EXHIBIT T3C
SLM INTERNATIONAL, INC.,
as Issuer,
THE GUARANTORS NAMED HEREIN,
as Guarantors,
and
THE BANK OF NEW YORK,
as Trustee
---------------------------
SENIOR SECURED NOTE
INDENTURE
Dated as of March __, 1997
$----------------------
14% Senior Secured Notes due April 0, 0000
XXX INTERNATIONAL, INC.
================================================================================
Reconciliation and tie between Trust Indenture Act of 1939, as in effect at the
date hereof, and Indenture dated as of March __, 1997.
Section of Trust Indenture Act Section of Indenture
------------------------------ --------------------
310(a)(1) and (2)..............................................608
310(a)(3)......................................................613
310(a)(4)......................................................Inapplicable
310(a)(5)......................................................608
310(b).........................................................608, 609
311(a).........................................................612
311(b).........................................................612
311(b)(2)......................................................612, 703(a)
311(c).........................................................Inapplicable
312(a).........................................................701, 702(a)
312(b).........................................................702(b), 702(c)
312(c).........................................................702(c)
313(a).........................................................703(a)
313(b).........................................................Inapplicable
313(c).........................................................703(a)
313(d).........................................................703(b)
314(a).........................................................411
314(b).........................................................1104
314(c)(1) and (2)..............................................102
314(c)(3)......................................................Inapplicable
314(d).........................................................1104
314(e).........................................................102
315(a).........................................................601(a), 601(c)
315(b).........................................................Inapplicable
315(c).........................................................601(b)
315(d).........................................................601(c)
315(d)(1)......................................................601(a), 601(c)(1)
315(d)(2)......................................................601(c)(2)
315(d)(3).......................................................601(c)(3)
315(e).........................................................514
316(a).........................................................101
316(a)(1)(A)...................................................512
316(a)(1)(B)...................................................513
316(a)(2)......................................................Inapplicable
316(b).........................................................508
316(c).........................................................307
317(a)(1)......................................................503
317(a)(2)......................................................504
317(b).........................................................403
318(a).........................................................107
================================================================================
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
part of this Indenture.
SLM INTERNATIONAL, INC.
SENIOR SECURED NOTE INDENTURE
TABLE OF CONTENTS*
PAGE
----
PRELIMINARY STATEMENT
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions............................................. 2
Section 102. Compliance Certificates and Opinions.................... 15
Section 103. Form of Documents Delivered to Trustee.................. 16
Section 104. Acts of Holders......................................... 16
Section 105. Notices to Trustee and Company.......................... 17
Section 106. Notice to Holders; Waiver............................... 17
Section 107. Conflict with Trust Indenture Act....................... 18
Section 108. Effect of Headings and Table of Contents................ 18
Section 109. Successors and Assigns.................................. 18
Section 110. Separability Clause..................................... 18
Section 111. Benefits of Indenture................................... 18
Section 112. Governing Laws.......................................... 19
Section 113. Legal Holidays.......................................... 19
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally......................................... 19
Section 202. Forms of Securities and Certificate of Authentication... 19
ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms......................................... 20
Section 302. Denominations........................................... 21
Section 303. Execution, Authentication, Delivery and Dating.......... 21
Section 304. Registration, Registration of Transfer and Exchange..... 22
Section 305. Mutilated, Destroyed, Lost and Stolen Securities........ 23
Section 306. Persons Deemed Owners....,.............................. 24
--------
*This Table of Contents shall not, for any purpose, be deemed to be a part of
this Indenture.
