. 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, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that it has
delivered to the Trustee for cancellation. If the Company or any Guarantor
shall acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(i) shall be paid to
Holders as of the Interest Record Date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as
a convenience to
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Holders; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
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
shall promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Redemption Date, Net Proceeds Offer Payment Date, Change of Control Payment
Date and the Final Maturity Date, the Company shall deposit with the Paying
Agent in immediately available funds money sufficient to make cash payments, if
any, due on such Interest Payment Date, Redemption Date, Net Proceeds Offer
Payment Date, Change of Control Payment Date or Final Maturity Date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such Interest Payment Date, Redemption Date, Net Proceeds
Offer Payment Date, Change of Control Payment Date or Final Maturity Date, as
the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise
of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Company notifies the Trustee in writing that DTC is no longer willing or able
to act as a depositary or DTC ceases
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to be registered as a clearing agency under the Exchange Act and a successor
depositary is not appointed within 90 days of such notice or cessation, (ii)
the Company, at its option, notifies the Trustee in writing that it elects to
cause the issuance of the securities as Physical Securities, or (iii) an Event
of Default has occurred and is continuing and the Registrar has received a
request from the Depository to issue Physical Securities; provided that in no
event shall the Regulation S Temporary Global Security be exchanged by the
Company for Physical Securities prior to (x) the expiration of the Restricted
Period and (y) the receipt by the Registrar of any certificates required
pursuant to Rule 903 under the Securities Act as stated in an Opinion of
Counsel.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security delivered
in exchange for an interest in a Global Security pursuant to paragraph (c) of
this Section 2.15 shall, except as otherwise provided by Section 2.16, bear the
Private Placement Legend.
(e) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a written
request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the
Physical Securities presented or surrendered for registration of transfer or
exchange:
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(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical Securities
shall be accompanied, in the discretion of the Company or the Trustee, by the
following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect (substantially in the form of Exhibit D
hereto); or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and a transferee letter of representation
(substantially in the form of Exhibit E hereto) and, at the
option of the Company or the Trustee, an Opinion of Counsel
reasonably satisfactory to the Company or the Trustee, as the
case may be, to the effect that such transfer is in
compliance with the Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a
transferor certificate for Regulation S transfer
substantially in the form of Exhibit F hereto and, at the
option of the Company or the Trustee, an Opinion of Counsel
reasonably satisfactory to the Company or the Trustee, as the
case may be, to the effect that such transfer is in
compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company or the
Trustee, an Opinion of Counsel reasonably satisfactory to the
Company or the Trustee, as the case may be, to the effect
that such transfer is in compliance with the Securities Act;
or
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(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company or the Trustee, an Opinion of Counsel reasonably
acceptable to the Company or the Trustee, as the case may be,
to the effect that such transfer is in compliance with the
Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D hereto,
that such Physical Security is being transferred (I) to a
QIB, (II) to an Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with respect to
(II) and (III), at the option of the Company or the Trustee,
an Opinion of Counsel reasonably acceptable to the Company or
the Trustee, as the case may be, to the effect that such
transfer is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or co-Registrar
to make, or to direct the Depository to make, an endorsement
on the applicable Global Security to reflect an increase in
the aggregate amount of the Securities represented by the
Global Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar
or co-Registrar, the principal amount of Securities represented by the
applicable Global Security to be increased accordingly. If no 144A Global
Security, IAI Global Security or Regulation S Global Security, as the case may
be, is then outstanding, the Company shall, unless either of the events in the
proviso to Section 2.15(b) have occurred and are continuing, issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred. Private Exchange Securities, as such, may not be exchanged for a
beneficial interest in a Global Security.
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(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor; provided, however, that prior to the expiration of the Restricted
Period, transfers of beneficial interests in the Temporary Regulation S Global
Security may not be made to a U.S. Person or for the account or benefit of a
U.S. Person (other than an Initial Purchaser). Upon receipt by the Registrar or
Co-Registrar of written instructions, or such other instruction as is customary
for the Depository, from the Depository or its nominee, requesting the
registration of transfer of an interest in a 144A Global Security, an IAI
Global Security or a Regulation S Global Security, as the case may be, to
another type of Global Security, together with the applicable Global Securities
(or, if the applicable type of Global Security required to represent the
interest as requested to be obtained is not then outstanding, only the Global
Security representing the interest being transferred), the Registrar or
Co-Registrar shall reflect on its books and records (and the applicable Global
Security) the applicable increase and decrease of the principal amount of
Securities represented by such types of Global Securities, giving effect to
such transfer. If the applicable type of Global Security required to represent
the interest as requested to be obtained is not outstanding at the time of such
request, the Company shall issue and the Trustee shall, upon written
instructions from the Company in accordance with Section 2.02, authenticate a
new Global Security of such type in principal amount equal to the principal
amount of the interest requested to be transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon written request exchange such beneficial interest for a Physical
Security; provided, however, that prior to the Registration, a
transferee that is a QIB or Institutional Accredited Investor may not
exchange a beneficial interest in Global Security for a Physical
Security; provided that in no event shall Physical Securities be issued
upon the transfer or exchange of beneficial interests in the Regulation
S Temporary Global Security prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any
certificates required pursuant to Rule 903 under the Securities Act as
stated in an Opinion of Counsel. Upon receipt by the Registrar or
co-Registrar of written instructions, or such other form of instructions
as is customary for the Depository, from the Depository or its nominee
on behalf of any Person having a beneficial interest in a Global
Security and upon receipt by the Trustee of a written order or such
other form of instructions as is customary for the Depository or the
Person designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of
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a beneficial interest in Securities the offer and sale of
which have not been registered under the Securities Act, the following
additional information and documents:
(A) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company or the
Trustee, an Opinion of Counsel reasonably satisfactory to the
Company or the Trustee, as the case may be, to the effect
that such transfer is in compliance with the Securities Act;
or
(B) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of
the Securities Act, a certification to that effect
(substantially in the form of Exhibit D hereto) and, at the
option of the Company or the Trustee, an Opinion of Counsel
reasonably satisfactory to the Company or the Trustee, as the
case may be, to the effect that such transfer is in
compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal amount of
the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and
deliver to the transferee a Physical Security in the appropriate
principal amount.
(ii) Securities issued in exchange for a beneficial interest
in a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar or
co-Registrar in writing. The Registrar or co-Registrar shall deliver
such Physical Securities to the Persons in whose names such Physical
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
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(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act; (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that the Company or any affiliate (as
defined in Rule 144 under the Securities Act) of the Company was the owner of
such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to this Section 2.16 or Section 2.15.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 or 6
of the Securities at the applicable redemption price set forth thereon, it
shall notify the Trustee in writing of the Redemption Date and the principal
amount of Securities to be redeemed. The Company shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be agreed to by the Trustee in writing), together with an Officers'
Certificate stating that such redemption will comply with the conditions
contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis or in
such other manner as the Trustee shall deem fair and appropriate. Selection of
the Securities to be redeemed pursuant to paragraph 6 of the Securities shall
be made by the Trustee only on a pro rata basis or on as nearly a pro rata
basis as is practicable (subject to the procedures of the Depository) based on
the aggregate principal amount of Securities held by each Holder. The Trustee
shall make the selection from the Securities then outstanding, subject to
redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5 or 6 of
the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. 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 not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose
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Securities are to be redeemed no later than 90 days after the date of
the Closing of the relevant Public Equity Offering of Holdings or the
Company.
Each notice of redemption shall identify the Securities to be redeemed
(including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) 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 and the only
remaining right of the Holders is to receive payment of the redemption
price upon surrender to the Paying Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or
6 of the Securities, 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, upon surrender of such Security, a
new Security or Securities in principal amount equal to the unredeemed
portion thereof will be issued.
At the Company's written request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such
Redemption Date shall be payable to the Holders of record at the close of
business on the relevant Interest Record Date. Subject to the provisions of
Section 3.05, on and after the Redemption Date, interest ceases to accrue on
the Securities or portions of them called for redemption.
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SECTION 3.05. Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company is its own Paying Agent, shall, on or before
the Redemption Date, segregate and hold in trust) money sufficient to pay the
redemption price of, including premium, if any, and accrued interest, if any,
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.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure
of the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal, including premium, if any, and accrued
and unpaid interest, if any, thereon shall, until paid or duly provided for,
bear interest as provided in Sections 2.12 and 4.01 with respect to any payment
default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities and the Registration Rights Agreement.
An installment of principal or interest shall be considered paid on the date
due if the Trustee or Paying Agent (other than the Company, a Guarantor or any
of their respective Affiliates) holds on that date money designated for and
sufficient to pay the installment in full and is not prohibited from paying
such money to the Holders pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
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SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, the office or agency required under Section 2.03. 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 set forth in
Section 13.02. The Company hereby initially designates the Trustee at its
address set forth in Section 13.02 as its office or agency in The Borough of
Manhattan, The City of New York, for such purposes.
SECTION 4.03. Limitation on Incurrence of Additional Indebtedness and Issuance
of Disqualified Capital Stock.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, incur (as defined) any Indebtedness
(other than Permitted Indebtedness) and the Company shall not issue any
Disqualified Capital Stock and shall not permit its Restricted Subsidiaries to
issue any Preferred Stock except Preferred Stock of a Restricted Subsidiary
issued to (and as long as it is held by) the Company or a Wholly Owned
Restricted Subsidiary of the Company; provided, however, that if no Default or
Event of Default shall have occurred and be continuing at the time of or as a
consequence of the incurrence of any such Indebtedness, the Company or any
Restricted Subsidiary may incur Indebtedness (including, without limitation,
Acquired Indebtedness), the Company may issue Disqualified Capital Stock and
any Restricted Subsidiary may issue Preferred Stock, if, in any case, at the
time of and immediately after giving pro forma effect to such incurrence of
such Indebtedness or the issuance of such Disqualified Capital Stock or
Preferred Stock, as the case may be, and the use of proceeds therefrom, the
Company's Consolidated Fixed Charge Coverage Ratio is greater than 2.0 to 1.0.
SECTION 4.04. Limitation on Senior Subordinated Indebtedness.
The Company shall not, and shall not cause or permit any Guarantor to,
directly or indirectly, incur, or suffer to exist, any Indebtedness that by its
terms would expressly rank senior in right of payment to the Securities or the
Guarantees of such Guarantor, as the case may be, and subordinate in right of
payment to any other Indebtedness of the Company or such Guarantor, as the case
may be.
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SECTION 4.05. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, (a) declare or pay any dividend or make
any distribution (other than dividends or distributions payable in Qualified
Capital Stock of the Company) on or in respect of shares of the Company's
Capital Stock, (b) redeem any Capital Stock of the Company or any warrants,
rights or options to purchase or acquire shares of any class of such Capital
Stock, or (c) make any Investment (other than Permitted Investments) (each of
the foregoing actions set forth in clauses (a), (b) and (c) being referred to
as a "Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto, (i) a Default shall have occurred and
be continuing, (ii) the Company is not able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.03 or (iii) the aggregate amount of Restricted Payments (including
such proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair market value
of such property as determined reasonably and in good faith by the Board of
Directors of the Company) shall exceed the sum (the "Basket"), without
duplication, of: (w) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of
the Company earned subsequent to the Issue Date and on or prior to the date the
Restricted Payment occurs (the "Reference Date") (treating such period as a
single accounting period); provided that for purposes of this clause (w), the
definition of "Net Income" shall include (i) after-tax gains from Asset Sales
or abandonments or reserves relating thereto and (ii) an add-back of
amortization associated with the excess of purchase price over the value
allocated to tangible property or assets, acquired by the Company or its
Restricted Subsidiaries; plus (x) 100% of the aggregate net cash proceeds
received by the Company from any Person (other than a Subsidiary of the
Company) from the issuance and sale subsequent to the Issue Date and on or
prior to the Reference Date of Qualified Capital Stock of the Company or any
equity contribution received by the Company from a holder of the Company's
Capital Stock (other than Qualified Capital Stock or any equity contribution,
the proceeds of which are to be used to redeem Securities pursuant to paragraph
6 of the Securities); plus (y) the principal amount (or accreted amount
(determined in accordance with GAAP), if less) of any Indebtedness of the
Company or any Subsidiary of the Company incurred after the Issue Date which
has been converted into or exchanged for Qualified Capital Stock of the Company
(minus the amount of any cash or property distributed by the Company or any
Subsidiary of the Company upon such conversion or exchange); plus (z) the
amount equal to the net reduction in Investments (other than Permitted
Investments) made by the Company or any of its Restricted Subsidiaries in any
Person resulting from, and without duplication, (i) repurchases or redemptions
of such Investments by such Person, proceeds realized upon the sale of such
Investment to an unaffiliated purchaser and repayments of loans or advances or
other transfers of assets by such Person
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to the Company or any Restricted Subsidiary of the Company or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investment") not to exceed the
amount of the Investment previously made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary, which amount was included in the
calculation of Restricted Payments; provided, however, that no amount shall be
included under this clause (z) to the extent it is already included in
Consolidated Net Income.
Notwithstanding the foregoing, the provisions set forth in the
immediately preceding paragraph shall not prohibit: (1) the payment of any
dividend within 60 days after the date of declaration of such dividend if the
dividend would have been permitted on the date of declaration; (2) so long as
no Default shall have occurred and be continuing or would arise therefrom, any
purchase, redemption, defeasance or other acquisition of Capital Stock or
subordinated Indebtedness of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Qualified Capital Stock of
the Company; provided, however, that the value of any such Qualified Capital
Stock issued in exchange for Capital Stock and subordinated Indebtedness are
excluded from clause (iii)(x) of the immediately preceding paragraph; (3) so
long as no Default shall have occurred and be continuing or would arise
therefrom, any purchase, redemption, defeasance or other acquisition of
subordinated Indebtedness of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, subordinated Indebtedness of
the Company; (4) so long as no Default shall have occurred and be continuing or
would arise therefrom, dividends or distributions by the Company to Holdings to
be promptly applied by Holdings to repurchase Capital Stock of Holdings
(including rights, options or warrants to acquire such Capital Stock) from
employees of Holdings or any of its Subsidiaries or their authorized
representatives upon the death, disability or termination of employment of such
employees, in an aggregate amount not to exceed $1 million in any fiscal year;
provided, however, that amounts not expended in any calendar year may be
expended in succeeding fiscal years as long as no more than $3 million is so
expended in any fiscal year; (5) so long as no Default shall have occurred and
be continuing or would arise therefrom, Restricted Payments not to exceed $10
million in the aggregate during the term of this Indenture; and (6) any
dividends or payments to Holdings in respect of overhead expenses, including
legal, accounting and other professional fees, that are directly attributable
to the operations of the Company and its Restricted Subsidiaries. In
determining the aggregate amount of Restricted Payments made subsequent to the
Issue Date in accordance with clause (iii) of the immediately preceding
paragraph, amounts expended pursuant to clauses (1), (4) and (5) shall be
included in such calculation. Transactions pursuant to clauses (2) and (3)
shall not increase the Basket.
The amount of any non-cash Restricted Payment shall be the fair market
value, on the date such Restricted Payment is made, of the assets or securities
proposed to be trans-
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ferred or issued by the Company or such Restricted Subsidiary, as the case may
be, pursuant to such Restricted Payment. The fair market value of any non-cash
Restricted Payment shall be determined by the Board of Directors of the
Company.
SECTION 4.06. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale at least equal to the fair market value of the
assets sold or otherwise disposed of (as determined in good faith by the
Company's Board of Directors), (ii) at least 90% of the consideration received
by the Company or the Restricted Subsidiary, as the case may be, from such
Asset Sale shall be in the form of cash or Cash Equivalents and is received at
the time of such disposition; and (iii) upon the consummation of an Asset Sale,
the Company shall apply, or cause such Restricted Subsidiary to apply, the Net
Cash Proceeds relating to such Asset Sale within 270 days of receipt thereof
either (A) to prepay any Indebtedness incurred pursuant to clause (ii) of the
definition of "Permitted Indebtedness" and effect a permanent reduction
thereunder, (B) to prepay any Senior Indebtedness and effect a permanent
reduction thereunder, (C) to make an investment in Replacement Assets or (D) a
combination of prepayment and investment permitted by the foregoing clauses
(iii)(A), (iii)(B) and (iii)(C). On the 271st day after an Asset Sale or such
earlier date, if any, as the Board of Directors of the Company or of such
Restricted Subsidiary determines, as the case may be, not to apply the Net Cash
Proceeds relating to such Asset Sale as set forth in clauses (iii)(A),
(iii)(B), (iii)(C) and (iii)(D) of the next preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B), (iii)(C) and (iii)(D) of the next
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase (the "Net
Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more than 60 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders on a pro rata basis, that amount of Securities
equal to the Net Proceeds Offer Amount at a price equal to 100% of the
principal amount of the Securities to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of repurchase; provided, however, that
the Company may defer the Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $5 million
resulting from one or more Asset Sales (at which time, the entire unutilized
Net Proceeds Offer Amount, and not just the amount in excess of $5 million,
shall be applied as required pursuant to this paragraph). If at any time any
non-cash consideration received by the Company or any Restricted Subsidiary, as
the case may be, in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash (other than interest received with respect to
any such non-cash consideration), then such conversion or disposition shall be
-47-
deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this covenant.
(b) In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.01, the
successor corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted Subsidiaries not so transferred for purposes of
this covenant, and shall comply with the provisions of this covenant with
respect to such deemed sale as if it were an Asset Sale. In addition, the fair
market value of such properties and assets of the Company or its Restricted
Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for
purposes of this covenant.
(c) Notwithstanding paragraphs (a) and (b) above, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraphs to the extent (i) at least 90% of the
consideration for such Asset Sale constitutes cash or Replacement Assets and
(ii) such Asset Sale is for fair market value; provided that any consideration
not constituting Replacement Assets received by the Company or any of its
Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds subject to
the provisions of the two preceding paragraphs.
(d) Within 30 days following the Net Proceeds Offer Trigger Date, the
Company shall send, by first class mail, postage prepaid, a notice to each
Holder of Securities, with a copy to the Trustee, which notice shall govern the
terms of the Net Proceeds Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Net Proceeds Offer. Such notice shall state:
(1) that the Net Proceeds Offer is being made pursuant to
this Section 4.06 and that all Securities validly tendered, in whole
or in part, and not withdrawn will be accepted for payment; provided,
however, that to the extent that Holders validly tender Securities in
an amount exceeding the Net Proceeds Offer Amount, Securities of
tendering Holders will be repurchased on a pro rata basis;
(2) the repurchase price (including the amount of accrued
interest, if any) and the repurchase date (which shall be no earlier
than 30 days nor later than 60 days following the applicable Net
Proceeds Offer Trigger Date, other than as may be required by law) and
that the Net Proceeds Offer will remain open for a period of 20
business days or such longer period as may be required by law;
(3) that any Security not tendered will continue to accrue
interest;
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(4) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Net Proceeds
Offer Payment Date;
(5) that Holders electing to have a Security purchased
pursuant to a Net Proceeds Offer will be required to surrender the
Security, with the form entitled "Option of Holder to Elect
Repurchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Net Proceeds Offer
Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than five Business Days prior
to the Net Proceeds Offer 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;
(7) 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; provided, however,
that each Security repurchased and each new Security issued shall be
in a principal amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding the
applicable Asset Sale.
(e) On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment Securities or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Net Proceeds
Offer, (ii) deposit with the Paying Agent in accordance with Section
2.14 United States Government Obligations sufficient to pay the
repurchase price plus accrued and unpaid interest, if any, of all
Securities so tendered and (iii) deliver to the Trustee Securities so
accepted together with an Officers' Certificate stating the Securities
or portions thereof being repurchased by the Company. Upon receipt by
the Paying Agent of the monies specified in clause (ii) above and a copy
of the Officers' Certificate specified in clause (iii) above, the Paying
Agent shall promptly mail to the Holders so accepted payment in an
amount equal to the repurchase price plus accrued and unpaid interest,
if any, out of the funds deposited with the Paying Agent in accordance
with the preceding sentence. The Trustee shall promptly authenticate and
mail to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Upon the payment of
the repurchase price for the Securities accepted for repurchase, the
Trustee shall return the Securities repurchased to the Company for
cancellation. Any monies remaining after the repur-
-49-
chase of Securities pursuant to a Net Proceeds Offer shall be returned
within three Business Days by the Trustee to the Company except with
respect to monies owed as obligations to the Trustee pursuant to Article
Seven. For purposes of this Section 4.06, the Trustee shall, except with
respect to monies owed as obligations to the Trustee pursuant to Article
Seven, act as the Paying Agent.
(f) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.06, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.06 by virtue thereof.
SECTION 4.07. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause
or permit to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock, (b) make loans or advances
or to pay any Indebtedness or other obligation owed to the Company or any other
Restricted Subsidiary or (c) transfer any of its property or assets to the
Company or any other Restricted Subsidiary, except for such encumbrances or
restrictions existing under or by reason of: (1) applicable law; (2) this
Indenture; (3) customary non-assignment provisions of any contract or any lease
entered into in the ordinary course of business and consistent with past
practices governing a leasehold interest of any Restricted Subsidiary; (4) any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person or the properties or assets of the Person so acquired; (5)
agreements existing on the Issue Date, including, without limitation, the
Senior Credit Facility, to the extent and in the manner such agreements are in
effect on the Issue Date; (6) customary Liens granted by the Company or any
Restricted Subsidiary to secure Senior Indebtedness or Senior Indebtedness of a
Restricted Subsidiary; (7) an agreement governing Indebtedness incurred to
Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement
referred to in clause (2), (4) or (5) above; provided, however, that the
provisions relating to such encumbrance or restriction contained in any such
Indebtedness are no less favorable to the Company in any material respect as
determined by the Board of Directors of the Company in their reasonable and
good faith judgment than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clause (2), (4) or (5);
(8) Purchase Money Indebtedness for property or assets acquired in the
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ordinary course of business that only imposes encumbrances or
restrictions on the property so acquired; (9) Permitted Liens; and (10)
any agreement for the sale or disposition of the Capital Stock or assets
of a Restricted Subsidiary; provided, however, that such encumbrances
and restrictions are only applicable to such assets or Restricted
Subsidiary, as applicable, and any such sale or disposition is made in
compliance with Section 4.06 to the extent applicable thereto.
SECTION 4.08. Limitation on Liens.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, incur or suffer to exist any Lien (other than Permitted Liens)
on property or assets of the Company or such Restricted Subsidiary to secure
Indebtedness that is pari passu or subordinate in right of payment to the
Securities, in the case of the Company, or the Guarantors, in the case of a
Restricted Subsidiary that is a Guarantor, without making, or causing such
Restricted Subsidiary to make, effective provision for securing the Securities
or the Guarantees, as the case may be (and, if the Company so determines, any
other Indebtedness of the Company or of such Restricted Subsidiary that is not
pari passu with or subordinated in right of payment to the Securities or the
Guarantees, as the case may be); provided, however, that (i) in the case of a
Lien securing Indebtedness that is pari passu with the Securities, in the case
of the Company, or the Guarantees, in the case of a Restricted Subsidiary that
is a Guarantor, the Lien securing the Securities or the Guarantees, as the case
may be, is senior or pari passu in priority with such Lien and (ii) in the case
of a Lien securing Indebtedness that is subordinated in right of payment to the
Securities, in the case of the Company, or the Guarantees, in the case of a
Restricted Subsidiary that is a Guarantor, the Lien securing the Securities or
the Guarantees, as the case may be, is senior in priority to such Lien.
(b) Notwithstanding the foregoing, any security interest granted by
the Company or any Restricted Subsidiary to secure the Securities, in the case
of the Company, or the Guarantees, in the case of a Restricted Subsidiary that
is a Guarantor, created pursuant to paragraph (a) above shall provide by its
terms that such security interest shall be automatically and unconditionally
released and discharged upon the release by the holders of the Indebtedness of
the Company or any Restricted Subsidiary described in paragraph (a) above of
their security interest (including any deemed release upon indefeasible payment
in full of all obligations under such Indebtedness), at a time when (A) no
other Indebtedness that is pari passu or subordinated in right of payment to
the Securities, or the Guarantees, as the case may be, has been secured by such
property or assets of the Company or any such Restricted Subsidiary or (B) the
holders of all such other Indebtedness which is secured by such property or
assets of the Company or any such Restricted Subsidiary release their security
interest in such property or assets (including any deemed release upon
indefeasible payment in full of all obligations under such Indebtedness).