ii
Section 307. Payment of Principal and Interest; Preservation of
Rights................................................. 24
Section 308. Cancellation........................................... 27
Section 309. Computation of Interest................................ 27
ARTICLE FOUR
COVENANTS
Section 401. Payment of Principal and Interest...................... 27
Section 402. Maintenance of Office or Agency........................ 27
Section 403. Money for Security Payments to be Held in Trust........ 27
Section 404. Maintenance of Existence; Compliance with Laws......... 28
Section 405. Payment of Taxes and Other Claims...................... 29
Section 406. Limitation on Indebtedness............................. 29
Section 407. Limitation on Restricted Junior Payments............... 30
Section 408. Limitation on Restrictions Affecting Subsidiaries...... 30
Section 409. Guaranty and Security Agreements....................... 30
Section 410. Execution of Guaranty by Subsidiaries.................. 30
Section 411. Financial Statements and Other Reports................. 30
Section 412. Limitation on Liens; Negative Pledge................... 32
Section 413. Restrictions on Acquisition of Subsidiaries............ 34
Section 414. Inspection............................................. 34
Section 415. Maintenance of Properties and Insurance................ 35
Section 416. Transactions with Affiliates........................... 35
Section 417. Financial Covenants.................................... 35
Section 418. Waiver of Stay, Extension or Usury Laws................ 35
Section 419. Limitation on Investments, Loans and Advances.......... 36
Section 420. Limitation on Consolidated Capital Expenditures........ 36
Section 421. Companies May Consolidate, etc., Only on Certain Terms. 36
Section 422. Conduct of Business.................................... 37
Section 423. Asset Sales............................................ 37
Section 424. Mandatory Redemption Upon Sale of Equity............... 41
Section 425. Mandatory Redemption Upon Change of Control............ 43
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 501. Events of Default...................................... 45
Section 502. Acceleration of Maturity; Rescission and Annulment..... 48
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee................................................ 49
Section 504. Trustee May File Proofs of Claim....................... 50
Section 505. Trustee May Enforce Claims Without Possession of
Securities............................................. 50
Section 506. Application of Money Collected......................... 51
Section 507. Limitation on Suits.................................... 51
iii
Section 508. Unconditional Right of Holders to Receive Principal and
Interest............................................... 52
Section 509. Restoration of Rights and Remedies..................... 52
Section 510. Rights and Remedies Cumulative......................... 53
Section 511. Delay or Omission Not Waiver........................... 53
Section 512. Control by Holders..................................... 53
Section 513. Waiver of Past Defaults................................ 53
Section 514. Undertaking for Costs.................................. 54
Section 515. Remedies............................................... 54
Section 516. Action on Securities................................... 55
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.................... 55
Section 602. Notice of Defaults..................................... 56
Section 603. Certain Rights of Trustee.............................. 57
Section 604. Not Responsible for Recitals or Issuance of Securities. 58
Section 605. May Hold Securities.................................... 58
Section 606. Money Held in Trust.................................... 58
Section 607. Compensation and Reimbursement......................... 58
Section 608. Eligibility; Disqualification.......................... 59
Section 609. Resignation and Removal; Appointment of Successor...... 59
Section 610. Acceptance of Appointment by Successor................. 60
Section 611. Merger, Conversion, Consolidation or Succession to
Business............................................... 60
Section 612. Preferential Collection of Claims Against Company...... 61
Section 613. Co-Trustees and Separate Trustee....................... 61
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 701. Company to Furnish Trustee Names and Addresses of
Holders................................................ 63
Section 702. Preservation of Information; Communications to Holders. 63
Section 703. Reports by Trustee..................................... 64
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures without Consent of Holders..... 65
Section 802. Supplemental Indentures with Consent of Holders........ 66
Section 803. Execution of Supplemental Indentures................... 67
Section 804. Effect of Supplemental Indentures...................... 67