-51-
SECTION 4.09. Limitations on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit or suffer to
exist any transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates
(each an "Affiliate Transaction"), other than (i) Affiliate Transactions
permitted under paragraph (b) below and (ii) Affiliate Transactions on terms
that are no less favorable than those that might reasonably have been obtained
in a comparable transaction at such time on an arm's-length basis from a Person
that is not an Affiliate of the Company or such Restricted Subsidiary. In
addition, if the Company or any Restricted Subsidiary enters into an Affiliate
Transaction (or a series of related Affiliate Transactions) involving aggregate
payments or other property with a fair market value in excess of $5 million,
the Company or such Restricted Subsidiary, as the case may be, shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company or the relevant
Restricted Subsidiary, as the case may be, from a financial point of view, from
an Independent Financial Advisor and file the same with the Trustee.
(b) The restrictions set forth in clause (a) shall not apply to (i)
reasonable fees and compensation paid to and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any Restricted
Subsidiary as determined in good faith by the Company's Board of Directors;
(ii) transactions exclusively between or among the Company and any of its
Restricted Subsidiaries or exclusively between or among such Restricted
Subsidiaries, provided such transactions are not otherwise prohibited by this
Indenture; (iii) any agreement as in effect as of the Issue Date and any
payment with respect thereto as required thereunder as of the Issue Date; and
(iv) Restricted Payments permitted by this Indenture.
SECTION 4.10. Change of Control.
(a) Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
Trustee in writing of such Change of Control and shall notify the Holders of
such occurrence in the manner prescribed by this Indenture and shall, within 60
days after the Change of Control Date, make an offer to repurchase (the "Change
of Control Offer") all Securities then outstanding at a repurchase price in
cash equal to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following the date on which the Company becomes aware that
a Change of Control
-52-
has occurred, the Company covenants that if the repurchase of the Securities
would violate or constitute a default under any other Indebtedness of the
Company, then the Company shall, to the extent needed to permit such repurchase
of Securities, either (i) repay all such Indebtedness and terminate all
commitments outstanding thereunder or (ii) obtain the requisite consents, if
any, under any such Indebtedness required 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 make the Change of
Control Offer or repurchase the Securities pursuant to the provisions described
below.
(c) Within 30 days following the Change of Control Date, the Company
shall send, by first class mail, postage prepaid, a notice to each Holder of
Securities, with 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:
(1) that the Change of Control Offer is being made pursuant
to this Section 4.10 and that all Securities validly tendered and not
withdrawn will be accepted for payment;
(2) the repurchase price (including the amount of accrued
interest, if any) and the repurchase 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");
(3) that any Security not tendered will continue to accrue
interest;
(4) 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;
(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to surrender
the Security, with the form entitled "Option of Holder to Elect
Repurchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control
Payment Date;
(6) that Holders will be entitled to withdraw their election
if the Paying Agent receives, not later than five 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
-53-
and a statement that such Holder is withdrawing his election to have
such Security purchased;
(7) 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; provided, however,
that each Security repurchased and each new Security issued shall be
in a principal amount of $1,000 or integral multiples thereof; and
(8) the circumstances and relevant facts regarding such
Change of Control.
(d) On or before the Change of Control Payment Date, the Company shall
(i) accept for payment Securities or portions thereof (in integral multiples of
$1,000) validly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent in accordance with Section 2.14 United States Government
Obligations sufficient to pay the repurchase price plus accrued and unpaid
interest, if any, of all Securities so tendered and (iii) deliver to the
Trustee Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being repurchased by the Company. Upon
receipt by the Paying Agent of the monies specified in clause (ii) above and a
copy of the Officers' Certificate specified in clause (iii) above, the Paying
Agent shall promptly mail to the Holders so accepted payment in an amount equal
to the repurchase price plus accrued and unpaid interest, if any, out of the
funds deposited with the Paying Agent in accordance with the preceding
sentence. The Trustee shall promptly authenticate and mail to such Holders new
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Upon the payment of the repurchase price for the
Securities accepted for repurchase, the Trustee shall return the Securities
repurchased to the Company for cancellation. Any monies remaining after the
repurchase of Securities pursuant to a Change of Control Offer shall be
returned within three Business Days by the Trustee to the Company except with
respect to monies owed as obligations to the Trustee pursuant to Article Seven.
For purposes of this Section 4.10, the Trustee shall, except with respect to
monies owed as obligations to the Trustee pursuant to Article Seven, act as the
Paying Agent.
(e) If the Company makes an Change of Control Offer, the Company will
comply with all applicable tender offer laws and regulations, including, to the
extent applicable, Section 14(e) and Rule 14e-1 under the Exchange Act, and any
other applicable Federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Securities are
listed, and any violation of the provisions of this Indenture relating to such
Change of Control Offer occurring as a result of such compliance shall not be
deemed a Default or an Event of Default.
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SECTION 4.11. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary that is not a
Guarantor, or if the Company or any of its Restricted Subsidiaries shall
organize, acquire or otherwise invest in another Restricted Subsidiary, then
such transferee or acquired or other Restricted Subsidiary shall (i) execute
and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Restricted Subsidiary shall
unconditionally guarantee all of the Company's obligations under the Securities
and this Indenture on the terms set forth in this Indenture and (ii) deliver to
the Trustee an Opinion of Counsel that such supplemental indenture has been
duly authorized, executed and delivered by such Restricted Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary. Thereafter, such Restricted Subsidiary shall be a
Guarantor for all purposes of this Indenture.
SECTION 4.12. Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any
Subsidiary of the Company as an "Unrestricted Subsidiary" under this Indenture
(a "Designation") only if:
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
and
(ii) the Company would be permitted to make an Investment
(other than a Permitted Investment) at the time of such Designation
(assuming the effectiveness of such Designation) pursuant to Section
4.05 in an amount (the "Designation Amount") equal to the fair market
value of the Company's proportionate interest in the net worth of such
Subsidiary on such date calculated in accordance with GAAP.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
4.05 for all purposes of this Indenture in the Designation Amount.
(b) Neither the Company nor any Restricted Subsidiary shall at any
time (x) provide credit support for or guarantee any Indebtedness of any
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness); provided that the Company may pledge equity
interests or Indebtedness of any Unrestricted Subsidiary on a nonrecourse basis
such that the pledgee has no claim whatsoever against the Company other than to
obtain such pledged property, (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly or
indirectly liable for any Indebted-
-55-
ness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to
be accelerated or payable prior to its final scheduled maturity upon the
occurrence of a default with respect to any Indebtedness of any
Unrestricted Subsidiary, except for any nonrecourse guarantee given
solely to support the pledge by the Company of the capital Stock of any
Unrestricted Subsidiary. For purposes of the foregoing, the Designation
of a Subsidiary of the Company as an Unrestricted Subsidiary shall be
deemed to include the Designation of all of the Subsidiaries of such
Subsidiary.
(c) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") if:
(i) no Default shall have occurred and be continuing at the
time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted
Subsidiary outstanding immediately following such Revocation would, if
incurred at such time, have been permitted to be incurred for all
purposes of this Indenture.
(d) All Designations and Revocations must be evidenced by Board
Resolutions of the Company delivered to the Trustee certifying compliance with
the foregoing provisions.
SECTION 4.13. Conduct of Business.
The Company and its Restricted Subsidiaries shall not engage in any
businesses other than Permitted Businesses.
SECTION 4.14. Reports to Holders.
The Company shall deliver to the Trustee and the Holders within 15
days after the filing of the same with the Commission, copies of the quarterly
and annual reports and of the information, documents and other reports, if any,
which the Company is required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the Commission within the time periods
specified by the Exchange Act and the rules of regulations promulgated
thereunder, to the extent permitted, and provide the Trustee and Holders with
such annual reports and such information, documents and other reports specified
in Sections 13 and 15(d) of the Exchange Act within 15 days after the filing of
the same with the Commission or on such date as the same would have been
required to be filed with the Commission. The Company, the Guarantors and their
respective subsidiaries shall also comply with the other provisions of
TIA Section 314(a).
-56-
In addition, for so long as any Securities remain outstanding, the Company
shall furnish to the Holders, the Trustee and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act, and, to any
beneficial holder of Securities, if not obtainable from the SEC, information of
the type that would be filed with the SEC pursuant to the foregoing provisions,
upon the request of any such holder.
SECTION 4.15. Corporate Existence.
Subject to Article Five, the Company shall do or shall 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 of each such Restricted Subsidiary and the rights (charter and
statutory) and material franchises of the Company and the Restricted
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Restricted Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries, taken as a whole, and
that the loss thereof is not, and will not be, adverse in any material respect
to the Holders; provided, further, however, that a determination of the Board
of Directors of the Company shall not be required in the event of a merger of
one or more Wholly Owned Restricted Subsidiaries of the Company with or into
another Wholly Owned Restricted Subsidiary of the Company or another Person, if
the surviving Person is a Wholly Owned Restricted Subsidiary of the Company
organized under the laws of the United States or a State thereof or of the
District of Columbia.
SECTION 4.16. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments
and governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or property of the Company or any
Restricted Subsidiary and (2) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Restricted
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
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SECTION 4.17. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of its
Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.18. Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or leased
to it or any Restricted Subsidiary and used or useful in the conduct of its
business or the business of any Restricted Subsidiary to be maintained and kept
in normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 4.18 shall prevent the Company or any
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors or of the board of
directors of the Restricted Subsidiary concerned, or of an officer (or other
agent employed by the Company or of any Restricted Subsidiary) of the Company
or such Restricted Subsidiary having managerial responsibility for any such
property, desirable in the conduct of the business of the Company or any
Restricted Subsidiary, and if such discontinuance or disposal is not adverse in
any material respect to the Holders.
(b) The Company shall maintain, and shall cause the Restricted
Subsidiaries to maintain, insurance with responsible carriers against such
risks and in such amounts, and with such deductibles, retentions, self-insured
amounts and co-insurance provisions, as are customarily carried by similar
businesses of similar size, including property and casualty loss, and workers'
compensation insurance.
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SECTION 4.19. Compliance Certificate.
The Company shall deliver to the Trustee within 90 days after the
close of each fiscal year a certificate signed by the principal executive
officer or chief financial officer stating that a review of the activities of
the Company has been made under the supervision of the signing officers with a
view to determining whether a Default or Event of Default has occurred and
whether or not the signers know of any Default or Event of Default by the
Company that occurred during such fiscal year. If they do know of such a
Default or Event of Default, the certificate shall describe all such Defaults
or Events of Default, their status and the action the Company is taking or
proposes to take with respect thereto. The first certificate to be delivered by
the Company pursuant to this Section 4.19 shall be for the fiscal year ending
December 31, 1998.
SECTION 4.20. Waiver of Stay, Extension or Usury Laws.
Each of the Company and the Guarantors covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law, which would prohibit or forgive
the Company or such Guarantor from paying all or any portion of the principal
of and/or interest, if any, 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 and each Guarantor hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 4.21. 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 for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of the
Securities, this Indenture or the Registration Rights Agreement unless such
consideration is offered to be paid or agreed to be paid to all Holders that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.
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ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets.
(a) The Company shall not, in a single transaction or series of
related transactions, consolidate or merge with or into any Person, or sell,
assign, transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary to sell, assign, transfer, lease, convey or otherwise
dispose of) all or substantially all of the Company's assets (determined on a
consolidated basis for the Company and the Company's Restricted Subsidiaries)
whether as an entirety or substantially as an entirety to any Person, unless:
(i) either (1) the Company shall be the surviving or continuing corporation or
(2) the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale, assignment,
transfer, lease, conveyance or other disposition the properties and assets of
the Company and of the Company's Restricted Subsidiaries substantially as an
entirety (the "Surviving Entity") (x) shall be a corporation organized and
validly existing under the laws of the United States or any State thereof or
the District of Columbia and (y) shall expressly assume, by supplemental
indenture (in form and substance satisfactory to the Trustee), executed and
delivered to the Trustee, the due and punctual payment of the principal of, and
premium, if any, and interest on all of the Securities and the performance of
every covenant of the Securities and this Indenture on the part of the Company
to be performed or observed; (ii) immediately after giving effect to such
transaction and the assumption contemplated by clause (i)(2)(y) above
(including giving effect to any Indebtedness and Acquired Indebtedness incurred
or anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be, (1)
shall have a Consolidated Net Worth equal to or greater than the Consolidated
Net Worth of the Company immediately prior to such transaction and (2) shall be
able to incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.03; (iii) immediately before and
immediately after giving effect to such transaction and the assumption
contemplated by clause (i)(2)(y) above (including giving effect to any
Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred
and any Lien granted in connection with or in respect of the transaction), no
Default shall have occurred or be continuing; and (iv) the Company or the
Surviving Entity shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and, if a
supplemental indenture is required in connection with such transaction, such
supplemental indenture comply with the applicable provisions of this Indenture
and that all conditions precedent in this Indenture relating to such
transaction have been satisfied.