Section 805. Conformity with Trust Indenture Act.................... 68
Section 806. Reference in Securities to Supplemental Indentures..... 68
iv
ARTICLE NINE
REDEMPTION OF SECURITIES
Section 901. Voluntary Redemption................................... 68
Section 902. Applicability of Article............................... 68
Section 903. Election to Redeem; Notice to Trustee.................. 68
Section 904. Selection by Trustee of Securities to be Redeemed...... 69
Section 905. Notice of Redemption................................... 69
Section 906. Deposit of Redemption Price............................ 70
Section 907. Securities Payable on Redemption Date.................. 70
Section 908. Securities Redeemed in Part............................ 70
ARTICLE TEN
GUARANTY OF SECURITIES
Section 1001. Guaranty............................................... 70
Section 1002. Obligations Joint and Several.......................... 71
Section 1003. Validity Subject to Authentication..................... 71
Section 1004. Guaranties Not Fraudulent Transfers or Conveyances..... 72
Section 1005. Obligations of the Guarantors Unconditional............ 72
Section 1006. Release of a Guarantor................................. 72
Section 1007. Execution of Guaranties................................ 73
Section 1008. Guarantors May Consolidate, Etc., on Certain Terms..... 73
Section 1009. Contribution........................................... 73
Section 1010. Subrogation Rights of the Guarantors................... 73
ARTICLE ELEVEN
COLLATERAL AND SECURITY AGREEMENTS
Section 1101. Collateral Documents................................... 74
Section 1102. Recording and Opinions................................. 74
Section 1103. Release of Collateral.................................. 75
Section 1104. Certificates of the Issuer............................. 76
Section 1105. Authorization of Actions to be Taken by
the Trustee Under the Collateral Documents............. 76
Section 1106. Authorization of Receipt of Funds by the
Trustee Under the Collateral Documents
and the Intercreditor Agreement........................ 76
SIGNATURES
EXHIBIT A Form of Senior Secured Note Due April 1, 2004
v
This SENIOR SECURED NOTE INDENTURE (this "Indenture"), dated as of March
__, 1997, between SLM International, Inc., a Delaware corporation (the
"Company"), as Issuer, Sport Maska Inc., Maska U.S., Inc., #1 Apparel, Inc., #1
Apparel Canada Inc., St. Xxxxxxxx Manufacturing Canada Inc., SLM Trademark
Acquisition, Inc. and SLM Trademark Acquisition Canada Corporation (each a
"Guarantor" and collectively, the "Guarantors"), and, The Bank of New York, a
banking corporation organized and existing under the laws of the State of New
York, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Company has duly authorized the creation of an issue of its Senior
Secured Notes (as hereinafter defined) of substantially the tenor and amount
hereinafter set forth, and to provide therefor, the Company has duly authorized
the execution and delivery of this Indenture. All things necessary have been
done to make the Securities (as hereinafter defined), when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company and to make this Indenture a valid
agreement of the Company, in accordance with their and its terms. All covenants
and agreements made by the Company herein are for the equal and proportionate
benefit and security of the Holders (as hereinafter defined) of Securities. The
Company is entering into this Indenture and the Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
The Company has simultaneously herewith granted to the Trustee, for the
benefit of the Holders, a security interest in and lien upon all of the
Company's property (real, personal and mixed), as more fully described in the
Collateral Documents (as hereinafter defined).
Also in connection herewith, each of the Guarantors has authorized the
execution and delivery of a guaranty of all of the Company's obligations
evidenced by the Securities and due and owing pursuant hereto, which guaranty is
set forth in Article Ten of this Indenture. In order to secure its obligations
under such guaranty, each Guarantor has granted to the Trustee, for the benefit
of the Holders, a security interest in and lien upon all of its property (real,
personal and mixed), all as more fully described in the Collateral Documents.
The security interests in and liens upon the Collateral granted to the
Trustee, for the benefit of the Holders, are junior to the liens upon the
Collateral granted to the Agent (as hereinafter defined) in connection with the
Credit Facility Indebtedness (as hereinafter defined) and are subject to the
terms and conditions of the Intercreditor Agreement (as hereinafter defined).
1
The Securities issued by the Company pursuant hereto will be distributed to
the Lender Agent (as defined in the Reorganization Plan) for distribution by the
Lender Agent to the initial Holders as a partial repayment of the Company's
obligations to the Holders under the Credit Agreement (as defined in the
Reorganization Plan).