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For purposes of the foregoing, the transfer by lease, assignment, sale
or otherwise, in a single transaction or series of transactions, of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(b) Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of its Guarantee and this Indenture in
connection with any transaction complying with Section 4.06) shall not, and the
Company shall not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:
(i) the entity formed by or surviving any such consolidation or merger (if
other than the Guarantor) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation organized
and existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) such entity assumes by supplemental indenture all of
the obligations of the Guarantor on its Guarantee; (iii) immediately after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing; and (iv) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis, the
Company could satisfy the provisions of clause (ii) of paragraph (a) above. Any
merger or consolidation of a Guarantor with and into the Company (with the
Company being the surviving entity) or another Guarantor that is a Wholly Owned
Restricted Subsidiary of the Company need only comply with clause (iv) of
paragraph (a) above.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 5.01 in which the Company is
not the continuing corporation, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company, as applicable, under this Indenture and the Securities, as
applicable, and the Registration Rights Agreement with the same effect as if
such surviving entity had been named as such and the Company shall be
discharged from its Obligations under this Indenture and the Securities or such
Guarantor shall be discharged from its Obligations under this Indenture and its
Guarantee.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(i) the failure to pay interest on any Securities when the
same becomes due and payable and the default continues for a period of
30 days (whether or not prohibited by Article Eight);
(ii) the failure to pay the principal on any Securities, when
such principal becomes due and payable, at maturity, upon redemption
or otherwise (including the failure to make a payment to purchase
Securities tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer) (whether or not prohibited by Article Eight);
(iii) a default in the observance or performance of any other
covenant or agreement contained in this Indenture which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Securities (except in the case of
a default with respect to Article Five, which will constitute an Event
of Default with such notice requirement but without such passage of
time requirement);
(iv) a default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any
of its Restricted Subsidiaries having an outstanding principal amount
of $10 million or more individually or in the aggregate that has
resulted in the acceleration of the payment of such Indebtedness or
failure by the Company or any of its Restricted Subsidiaries to pay
principal when due at the stated maturity of any such Indebtedness and
such default or defaults shall have continued after any applicable
grace period and shall not have been cured or waived;
(v) one or more judgments in an aggregate amount in excess of
$10 million shall have been rendered against the Company or any of its
Restricted Subsidiaries and such judgments remain undischarged, unpaid
or unstayed for a period of 60 days after such judgment or judgments
become final and non-appealable;
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(vi) the Company or any Significant Restricted Subsidiary
pursuant to or within the meaning of any Bankruptcy Law: (i) admits in
writing its inability to pay its debts generally as they become due;
(ii) commences a voluntary case or proceeding; (iii) consents to the
entry of an order for relief against it in an involuntary case or
proceeding; (iv) consents or acquiesces in the institution of a
bankruptcy or insolvency proceeding against it; (v) consents to the
appointment of a Custodian of it or for all or substantially all of
its property; or (vi) makes a general assignment for the benefit of
its creditors, or any of them takes any action to authorize or effect
any of the foregoing;
(vii) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the
Company or any Significant Restricted Subsidiary in an involuntary
case or proceeding; (ii) appoints a Custodian of the Company or any
Significant Restricted Subsidiary for all or substantially all of its
property; or (iii) orders the liquidation of the Company or any
Significant Restricted Subsidiary; and in each case the order or
decree remains unstayed and in effect for 60 days; provided, however,
that if the entry of such order or decree is appealed and dismissed on
appeal, then the Event of Default hereunder by reason of the entry of
such order or decree shall be deemed to have been cured; or
(viii) any of the Guarantees ceases to be in full force and
effect or any of the Guarantees is declared to be null and void and
unenforceable or any of the Guarantees is found to be invalid or any
of the Guarantors denies its liability under its Guarantee (other than
by reason of release of a Guarantor in accordance with the terms of
this Indenture).
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default (other than an Event of Default specified in
clause (vi) or (vii) of Section 6.01 with respect to the Company) shall occur
and be continuing, the Trustee or the Holders of at least 25% in aggregate
principal amount of outstanding Securities may declare the principal of, and
premium, if any, and accrued interest on all the Securities to be due and
payable by notice in writing to the Company (and to the Trustee if given by the
Holders) specifying the respective Event of Default and that it is a "notice of
acceleration," and the same shall become immediately due and payable.
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If an Event of Default specified in clause (vi) or (vii) of Section
6.01 with respect to the Company occurs and is continuing, then all unpaid
principal of, and premium, if any, and accrued interest on all of the
outstanding Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
At any time after a declaration of acceleration with respect to the
Securities as described in the two preceding paragraphs, the Holders of a
majority in principal amount of the Securities may rescind and cancel such
declaration and its consequences (i) if the recission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (iii) to the extent the payment of such interest
is lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration or acceleration, has
been paid, (iv) if 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 an Event of Default of the type described
in clause (vi) or (vii) of Section 6.01, the Trustee shall have received an
Officers' Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived. 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 interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy
maturing 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 Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the declaration of
acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or in-
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terest on any Security as specified in clauses (i) and (ii) of Section
6.01 or a Default in respect of any term or provision of this Indenture
that may not be amended or modified without the consent of each Holder
affected as provided in Section 10.02. The Company shall deliver to the
Trustee an Officers' Certificate stating that the requisite percentage
of Holders have consented to such waiver and attaching copies of such
consents. In case of any such waiver, the Company, the Trustee and the
Holders shall be restored to their former positions and rights hereunder
and under the Securities, respectively. This paragraph of this Section
6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of not less than a majority in
principal amount of the outstanding Securities 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 it.
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly
prejudicial to the rights of another Holder, or that may involve the
Trustee in personal liability; provided, however, that the Trustee may
take any other action deemed proper by the Trustee which is not
inconsistent with such direction. In the event the Trustee takes any
action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole
discretion against any loss or expense caused by taking such action or
following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Securities, as
permitted by the TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
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(ii) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the
Trustee to pursue a remedy;
(iii) such Holder or Holders offer and, if requested, provide
to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) 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
(v) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee
a direction which, in the opinion of the Trustee, is inconsistent with
the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and premium, if any or interest
on a 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, 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 or interest specified
in clause (i) or (ii) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with interest overdue
on principal and to the extent that payment of such interest is lawful,
interest on overdue installments of interest, in each case at the rate per
annum borne by the Securities and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee 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
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agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company (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 property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Holder to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agent and counsel, and any other amounts due the Trustee under Section
7.07. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this
Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 shall not apply to a suit by the Trustee, a
suit by a Holder or group of Holders of more than 10% in aggregate principal
amount of the outstanding Securities, or to any suit instituted
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by any Holder for the enforcement or the payment of the principal or interest
on any Securities on or after the respective due dates expressed in the
Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; provided,
however, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee shall 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; and
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(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) 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 duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it or it does not receive from such Holders an
indemnity satisfactory to it in its sole discretion against such risk,
liability, loss, fee or expense which might be incurred by it in compliance
with such request or direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on and shall be protected in acting or
refraining to act upon any document believed by it to be genuine and to have
been signed or presented by the proper person or parties . The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and/or an Opinion of Counsel, which shall conform to the
provisions of Section 13.05. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion.
(c) The Trustee may act through attorneys and agents of its selection
and shall not be responsible for the misconduct or negligence of any agent or
attorney (other than an agent who is an employee of the Trustee) appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers.
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(e) 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.
(f) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(h) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof or
unless the Trustee shall have received written notice thereof at the Corporate
Trust Office of the Trustee, and such notice references the Securities and this
Indenture.
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 otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, subject
to Sections 7.10 and 7.11. Any Agent may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer.
The Trustee assumes no responsibility for the correctness of, and
makes no representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in con-
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nection with the sale of Securities or any statement in the Securities other
than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee knows of such Defaults or Events of Default, the Trustee
shall mail to each Holder notice of the Default or Event of Default
within 30 days after the occurrence thereof. Except in the case of a
Default or an Event of Default in payment of principal of or interest on
any Security or a Default or Event of Default in complying with Section
5.01, the Trustee may withhold the notice if and so long as a committee
of its Trust Officers in good faith determines that withholding the
notice is in the interest of Holders. This Section 7.05 shall be in lieu
of the proviso to Section 315(b) of the TIA and such proviso to Section
315(b) of the TIA is hereby expressly excluded from this Indenture and
the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), within 60 days after each December 1
beginning with the December 1 following the date of this Indenture, the Trustee
shall mail to each Holder a report dated as of such December 1 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA
Section 313(b), (c) and (d).
A copy of each such report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange, if any, on which the Securities
are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including reasonable fees, disbursements and expenses of its
agents and counsel) incurred or made by it in addition to the compensation for
its services except any such disbursements, expenses and advances as may be
attributable to the Trustee's negligence or bad faith. Such expenses shall
include, but are not limited to, the reasonable compensation, disbursements and
expenses of the Trustee's agents, accountants, experts and counsel and any
taxes or other expenses incurred by a trust created pursuant to Sections 9.01
and 9.03 hereof.
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The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including, but not limited to, 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, except to the extent
that such loss, damage, claim, liability or expense is due to its own
negligence or bad faith. The Trustee shall notify the Company 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 of its obligations hereunder. The Company shall defend the claim and
the Trustee shall cooperate in the defense (and may employ its own counsel) at
the Company's expense; provided, however, that the Trustee shall have the right
to employ its own counsel in any such action only if a conflict exists (based
upon advice of counsel) between the Company and the Trustee, in which case the
reasonable fees and expenses of Trustee's counsel will be at the expense of the
Company.
The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by
the Trustee as a result of the violation of this Indenture by the Trustee.
To secure the Company's payment obligations pursuant to this Section
7.07, the Trustee shall have a Lien prior to the Securities against all money
or property held or collected by the Trustee, in its capacity as Trustee,
except money or property held in trust to pay principal of or interest on
particular Securities or the repurchase price or redemption price of any
Securities to be purchased pursuant to a Net Proceeds Offer, a Change of
Control Offer or a redemption, as the case may be.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (vi) or (vii) of Section 6.01 occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Company's obligations
under this Section 7.07 and any claim arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Company's
obligations pursuant to Article Nine and any rejection or termination under any
Bankruptcy Law.
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SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company
in writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Holder.
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 at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
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Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). 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. If the
Trustee has or shall acquire any "conflicting interest" within the
meaning of TIA Section 310(b), the Trustee and the Company shall comply
with the provisions of TIA Section 310(b); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any
indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA
Section 310(b)(1) are met. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, the
Trustee shall resign immediately in the manner and with the effect
hereinbefore specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, that all
Securities shall be
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issued subject to the provisions of this Article Eight; and
each person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that all payments of the
principal of, premium, if any, and interest on the Securities by the Company
shall, to the extent and in the manner set forth in this Article Eight, be
subordinated and junior in right of payment to the prior payment in full in
cash of all amounts payable under Senior Indebtedness.
SECTION 8.02. No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment (excluding any payment or
distribution of Permitted Junior Securities and excluding any payment from
funds deposited in accordance with, and held in trust for the benefit of
Holders pursuant to Article Nine (a "Defeasance Trust Payment")) by the Company
of principal of, premium, if any, or interest on the Securities, whether
pursuant to the terms of the Securities, upon acceleration, pursuant to a Net
Proceeds Offer, a Change of Control Offer or otherwise, shall be made if, at
the time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Senior Indebtedness, whether at maturity, on
account of mandatory redemption or prepayment, acceleration or otherwise, and
such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the holders of such Senior Indebtedness. In
addition, during the continuance of any non-payment event of default with
respect to any Designated Senior Indebtedness pursuant to which the maturity
thereof may be immediately accelerated, and upon receipt by the Trustee of
written notice (a "Payment Blockage Notice") from the holder or holders of such
Designated Senior Indebtedness or the trustee or agent acting on behalf of the
holders of such Designated Senior Indebtedness, then, unless and until such
event of default has been cured or waived or has ceased to exist or such
Designated Senior Indebtedness has been discharged or repaid in full in cash or
the benefits of these provisions have been waived by the holders of such
Designated Senior Indebtedness, no direct or indirect payment (excluding any
payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment) will be made by the Company of principal of, premium,
if any, or interest on the Securities, whether pursuant to the terms of the
Securities, upon acceleration, pursuant to an Offer to Purchase or otherwise,
to such Holders, during a period (a "Payment Blockage Period") commencing on
the date of receipt of such notice by the Trustee and ending 179 days
thereafter.
Notwithstanding anything in this Article Eight or the Securities to
the contrary, (x) in no event will a Payment Blockage Period extend beyond 179
days from the date the Payment Blockage Notice in respect thereof was given,
(y) there shall be a period of at least 181 consecutive days in each 360-day
period when no Payment Blockage Period is in effect and (z) not more than one
Payment Blockage Period may be commenced with respect to the Securities during
any period of 360 consecutive days. No event of default that existed or was
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continuing on the date of commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness initiating such Payment Blockage
Period (to the extent the holder of Designated Senior Indebtedness, or trustee
or agent, giving notice commencing such Payment Blockage Period had knowledge
of such existing or continuing event of default) may be, or be made, the basis
for the commencement of any other Payment Blockage Period by the holder or
holders of such Designated Senior Indebtedness or the trustee or agent acting
on behalf of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such event of default has been cured or
waived for a period of not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by Section 8.02(a), such payment shall be held in trust for the benefit of, and
shall be paid over or delivered to, the holders of Designated Senior
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Designated Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that, upon notice from the Trustee to the holders of
Designated Senior Indebtedness that such prohibited payment has been made, the
holders of the Designated Senior Indebtedness (or their representative or
representatives or a trustee or trustees) notify the Trustee in writing of the
amounts then due and owing on the Designated Senior Indebtedness, if any, and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Designated Senior Indebtedness.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, upon
any dissolution or winding up or total liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings (excluding any payment or distribution of
Permitted Junior Securities and any Defeasance Trust Payment), all Senior
Indebtedness then due shall first be paid in full in cash before the Holders or
the Trustee on behalf of such Holders shall be entitled to receive any payment
by the Company of the principal of, premium, if any, or interest on the
Securities, or any payment by the Company to acquire any of the Securities for
cash, property or securities, or any distribution by the Company with respect
to the Securities of any cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities and excluding any Defeasance Trust
Payment). Before any payment may be made by, or on behalf of, the Company of
the principal of, premium, if any, or interest on the Securities upon any such
dissolution or winding up or total liquidation or reorganization, whether
voluntary or involuntary or in bankruptcy, insolvency, receivership or other
proceedings, any payment or distribution of assets or securities of the Company
of
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any kind or character, whether in cash, property or securities (excluding
any payment or distribution of Permitted Junior Securities and excluding any
Defeasance Trust Payment), to which the Holders or the Trustee on their behalf
would be entitled, but for the subordination provisions of this Indenture,
shall be made by the Company or by any receiver, trustee in bankruptcy,
liquidation trustee, agent or other Person making such payment or distribution,
directly to the holders of the Senior Indebtedness (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such
holders) or their representatives or to the trustee or trustees or agent or
agents under any agreement or indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Senior Indebtedness in full in cash after
giving effect to any prior or concurrent payment, distribution or provision
therefor to or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities and excluding any Defeasance Trust Payment), shall be
received by the Trustee or any Holder of Securities at a time when such payment
or distribution is prohibited by Section 8.03(a) and before all obligations in
respect of Senior Indebtedness are paid in full in cash, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered to, the holders of Senior Indebtedness (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders) or their respective representatives, or to the trustee or
trustees or agent or agents under any indenture pursuant to which any of such
Senior Indebtedness may have been issued, as their respective interests may
appear, for application to the payment of Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full in cash after giving
effect to any prior or concurrent payment, distribution or provision therefor
to or for the holders of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 8.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
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SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company made on such Senior Indebtedness until
the principal of and interest on the Securities shall be paid in full in cash;
and, for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders or the Trustee on their behalf would be entitled except for the
provisions of this Article Eight, and no payment over pursuant to the
provisions of this Article Eight to the holders of Senior Indebtedness by
Holders or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders, be deemed
to be a payment by the Company to or on account of the Senior Indebtedness. It
is understood that the provisions of this Article Eight are and are intended
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Eight shall have been
applied, pursuant to the provisions of this Article Eight, to the payment of
all amounts payable under Senior Indebtedness, then and in such case, the
Holders shall be entitled to receive from the holders of such Senior
Indebtedness any payments or distributions received by such holders of Senior
Indebtedness in excess of the amount required to make payment in full in cash
of such Senior Indebtedness.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company and
the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders the principal of and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent any Holder or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if
any, under this Article Eight of the holders of the Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Eight shall restrict the right of the Trustee or the Holders to
take any action to declare the Securities to be due and payable prior to their
stated maturity pursuant to Section 6.01 or to
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pursue any rights or remedies hereunder; provided, however, that all Senior
Indebtedness then due and payable shall first be paid in full in cash before
the Holders or the Trustee are entitled to receive any direct or indirect
payment from the Company of principal of or interest on the Securities.
SECTION 8.06. Notice to Trustee.
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 in respect of the Securities pursuant to the provisions of this
Article Eight. The Trustee shall not be charged with knowledge of the existence
of any event of default with respect to any Senior Indebtedness or of any other
facts which would prohibit the making of any payment to or by the Trustee
unless and until the Trustee shall have received notice in writing at its
Corporate Trust Office to that effect signed by an Officer of the Company, or
by a holder of Senior Indebtedness or trustee or agent therefor; and prior to
the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided, however, that
if the Trustee shall not have received the notice provided for in this Section
8.06 at least two Business Days prior to the date upon which by the terms of
this Indenture any moneys shall become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any
Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from the Company and
to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.06 shall limit the right
of the holders of Senior Indebtedness to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of,
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or a trustee or representative on behalf of any such
holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eight, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article Eight, 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.
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SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred to
in this Article Eight, the Trustee and the Holders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings
are pending, or upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, 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 distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Eight.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Eight with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eight, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Section 8.03(b)). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders or to
the Company or to any other person cash, property or securities to which any
holders of Senior Indebtedness shall be entitled by virtue of this Article
Eight or otherwise.
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein 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
noncompliance by the Company with the terms of this Indenture, regardless of
any knowledge thereof which any such holder may have or otherwise be charged
with. The provisions of this Article Eight are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Indebtedness.
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SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder by his acceptance of such Securities authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Eight, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, total liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his
Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Eight shall not be
construed as preventing the occurrence of an Event of Default specified in
Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
subordination provided in this Article Eight or the obligations hereunder of
the Holders to the holders of Senior Indebtedness, do any one or more of the
following: (a) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding or secured; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (d) exercise or refrain from exercising any rights against
the Company and any other Person.
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SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust
for Holders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Article Nine shall be for
the sole benefit of the Holders and shall not be subject to this Article Eight.
Nothing contained in this Article Eight or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Section
8.02, from making payments of principal of and interest on the Securities or
from depositing with the Trustee any moneys for such payments or from effecting
a termination of the Company's and the Guarantors' obligations under the
Securities and this Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 8.02(b) or in Section 8.06.
The Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Indebtedness
of the acceleration.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
The Company may terminate its and the Guarantors' obligations under
the Securities and this Indenture, except those obligations referred to in the
penultimate paragraph of this Section 9.01, if:
(i) either (a) all the Securities theretofore authenticated
and delivered (except lost, stolen or destroyed Securities which have
been replaced or paid and Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust) have been delivered to the Trustee for cancellation or
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(b) all Securities not theretofore delivered to the Trustee for
cancellation have become due and payable or have been called for
redemption and the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to pay and
discharge the entire Indebtedness on the Securities not theretofore
delivered to the Trustee for cancellation, for principal of, premium,
if any, and interest on the Securities to the date of deposit together
with irrevocable written instructions from the Company directing the
Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;
(ii) the Company has paid all other sums payable under this
Indenture by the Company; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the first paragraph of this Section 9.01, the
Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10,
2.12, 2.13 and 4.01, 4.02, 7.07, 7.08, 9.05 and 9.06 shall survive until the
Securities are no longer outstanding. Thereafter the Company's obligations in
Sections 7.07, 9.05 and 9.06 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon written request
shall acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above. The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the United
States Government Obligations deposited pursuant to this Section 9.01 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of outstanding
Securities.
SECTION 9.02. Legal Defeasance and Covenant Defeasance.
(a) The Company may at its option terminate its and the Guarantors'
obligations in respect of the Securities by delivering all outstanding
Securities to the Trustee for cancellation and paying all sums payable by it on
account of principal of and interest on all Securities or otherwise. In
addition to the foregoing, the Company may, at its option, at any time elect to
have either paragraph (b) or (c) below be applied to all outstanding
Securities, subject in either case to compliance with the conditions set forth
in Section 9.03.
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(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest on the Securities when such
payments are due, (ii) the Company's obligations with respect to the Securities
concerning issuance of temporary Securities, registration of Securities,
mutilated, destroyed, lost or stolen Securities and the maintenance of an
office or agency for payments, (iii) the rights, powers, trust, duties and
immunities of the Trustee under this Indenture and the Company's obligations in
connection therewith and (iv) Article Nine of this Indenture (hereinafter,
"Legal Defeasance"). Subject to compliance with this Article Nine, the Company
may exercise its option under this paragraph (b) notwithstanding the prior
exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be released from its
obligations under the covenants contained in Sections 4.03 through 4.19 and
Article Five with respect to the outstanding Securities (hereinafter, "Covenant
Defeasance") and thereafter any omission to comply with such obligations shall
not constitute a Default or an Event of Default with respect to the Securities.
In addition, upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), subject to the satisfaction of the
conditions set forth in Section 9.03, any failure or omission to comply with
such obligations shall not constitute a Default or Event of Default with
respect to the Securities.
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.
In order to exercise either Legal Defeasance pursuant to Section
9.02(b) or Covenant Defeasance pursuant to Section 9.02(c):
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders cash in U.S. dollars,
non-callable United States Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium, if any, and interest on the Securities on
the stated Final Maturity Date or on the applicable Redemption Date,
as the case may be;
(ii) in the case of an election under Section 9.02(b), the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or
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there has been published by, the Internal Revenue Service a ruling or
(B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the
Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal Defeasance had
not occurred;
(iii) in the case of an election under Section 9.02(c), the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders 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;
(iv) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit or insofar as Events of
Default described in Section 6.01(vi) or (vii) are concerned, at any
time in the period ending on the 91st day after the date of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under this
Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound;
(vi) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;
(vii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with;
(viii) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that after the 91st day following the
deposit, the trust funds will
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not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally;
and
(ix) certain other customary conditions precedent are
satisfied.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (ii) above with respect to an election under Section 9.02(b) need not be
delivered if all Securities not therefore delivered to the Trustee for
cancellation (x) have become due and payable, (y) will become due and payable
on the maturity date within one year or (z) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the expense, of the
Company.
SECTION 9.04. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Sections 9.01 and 9.03, and shall
apply the deposited money and the money from United States Government
Obligations in accordance with this Indenture solely to the payment of
principal of and interest on the Securities.
SECTION 9.05. Repayment to Company.
Subject to Sections 7.07, 9.01 and 9.03, the Trustee shall promptly
pay to the Company upon written request any excess money held by it at any
time. The Trustee shall pay to the Company upon written request any money held
by it for the payment of principal or interest that remains unclaimed for two
years; provided, however, that the Trustee before being required to make any
payment may at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that, after
a date specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining
shall be repaid to the Company. After payment to the Company, Holders entitled
to money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon
cease.