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) except as otherwise expressly provided in this Indenture, all
accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP; financial statements and other
financial information required to be delivered by the Company to the
Trustee and the Holders pursuant to this Indenture shall be prepared in
accordance with GAAP as in effect at the time of such preparation; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Articles Three, Four and Six, are
defined in those Articles.
"Act" when used with respect to any Holder has the meaning specified in
Section 104(a).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
2
"Agent" means The Chase Manhattan Bank, as Agent for the lenders under the
Credit Agreement, dated as of March __, 1997, among the Company and certain of
its Subsidiaries, as borrowers, the Lenders referred to therein and The Chase
Manhattan Bank, as agent or any successor agent appointed thereunder, or the
agent or representative of the lenders under any other Credit Agreement.
"Aggregate Outstanding Amount" means the aggregate principal amount of all
the Securities Outstanding at the date of determination.
"Asset Sale" means the sale, lease, assignment or other transfer for value
by the Company or any of its Subsidiaries to any Person other than the Company
or any of its direct or indirect wholly-owned Subsidiaries who are Guarantors
hereunder, whether in a single transaction or a series of related transactions,
of (a) any securities issued by the Company's Subsidiaries, (b) all or
substantially all of (i) the assets of the Company or any of its Subsidiaries,
or (ii) any division or line of business of the Company or any of its
Subsidiaries, or (c) any other assets of the Company or any of its Subsidiaries
outside the ordinary course of business of the Company or such Subsidiary, as
the case may be.
"Asset Sale Redemption" shall have the meaning set forth in Section 423
hereof.
"Asset Sale Redemption Date" means the date on which the Company shall
redeem all or a portion of the Securities pursuant to an Asset Sale Redemption,
which date shall be no later than one hundred eighty (180) days after the date
on which the Asset Sale giving rise to such Asset Sale Redemption shall have
occurred.
"Asset Sale Redemption Proceeds" means, in the case of any Asset Sale, the
Net Cash Proceeds of Asset Sale minus the amount of such Proceeds applied
pursuant to Sections 423(a) and 423(b)(i) hereof.
"Authorized Officer" means, (i) with respect to the Company or any
Subsidiary, any president, vice president, secretary, treasurer, chief financial
officer, controller, assistant vice president, assistant secretary or assistant
treasurer of the Company or such Subsidiary, as the case may be, and (ii) with
respect to the Trustee or any other bank or trust company acting as trustee of
an express trust or as custodian, a Responsible Officer.
"Authorized Newspapers" means, collectively (i) with respect to the United
States, the national edition of the New York Times or the Wall Street Journal,
or any other newspaper of general circulation, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays, and (ii) with respect to Canada, any newspaper
of general circulation, printed in the English language and customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays.
"Available Redemption Proceeds" means the aggregate amount of (i) Asset
Sale Redemption Proceeds and (ii) Stock Sale Redemption Proceeds.
3
"Bankruptcy Default" means any default under Section 501(e) or (f).
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in New York or the city in
which the Corporate Trust Office is located are authorized or obligated by law
or executive order to close.
"Canadian Guarantors" means, collectively, Sport Xxxxx Xxx., #0 Xxxxxxx
Xxxxxx Inc., St. Xxxxxxxx Manufacturing Canada Inc., SLM Trademark Acquisition
Canada Corporation, and any other Person who may hereafter become a Subsidiary
of the Company and whose internal affairs are governed by the laws of Canada.
"Capital Lease," as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee which would, in
conformity with GAAP, be accounted for as a capital lease on the balance sheet
of that Person.