SECTION 9.06. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 or 9.03 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 Company's and the Guarantors' obligations under
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this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 9.01 or 9.03, as the case may be,
until such time as the Trustee is permitted to apply all such money or United
States Government Obligations in accordance with Section 9.01 or 9.03, as the
case may be; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
(i) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not, in the opinion of
the Trustee, adversely affect the rights of any Holder in any material
respect;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and his Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(iv) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not adversely affect
the rights of any Holder under this Indenture;
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(vii) to evidence the succession of another Person to any
Guarantor and the assumption by any such successor of the covenants of
such Guarantor herein and in the Guarantee in connection with any
transaction complying with Article Five of this Indenture;
(viii) to add to the covenants of the Company or the
Guarantors for the benefit of the Holders, or to surrender any right
or power herein conferred upon the Company or any Guarantor;
(ix) to secure the Securities pursuant to the requirements of
Section 4.08 or otherwise; or
(x) to reflect the release of a Guarantor from its
obligations with respect to its Guarantee in accordance with the
provisions of Section 11.03 and to add a Guarantor pursuant to the
requirements of Section 4.11;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of
the outstanding Securities. Subject to Section 6.07, the Holders of a majority
in principal amount of the outstanding Securities may waive compliance by the
Company or any Guarantor with any provision of this Indenture or the
Securities. However, without the consent of each Holder affected, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may not:
(i) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional
redemption or repurchase provisions of any Security or this Indenture
in a manner adverse to the Holders;
(ii) reduce the principal amount (or premium) of any
Security;
(iii) reduce the rate of or extend the time for payment of
interest, including defaulted interest, on any Security;
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(iv) change the place or currency of payment of the principal
of (or premium) or interest on any Security;
(v) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07
or this Section 10.02 (other than to add sections of this Indenture or
the Securities which may not be amended, supplemented or waived
without the consent of each Holder affected);
(vi) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default;
(vii) waive a Default in the payment of the principal of or
interest on or redemption or purchase payment with respect to any
Security (except a rescission of acceleration of the Securities by the
Holders as provided in Section 6.02 and a waiver of the payment
default that resulted from such acceleration);
(viii) modify the ranking or priority of the Securities or
the Guarantee in respect of any Guarantor, or modify the definition of
Senior Indebtedness or Guarantor Senior Indebtedness, or amend or
modify any of the provisions of Article Eight or Article Twelve in any
manner adverse to the Holders;
(ix) release any Guarantor from any of its obligations under
its Guarantee or this Indenture otherwise than in accordance with this
Indenture; or
(x) modify the provisions relating to any Net Proceeds Offer
pursuant to Section 4.06 or a Change of Control Offer pursuant to
Section 4.10 in a manner materially adverse to the Holders.
An amendment under this Section 10.02 may not make any change under
Article Eight or Article Twelve hereof that adversely affects in any material
respect the rights of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, then outstanding unless the holders of such
Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, (or
any representative thereof authorized to give a consent) shall have consented
to such change.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
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After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03. 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 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder is a continuing consent by the Holder and every subsequent Holder of
that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on
any Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
sentence of the immediately preceding paragraph, those persons who were Holders
of Securities at such record date (or their duly designated proxies), and only
those persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such persons
continue to be Holders of such Securities after such record date. No such
consent shall be valid or effective for more than 90 days after such record
date.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (i)
through (x) of Section 10.02. In that case the amendment, supplement or waiver
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.
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SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security 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 and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Company
and the Guarantors, enforceable in accordance with its terms (subject to
customary exceptions). The Trustee may, but shall not be obligated to, execute
any such amendment, supplement or waiver which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise. In signing any
amendment, supplement or waiver, the Trustee shall be entitled to receive an
indemnity reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Guarantee" or "Security Guarantee") to each Holder of a
Security authenticated by the Trustee and to the Trustee and its successors and
assigns that the principal of and interest on the Securities will be promptly
paid in full when due, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, and interest on the overdue principal
and interest on any overdue interest on the Securities and all other
obligations of the Company to the Holders or the Trustee hereunder or under the
Securities will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; subject, however, to the limitations set forth in
Section 11.04. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by
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any Holder of the Securities with respect to any provisions hereof or thereof,
the recovery of any judgment against the Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that the Guarantee will not be discharged except by
complete performance of the obligations contained in the Securities, this
Indenture, and this Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Guarantor, any amount paid by the Company or any Guarantor to the
Trustee or such Holder, this Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six for the purpose of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forth become due and
payable by each Guarantor for the purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee 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.
SECTION 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with the terms of this
Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the Equity Interests of any Guarantor are sold (including
by issuance or otherwise) by the Company in a transaction constituting an Asset
Sale and (x) the Net Cash Proceeds from such Asset Sale are used in accordance
with Section 4.05 or (y) the Company delivers to the Trustee an Officers'
Certificate to the effect that the Net Cash Proceeds from such Asset Sale shall
be used in accordance with Section 4.06 and within the time limits specified by
Section 4.06, then each Guarantor (in the case of defeasance) or such Guarantor
(in the case of compliance with Section 5.01(b) or in the event of a sale or
other disposition of all of the Equity Interests of such Guarantor) or the
corporation acquiring such assets (in the event of a sale or other disposition
of all or substantially all of the assets of such Guarantor) shall be released
and discharged from all obligations under
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this Article Eleven without any further action required on the part of the
Trustee or any Holder. The Trustee shall, at the sole cost and expense of the
Company and upon receipt at the reasonable request of the Trustee of an Opinion
of Counsel that the provisions of this Section 11.03 have been complied with,
deliver an appropriate instrument evidencing such release upon receipt of a
request by the Company accompanied by an Officers' Certificate certifying as to
the compliance with this Section 11.03. Any Guarantor not so released remains
liable for the full amount of principal of and interest on the Securities and
the other obligations of the Company hereunder as provided in this Article
Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under its Guarantee
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor (including any Senior
Indebtedness incurred after the Issue Date) and after giving effect to any
collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.05, result in the obligations of such Guarantor under
its Guarantee not constituting such a fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with
GAAP, subject to Section 11.04, for all payments, damages and expenses incurred
by such Funding Guarantor in discharging the Company's obligations with respect
to the Securities or any other Guarantor's obligations with respect to the
Guarantee.
SECTION 11.06. Execution of Security Guarantee.
To further evidence their Guarantee to the Holders, each of the
Guarantors hereby agree to execute a Security Guarantee to be endorsed on each
Security ordered to be
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authenticated and delivered by the Trustee. Each Guarantor hereby agrees that
its Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a Security Guarantee.
Each such Security Guarantee shall be signed on behalf of each Guarantor by its
Chairman of the Board, its President or one of its Vice Presidents prior to the
authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Security Guarantee on behalf of such Guarantor.
Such signature upon the Security Guarantee may be manual or facsimile signature
of such officer and may be imprinted or otherwise reproduced on the Security
Guarantee, and in case such officer who shall have signed the Security
Guarantee shall cease to be such officer before the Security on which such
Security Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Security Guarantee had not ceased to be such officer of such Guarantor.
SECTION 11.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
the Guarantee of such Guarantor shall be issued subject to the provisions of
this Article Twelve; and each person holding any Security, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that all payments of the principal of, premium, if any, and interest on
the Securities pursuant to the Guarantee made by or on behalf of any Guarantor
shall, to the extent and in the manner set forth in this Article Twelve, be
subordinated and junior in
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right of payment to the prior payment in full in cash of all amounts payable
under Guarantor Senior Indebtedness of such Guarantor.
SECTION 12.02. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities,
upon any dissolution or winding up or total liquidation or reorganization of
such Guarantor, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings (excluding any payment or distribution of
Permitted Junior Securities), all Guarantor Senior Indebtedness of such
Guarantor then due shall first be paid in full in cash before the Holders or
the Trustee on behalf of such Holders shall be entitled to receive any payment
by such Guarantor of the principal of, premium, if any, or interest on the
Securities, or any payment by such Guarantor to acquire any of the Securities
for cash, property or securities, or any distribution by such Guarantor with
respect to the Securities of any cash, property or securities (excluding any
payment or distribution of Permitted Junior Securities). Before any payment may
be made by, or on behalf of, any Guarantor of the principal of, premium, if
any, or interest on the Securities upon any such dissolution or winding up or
total liquidation or reorganization, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, any payment or
distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities), to which the Holders or the
Trustee on their behalf would be entitled, but for the subordination provisions
of this Indenture, shall be made by such Guarantor or by any receiver, trustee
in bankruptcy, liquidation trustee, agent or other Person making such payment
or distribution, directly to the holders of Guarantor Senior Indebtedness of
such Guarantor (pro rata to such holders on the basis of the respective amounts
of such Guarantor Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all such Guarantor Senior Indebtedness in full in
cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities), shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
12.02(a) and before all obligations in respect of the Guarantor Senior
Indebtedness of such Guarantor are paid in full in cash, such payment or
distribution shall be received and held in trust for the
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benefit of, and shall be paid over or delivered to, the holders of such
Guarantor Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Guarantor Senior Indebtedness held by such holders)
or their respective representatives, or to the trustee or trustees or agent or
agents under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear,
for application to the payment of such Guarantor Senior Indebtedness remaining
unpaid until all such Guarantor Senior Indebtedness has been paid in full in
cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution
of any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided in Article Five shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 12.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Five.
SECTION 12.03. Subrogation.
Upon the payment in full in cash of all Guarantor Senior Indebtedness
of a Guarantor, or provision for payment, the Holders shall be subrogated to
the rights of the holders of such Guarantor Senior Indebtedness to receive
payments or distributions of cash, property or securities of such Guarantor
made on such Guarantor Senior Indebtedness until the principal of and interest
on the Securities shall be paid in full in cash; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Guarantor
Senior Indebtedness of any cash, property or securities to which the Holders or
the Trustee on their behalf would be entitled except for the provisions of this
Article Twelve, and no payment over pursuant to the provisions of this Article
Twelve to the holders of such Guarantor Senior Indebtedness by Holders or the
Trustee on their behalf shall, as between such Guarantor, its creditors other
than holders of such Guarantor Senior Indebtedness, and the Holders, be deemed
to be a payment by such Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Article Twelve are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Guarantor Senior Indebtedness of
each Guarantor, on the other hand.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article Twelve shall have
been applied, pursuant to the provisions of this Article Twelve, to the payment
of all amounts payable under Guarantor Senior Indebtedness, then and in such
case, the Holders shall be entitled to receive from the
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holders of such Guarantor Senior Indebtedness any payments or distributions
received by such holders of Guarantor Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Guarantor Senior
Indebtedness.
SECTION 12.04. Obligations of Guarantors Unconditional.
Subject to Sections 11.04 and 8.02, nothing contained in this Article
Twelve or elsewhere in this Indenture or in the Securities or the Guaranties is
intended to or shall impair, as among each of the Guarantors and the Holders,
the obligation of each Guarantor, which is absolute and unconditional, to pay
to the Holders the principal of and interest on the Securities as and when the
same shall become due and payable in accordance with the terms of the Guarantee
of such Guarantor, or is intended to or shall affect the relative rights of the
Holders and creditors of any Guarantor other than the holders of Guarantor
Senior Indebtedness of such Guarantor, nor shall anything herein or therein
prevent any Holder or the Trustee on their behalf from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article Twelve of the holders of
Guarantor Senior Indebtedness in respect of cash, property or securities of any
Guarantor received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Twelve shall restrict the right of the Trustee or the Holders to
take any action to declare the Securities to be due and payable prior to their
stated maturity pursuant to Section 6.01 or to pursue any rights or remedies
hereunder; provided, however, that all Guarantor Senior Indebtedness of any
Guarantor then due and payable shall first be paid in full before the Holders
or the Trustee are entitled to receive any direct or indirect payment from such
Guarantor of principal of or interest on the Securities pursuant to such
Guarantor's Guarantee.
SECTION 12.05. Notice to Trustee.
The Company and each Guarantor shall give prompt written notice to the
Trustee of any fact known to the Company or such Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Twelve. The Trustee shall not be
charged with knowledge of the existence of any event of default with respect to
any Guarantor Senior Indebtedness or of any other facts which would prohibit
the making of any payment to or by the Trustee unless and until the Trustee
shall have received notice in writing at its Corporate Trust Office to that
effect signed by an Officer of the Company or such Guarantor, or by a holder of
Guarantor Senior Indebtedness or trustee or agent therefor; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided, however, that
if the Trustee shall not have received the notice provided for in this Section
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12.06 at least two Business Days prior to the date upon which by the terms of
this Indenture any moneys shall become payable for any purpose (including,
without limitation, the payment of the principal of or interest on any
Security), then, regardless of anything herein to the contrary, the Trustee
shall have full power and authority to receive any moneys from any Guarantor
and to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on or
after such prior date. Nothing contained in this Section 12.05 shall limit the
right of the holders of Guarantor Senior Indebtedness to recover payments as
contemplated by Section 12.03. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself
to be a holder of any Guarantor Senior Indebtedness (or a trustee on behalf of,
or other representative of, such holder) to establish that such notice has been
given by a holder of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, 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 12.06. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Twelve, the Trustee and the Holders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, 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
distribution, the holders of Guarantor Senior Indebtedness of such Guarantor
and other indebtedness of such Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Twelve.
SECTION 12.07. Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior
Indebtedness which may at any time
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be held by it in its individual or any other capacity to the same extent as any
other holder of Guarantor Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee or any Paying Agent of any of its rights as such
holder.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no
implied covenants or obligations with respect to the holders of Guarantor
Senior Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness (except as provided in Section 12.02(b)). The
Trustee shall not be liable to any such holders if the Trustee shall in good
faith mistakenly pay over or distribute to Holders or to the Company or to any
other person cash, property or securities to which any holders of Guarantor
Senior Indebtedness shall be entitled by virtue of this Article Twelve or
otherwise.
SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with. The provisions of this Article Twelve are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Guarantor Senior Indebtedness.
SECTION 12.09. Holders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder by his acceptance of such Securities authorizes and
expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Twelve, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of any Guarantor (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
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SECTION 12.10. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Twelve shall not
be construed as preventing the occurrence of an Event of Default specified in
clauses (i) or (ii) of Section 6.01.
SECTION 12.11. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 12.12. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.08, the
holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders, without
incurring responsibility to the Holders and without impairing or releasing the
subordination provided in this Article Twelve or the obligations hereunder of
the Holders to the holders of Guarantor Senior Indebtedness, do any one or more
of the following: (a) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Guarantor Senior Indebtedness or any
instrument evidencing the same or any agreement under which Guarantor Senior
Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against any Guarantor and any other Person.
SECTION 12.13. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) a Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments,
or (ii) the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of and interest on the Securities,
to the holders entitled thereto unless at least two Business Days prior to the
date upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 12.06. The Guarantors shall
give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of such Guarantor.
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ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions. If any provision of this Indenture modifies any
TIA provision that may be so modified, such TIA provision shall be deemed to
apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company or to the Guarantors:
Carrols Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000 x000
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Trustee:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to a
Holder including any notice delivered in connection with TIA Section
310(b), TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall
be mailed to him at his address as set forth on the Security Register
and shall be sufficiently given to him if so mailed within the time
prescribed. To the extent required by the TIA, any notice or
communication shall also be mailed to any Person described in TIA
Section 313(c).
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee,
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which is deemed given only when received, if a notice or communication is
mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person
shall have the protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture 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, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to
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matters of fact an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
This Indenture, the Securities and the Security Guarantees shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the application of principles of conflicts of laws. Each of
the parties hereto and thereto 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, the Securities and the Security Guarantees.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, the Guarantee of such Guarantor
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
and such Guarantor's Guarantee shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Guarantee shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the re-
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maining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
Very truly yours,
CARROLS CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
CARROLS REALTY HOLDINGS CORP.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
CARROLS REALTY I CORP.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
S-2
CARROLS REALTY II CORP.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
XXXXXXX X.X. CORP.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
QUANTA ADVERTISING CORP.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary
and General Counsel
POLLO FRANCHISE, INC.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Secretary
S-3
POLLO OPERATIONS, INC.,
as Guarantor
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President and Secretary
S-4
IBJ XXXXXXXX BANK & TRUST
COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title:
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
CARROLS CORPORATION
9 1/2% Senior Subordinated Note
due December 1 , 2008, Series A
CUSIP No.:
No. $
CARROLS CORPORATION, a Delaware corporation (the "Company", which term
includes any successor corporation), for value received promises to pay to Cede
& Co. or registered assigns, the principal sum of , on December 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on June 1,
1999.
Interest Record Dates: May 15 and November 15.
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.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
CARROLS CORPORATION
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Dated:
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/2% Senior Subordinated Notes due December 1,
2008, Series A, described in the within-mentioned Indenture.
Dated:
IBJ XXXXXXXX BANK & TRUST
COMPANY, as Trustee
By:
----------------------------------
Name:
Title:
A-3
(Reverse of Security)
CARROLS CORPORATION
9 1/2% Senior Subordinated Note
due December 1, 2008, Series A
1. Interest.
CARROLS CORPORATION, a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. Cash interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
November 24, 1998. The Company will pay interest semi-annually in arrears on
each Interest Payment Date, commencing June 1, 1999. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of
business on the Interest Record Date immediately preceding the Interest Payment
Date even if the Securities are cancelled on registration of transfer or
registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
wire transfer of Federal funds (provided that the Paying Agent shall have
received wire instructions on or prior to the relevant Interest Record Date),
or interest by check payable in such U.S. Legal Tender. The Company may deliver
any such interest payment to the Paying Agent or to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar.
Initially, IBJ Xxxxxxxx Bank & Trust Company (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company or any of its Subsidiaries
may, subject to certain exceptions, act as Registrar.
A-4
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated as of
November 24, 1998 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. This Security is one
of a duly authorized issue of Securities of the Company designated as
its 9 1/2% Senior Subordinated Notes due 2008, Series A (the "Initial
Securities"), limited (except as otherwise provided in the Indenture) in
aggregate principal amount to $170,000,000, which may be issued under
the Indenture. The Securities include the Initial Securities, the
Private Exchange Securities (as defined in the Indenture) and the
Unrestricted Securities (as defined below) issued in exchange for the
Initial Securities pursuant to the Registration Rights Agreement. The
Initial Securities and the Unrestricted Securities are treated as a
single class of securities under the Indenture. The terms of the
Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the
Indenture (except as otherwise indicated in the Indenture) until such
time as the Indenture is qualified under the TIA, and thereafter as in
effect on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are
subject to all such terms, and holders of Securities are referred to the
Indenture and the TIA for a statement of them. The Securities are
general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all Senior Indebtedness of the
Company to the extent and in the manner provided in the Indenture. Each
Holder of a Security, by accepting a Security, agrees to such
subordination, authorizes the Trustee to give effect to such
subordination and appoints the Trustee as attorney-in-fact for such
purpose.
Payment on the Securities is guaranteed (each, a "Guarantee"), on a
senior subordinated basis, jointly and severally, by each Restricted Subsidiary
of the Company existing on the Issue Date (each, a "Guarantor") pursuant to
Article Eleven and Article Twelve of the Indenture. In addition, the Indenture
requires the Company to cause each Restricted Subsidiary formed, created or
acquired after the Issue Date to become a party to the Indenture as a Guarantor
and guarantee payment on the Securities pursuant to Article Eleven and Article
Twelve of the Indenture. In certain circumstances, the Guaranties may be
released.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option, in whole
or in part at any time, on and after December 1, 2003, upon not less than 30
nor more than 60 days' notice, at the following redemption prices (expressed as
percentages of the principal amount thereof) if redeemed during the
twelve-month period commencing on December 1 of the year set forth below, plus,
in each case, accrued and unpaid interest thereon, if any, to the date of
redemption:
A-5
Year Percentage
------------------- ----------
2003 104.750%
2004 103.167%
2005 101.583%
2006 and thereafter 100.000%
6. Optional Redemption upon Public Equity Offerings.
At any time, or from time to time, on or prior to December 1, 2001,
the Company may, at its option, use the net cash proceeds of one or more Public
Equity Offerings to redeem up to 35% of the principal amount of Securities
originally issued at a redemption price equal to 109.500% of the principal
amount thereof plus accrued and unpaid interest thereon, if any, to the date of
redemption (subject to the right of Holders of record on the relevant Interest
Record Date to receive interest due on the relevant Interest Payment Date);
provided that at least 65% of the principal amount of Securities originally
issued remain outstanding immediately after any such redemption (excluding any
Securities held by the Company or any of its Affiliates). In order to effect
the foregoing redemption with the proceeds of any Public Equity Offering, the
Company shall make such redemption not more than 90 days after the consummation
of any such Public Equity Offering.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities funds in satisfaction of the redemption price
pursuant to the Indenture and the Paying Agent is not prohibited from paying
such funds to the Holders pursuant to the terms of the Indenture.
A-6
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 60
days after the Change of Control Date, make a Change of Control Offer to
repurchase all Securities then outstanding at a repurchase price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Change of Control Payment Date (subject to the
right of Holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to make a Net
Proceeds Offer to repurchase Securities at a repurchase price equal to 100% of
the principal amount thereof, plus accrued and unpaid interest thereon, if any,
to the Net Proceeds Offer Date (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange 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 certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at its written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
A-7
13. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities and the
Guaranties may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guaranties to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities
in addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets, to engage in transactions with affiliates or certain other related
persons or to engage in certain businesses. The limitations are subject to a
number of important qualifications and exceptions. The Company must report
quarterly to the Trustee on compliance with such limitations.
16. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the Trustee or
the Holders of at least 25% in aggregate principal amount of outstanding
Securities may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders may not
enforce the Indenture, the Securities or the Guaranties except as provided in
the Indenture. The Trustee is not obligated to enforce the Indenture, the
Securities or the Guaranties unless it has received indemnity satisfactory to
it. The Indenture permits, subject to certain limitations therein provided,
Holders of a majority in aggregate princi-
A-8
pal amount of the Securities then outstanding to direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice of
certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as such,
of the Company or any Guarantor shall have any liability for any obligation of
the Company or any Guarantor under the Securities, the Guarantee of such
Guarantor or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and
the Guaranties.
19. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
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).
21. 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 as a convenience to the Holders. No representation is
made as to the accuracy of such numbers as printed on the Securities and
reliance may be placed only on the other identification numbers printed hereon.
22. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the
A-9
Holder of this Security shall have the right to exchange
this Security for a 9 1/2% Senior Subordinated Note due 2008, Series B, of the
Company (an "Unrestricted Security") which has been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects to this Security. The Holders shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement.
23. Governing Law.
The Indenture, this Security and any Guarantee thereof shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the application of principles of conflicts of laws. Each of
the parties hereto and thereto 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 the Indenture, this Security and any Guarantee thereof.
A-10
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in the Security
upon which this notation is endorsed) hereby unconditionally guarantees on a
senior subordinated basis (such guarantee by the Guarantor being referred to
herein as the "Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest on the Securities, 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 set forth in Article Eleven of
the Indenture.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to the Guarantee and the Indenture are expressly set forth, and are
expressly subordinated and subject in right of payment to the prior payment in
full of all Guarantor Senior Indebtedness (as defined in the Indenture) of such
Guarantor, to the extent and in the manner provided in Article Eleven and
Article Twelve of the Indenture, and reference is hereby made to such Indenture
for the precise terms of the Guarantee therein made.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Security Guarantee is subject to release upon the terms set forth
in the Indenture.
[Signature pages follow.]
-2-
CARROLS REALTY HOLDINGS CORP.,
as Guarantor
By:
----------------------------------
Name:
Title:
CARROLS REALTY I CORP.,
as Guarantor
By:
----------------------------------
Name:
Title:
CARROLS REALTY II CORP.,
as Guarantor
By:
----------------------------------
Name:
Title:
XXXXXXX X.X. CORP.,
as Guarantor
By:
----------------------------------
Name:
Title:
QUANTA ADVERTISING CORP.,
as Guarantor
By:
----------------------------------
Name:
Title:
-3-
POLLO FRANCHISE, INC.,
as Guarantor
By:
----------------------------------
Name:
Title:
POLLO OPERATIONS, INC.,
as Guarantor
By:
----------------------------------
Name:
Title:
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:____________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ______________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Security repurchased by the Company
pursuant to Section 4.06 or Section 4.10 of the Indenture, check the
appropriate box:
Section 4.06 [ ]
Section 4.10 [ ]
If you want to elect to have only part of this Security repurchased by
the Company pursuant to Section 4.06 or Section 4.10 of the Indenture, state
the amount: $_____________
Dated:___________________ Signed:___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ______________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
[FORM OF SERIES B SECURITY]
CARROLS CORPORATION
9 1/2% Senior Subordinated Note
due December 1, 2008, Series B
CUSIP No.
No. $
CARROLS CORPORATION, a Delaware corporation (the "Company",
which term includes any successor corporation), for value received promises to
pay to Cede & Co. or registered assigns, the principal sum of Dollars, on
December 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on
June 1, 1999.
Interest Record Dates: May 15 and November 15.
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.
IN WITNESS WHEREOF, the Company has caused this Security to
be signed manually or by facsimile by its duly authorized officer.
CARROLS CORPORATION
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
Dated:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 9 1/2% Senior Subordinated Notes due
December 1, 2008, Series B, described in the within-mentioned Indenture.
Dated:
IBJ XXXXXXXX BANK & TRUST
COMPANY, as Trustee
By:
-----------------------------------------
Name:
Title:
B-2
(Reverse of Security)
CARROLS CORPORATION
9 1/2% Senior Subordinated Note
due December 1, 2008, Series B
1. Interest.
CARROLS CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. Cash interest on the Securities will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from November 24, 1998. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing June 1, 1999. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal from
time to time on demand and on overdue installments of interest (without regard
to any applicable grace periods) to the extent lawful from time to time on
demand, in each case at the rate borne by the Securities
2. Method of Payment.
The Company shall pay interest on the Securities (except
defaulted interest) to the persons who are the registered Holders at the close
of business on the Interest Record Date immediately preceding the Interest
Payment Date even if the Securities are cancelled on registration of transfer
or registration of exchange after such Interest Record Date. Holders must
surrender Securities to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
wire transfer of Federal funds (provided that the Paying Agent shall have
received wire instructions on or prior to the relevant Interest Record Date),
or interest by check payable in such U.S. Legal Tender. The Company may
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar.
Initially, IBJ Xxxxxxxx Bank & Trust Company (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying
Agent or Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Registrar.
B-3
4. Indenture and Guarantees.
The Company issued the Securities under an Indenture, dated
as of November 24, 1998 (the "Indenture"), by and among the Company, the
Guarantors and the Trustee. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 9 1/2% Senior
Subordinated Notes due 2008, Series B (the "Unrestricted Securities"), limited
(except as otherwise provided in the Indenture) in aggregate principal amount
to $170,000,000, which may be issued under the Indenture. The Securities
include the 9 1/2% Senior Subordinated Notes due 2008, Series A (the "Initial
Securities"), the Private Exchange Securities (as defined in the Indenture)
and the Unrestricted Securities. The Initial Securities, the Private Exchange
Securities and the Unrestricted Securities are treated as a single class of
securities under the Indenture. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"),
as in effect on the date of the Indenture (except as otherwise indicated in
the Indenture) until such time as the Indenture is qualified under the TIA,
and thereafter as in effect on the date on which the Indenture is qualified
under the TIA. Notwithstanding anything to the contrary herein, the Securities
are subject to all such terms, and holders of Securities are referred to the
Indenture and the TIA for a statement of them. The Securities are general
unsecured obligations of the Company. The Securities are subordinated in right
of payment to all Senior Indebtedness of the Company to the extent and in the
manner provided in the Indenture. Each Holder of a Security, by accepting a
Security, agrees to such subordination, authorizes the Trustee to give effect
to such subordination and appoints the Trustee as attorney-in-fact for such
purpose.
Payment on the Securities is guaranteed (each, a
"Guarantee"), on a senior subordinated basis, jointly and severally, by each
Restricted Subsidiary of the Company existing on the Issue Date (each, a
"Guarantor") pursuant to Article Eleven and Article Twelve of the Indenture.
In addition, the Indenture requires the Company to cause each Restricted
Subsidiary formed, created or acquired after the Issue Date to become a party
to the Indenture as a Guarantor and guarantee payment on the Securities
pursuant to Article Eleven and Article Twelve of the Indenture. In certain
circumstances, the Guaranties may be released.
5. Optional Redemption.
The Securities will be redeemable, at the Company's option,
in whole or in part at any time, on and after December 1, 2003, upon not less
than 30 nor more than 60 days' notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period commencing on December 1 of the year
B-4
set forth below, plus, in each case, accrued and unpaid interest thereon, if
any, to the date of redemption:
Year Percentage
-------- ----------
2003 104.750%
2004 103.167%
2005 101.583%
2006 and thereafter 100.000%
6. Optional Redemption upon Public Equity Offerings.
At any time, or from time to time, on or prior to December
1, 2001, the Company may, at its option, use the net cash proceeds of one or
more Public Equity Offerings to redeem up to 35% of the principal amount of
Securities originally issued at a redemption price equal to 109.500% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the date of redemption (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant Interest
Payment Date); provided that at least 65% of the principal amount of
Securities originally issued remain outstanding immediately after any such
redemption (excluding any Securities held by the Company or any of its
Affiliates). In order to effect the foregoing redemption with the proceeds of
any Public Equity Offering, the Company shall make such redemption not more
than 90 days after the consummation of any such Public Equity Offering.
7. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at its registered address. The Trustee may
select for redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000
principal amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice
of redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the
Holder thereof upon cancellation of the original Security. On and after the
Redemption Date, interest will cease to accrue on Securities or portions
thereof called for redemption so long as the Company has deposited with the
Paying Agent for the Securities
B-5
funds in satisfaction of the redemption price pursuant to the Indenture and
the Paying Agent is not prohibited from paying such funds to the Holders
pursuant to the terms of the Indenture.
8. Change of Control Offer.
Following the occurrence of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the Company shall, within
60 days after the Change of Control Date, make a Change of Control Offer to
repurchase all Securities then outstanding at a repurchase price in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Change of Control Payment Date (subject to
the right of Holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date).
9. Limitation on Disposition of Assets.
The Company is, subject to certain conditions, obligated to
make a Net Proceeds Offer to repurchase Securities at a repurchase price equal
to 100% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the Net Proceeds Offer Date (subject to the right of
Holders of record on the relevant Interest Record Date to receive interest due
on the relevant Interest Payment Date) with the proceeds of certain asset
dispositions.
10. Denominations; Transfer; Exchange.
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange 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 certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except
the unredeemed portion of any security being redeemed in part.
11. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the
owner of it for all purposes.
B-6
12. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee and the Paying Agent will repay the funds
to the Company at its written request. After that, all liability of the
Trustee and such Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guaranties, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guaranties, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Securities
and the Guaranties may be amended or supplemented with the written consent of
the Holders of at least a majority in aggregate principal amount of the
Securities then outstanding, and any existing Default or Event of Default or
compliance with any provision may be waived with the consent of the Holders of
a majority in aggregate principal amount of the Securities then outstanding.
Without notice to or consent of any Holder, the parties thereto may amend or
supplement the Indenture, the Securities and the Guaranties to, among other
things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated
Securities or comply with any requirements of the SEC in connection with the
qualification of the Indenture under the TIA, or make any other change that
does not materially adversely affect the rights of any Holder of a Security.
15. Restrictive Covenants.
The Indenture contains certain covenants that, among other
things, limit the ability of the Company and the Restricted Subsidiaries to
make restricted payments, to incur indebtedness, to create liens, to sell
assets, to permit restrictions on dividends and other payments by Restricted
Subsidiaries to the Company, to consolidate, merge or sell all or
substantially all of its assets, to engage in transactions with affiliates or
certain other related persons or to engage in certain businesses. The
limitations are subject to a number of important qualifications and
exceptions. The Company must report quarterly to the Trustee on compliance
with such limitations.
B-7
16. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of
outstanding Securities may declare all the Securities to be due and payable
immediately in the manner and with the effect provided in the Indenture.
Holders may not enforce the Indenture, the Securities or the Guaranties except
as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guaranties unless it has received indemnity
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 notice of certain continuing
Defaults or Events of Default if it determines that withholding notice is in
their interest.
17. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company, its Subsidiaries or their respective
Affiliates as if it were not the Trustee.
18. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator,
as such, of the Company or any Guarantor shall have any liability for any
obligation of the Company or any Guarantor under the Securities, the Guarantee
of such Guarantor or the Indenture or for any claim based on, in respect of or
by reason of, such obligations or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and
the Guaranties.
19. Authentication.
This Security shall not be valid until the Trustee or
authenticating agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
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).
B-8
21. 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 as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
The Indenture, this Security and any Guarantee thereof shall
be governed by and construed in accordance with the laws of the State of New
York without regard to the application of principles of conflicts of laws.
Each of the parties hereto and thereto 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 the Indenture, this Security and any Guarantee thereof.
B-9
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in
the Security upon which this notation is endorsed) hereby unconditionally
guarantees on a senior subordinated basis (such guarantee by the Guarantor
being referred to herein as the "Guarantee") the due and punctual payment of
the principal of, premium, if any, and interest on the Securities, whether at
maturity, by acceleration or otherwise, the due and punctual payment of
interest on the overdue principal, premium and interest on the Securities, 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 set forth in
Article Eleven of the Indenture.
The obligations of the Guarantor to the Holders and to the
Trustee pursuant to the Guarantee and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article Eleven and Article Twelve of the Indenture, and reference is hereby
made to such Indenture for the precise terms of the Guarantee therein made.
This Security Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Securities upon
which this Security Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law.
This Security Guarantee is subject to release upon the terms
set forth in the Indenture.
[Signature pages follow]
CARROLS REALTY HOLDINGS CORP.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
CARROLS REALTY I CORP.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
CARROLS REALTY II CORP.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
XXXXXXX X.X. CORP.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
QUANTA ADVERTISING CORP.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
POLLO FRANCHISE, INC.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
POLLO OPERATIONS, INC.,
as Guarantor
By:
-----------------------------------------
Name:
Title:
ASSIGNMENT FORM
I or we assign and transfer this Security to
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type name, address and zip code of assignee or transferee)
_______________________________________________________________________________
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:__________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: _________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Security repurchased by
the Company pursuant to Section 4.06 or Section 4.10 of the Indenture, check
the appropriate box:
Section 4.06 [ ]
Section 4.10 [ ]
If you want to elect to have only part of this Security
repurchased by the Company pursuant to Section 4.06 or Section 4.10 of the
Indenture, state the amount: $_____________
Dated:___________________ Signed:__________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: __________________________________________
Participant in a recognized Signature
Guarantee Medallion Program (or other
signature guarantor program reasonably
acceptable to the Trustee)
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder
shall bear a legend (which would be in addition to any other legends required
in the case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.
C-1
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 9 1/2% Senior Subordinated Notes due 2008
(the "Securities"), of Carrols Corporation
This Certificate relates to $_______ principal amount of
Securities held in the form of* ___ a beneficial interest in a Global Security
or* _______ Physical Securities by ______ (the "Transferor").
The Transferor:*
/ / has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive,
registered form of authorized denominations and an aggregate number equal to
its beneficial interest in such Global Security (or the portion thereof
indicated above); or
/ / has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such
Security, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Securities and the
restrictions on transfers thereof as provided in Section 2.16 of such
Indenture, and that the transfer of the Securities does not require
Registration under the Securities Act of 1933, as amended (the "Act"),
because*:
/ / Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
/ / Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
/ / Such Security is being transferred to an institutional
"accredited investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
/ / Such Security is being transferred in reliance on Rule 144 under
the Act.
/ / Such Security is being transferred in reliance on and in
compliance with an exemption from the Registration requirements of the Act
other than Rule 144A or Rule 144 under the Act to a person other than an
institutional "accredited investor." An Opinion of
D-1
Counsel to the effect that such transfer does not require
Registration under the Securities Act accompanies this certification.
_______________________________
[INSERT NAME OF TRANSFEROR]
By: ___________________________
[Authorized Signatory]
Date: ______________
*Check applicable box.
D-2
EXHIBIT E
Form of Transferee Letter of Representation
CARROLS CORPORATION
c/o IBJ XXXXXXXX BANK & TRUST COMPANY
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$________ principal amount of the 9 1/2% Senior Subordinated Notes due 2008
(the "Notes") of CARROLS CORPORATION (the "Company"). Upon transfer, the Notes
would be registered in the name of the new beneficial owner as follows:
Name:________________________________
Address:_____________________________
Taxpayer ID Number:__________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
"Securities Act")) purchasing for our own account or for the account of such
an institutional "accredited investor" at least $250,000 principal amount of
the Notes, and we are acquiring the Notes not with a view to, or for offer or
sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risk of our investment in the Notes
and we invest in or purchase securities similar to the Notes in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Notes have not been registered
under the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registra-
E-1
tion statement which has been declared effective under the Securities Act, (c)
in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made
in reliance on Rule 144A, (d) pursuant to offers and sales that occur outside
the United States within the meaning of Regulation S under the Securities Act,
(e) to an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its
own account or for the account of such an institutional "accredited investor,"
in each case in a minimum principal amount of Notes of $250,000, or (f)
pursuant to any other available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed to
be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to the Company and the Trustee, which
shall provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act and that it is acquiring such Notes for investment
purposes and not for distribution in violation of the Securities Act. Each
purchaser acknowledges that the Company and the Trustee reserve the right
prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Notes pursuant to clause (d), (e) or (f) above to
require the delivery of an opinion of counsel, certificates and/or other
information satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE:______________________________
By:______________________________________
E-2
EXHIBIT F
Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
________________, _____
CARROLS CORPORATION
c/o IBJ XXXXXXXX BANK & TRUST COMPANY
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: CARROLS CORPORATION (the "Company")
9 1/2% Senior Subordinated Notes due 2008 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $____________
aggregate principal amount of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
we represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting
on our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through
the facilities of a designated off-shore securities market and
neither we nor any person acting on our behalf knows that the
transaction has been prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Company are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby. Defined terms used herein
without definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: _______________________________
[Authorized Signatory]
F-2