"Canadian Security Documents" means (i) in the case of #1 Apparel Canada
Inc. and of any other Canadian Guarantor (other than a Canadian Guarantor
referred to in clause (ii) hereof), a security interest and mortgage in favor of
the Trustee upon the Guarantor Collateral, present and future, belonging to it;
and (ii) in the case of a Canadian Guarantor having its head office or having
assets located in the province of Quebec: (a) a pledge of _____ million Canadian
dollars ($_________ Cdn) of bonds issued by each such Canadian Guarantor to be
held by the Trustee; and (b) a hypothec upon the Guarantor Collateral, present
and future, belonging to such Guarantor, for a stated amount of __________
Canadian dollars ($_________ Cdn.), in favor of an agent (a "Fonde de Pouvoir"
under the Civil Code of Quebec) the choice of whom shall be approved by the
Trustee, located in the Province of Quebec and securing the payment of said
bonds.
"Cash Equivalents" means (i) certificates of deposit in dollars of any
commercial banks registered to do business in any state of the United States (a)
having capital and surplus in excess of $250,000,000 and (b) whose long-term
debt rating is at least investment grade as determined by either Standard &
Poor's Rating Group or Xxxxx'x Investors Service, Inc. and certificates of
deposit in dollars offered by money market mutual funds meeting the criteria in
clause (iii) below; (ii) readily marketable direct obligations of the United
States government or any agency thereof which are backed by the full faith and
credit of the United States; (iii) investments in money market mutual funds
having assets in excess of $2,000,000,000; (iv) commercial paper at the time of
acquisition having the highest rating obtainable from either Standard & Poor's
Ratings Group or Xxxxx'x Investors Service, Inc.; and (v) federally tax exempt
securities rated A or better by either Standard & Poor's Ratings Group or
Xxxxx'x Investors Service, Inc.
"Change of Control" shall mean (i) Wellspring Associates L.L.C. and its
Affiliates shall cease to maintain [the number of seats on the Board of
Directors of the Company to which Wellspring Associates L.L.C. and/or its
Affiliates is entitled pursuant to the Shareholders' Agreement in effect on the
date hereof] or (ii) from and after an initial public offering Wellsprings
Associates L.L.C. and/or its Affiliates shall cease to own stock
4
of the Company representing at least 20% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Company. ["Voting
power" as used herein shall mean direct voting power, or the ability to vote by
virtue of contract, voting trust or other agreements.]
"Change of Control Redemption" shall have the meaning set forth in Section
425 hereof.
"Change of Control Redemption Date" shall have the meaning set forth in
Section 425 hereof.
"Closing Date" means the date of the initial issuance of the Securities.
"Code" shall mean the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended from time to time.
"Collateral" means, collectively, the Company Collateral and the Guarantor
Collateral of all Guarantors.
"Collateral Documents" means the Canadian Security Documents, the Pledge
Agreement, the Security Agreement, the Security Agreement--Patents and
Trademarks, the Mortgages and each other agreement now existing or hereafter
created providing collateral security for the payment or performance of any of
the obligations under the Securities and this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing or performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument, until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Collateral" means all of the property (real, personal and mixed)
of the Company securing the obligations owing under this Indenture and the
Securities.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by two Authorized Officers of the Company.
"Compliance Certificate" means a certificate executed by two Authorized
Officers of the Company who are authorized to certify as to the matters
contained in such certificate.
"Consolidated Capital Expenditures" means, for any period, without
duplication, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities
5
and including that portion of Capital Leases capitalized on the consolidated
balance sheet of the Company and its Subsidiaries, but excluding (i) the
interest portion of Capitalized Leases to the extent not required to be
capitalized and (ii) expenditures made in connection with the replacement,
substitution or restoration of assets to the extent financed (a) from insurance
proceeds received from third party insurers paid on account of the loss of or
damage to the assets being replaced or restored, (b) with awards of compensation
arising from the taking by eminent domain or condemnation of the assets being
replaced [or (c) from the Net Cash Proceeds of Asset Sale up to an aggregate
amount not to exceed $______ during any fiscal year of the Company]) by the
Company and its Subsidiaries during the relevant period that, in conformity with
GAAP, should be included in property, plant or equipment reflected in the
consolidated balance sheet of the Company and its Subsidiaries.
"Consolidated Cash Interest Expense" means that portion of the Consolidated
Interest Expense paid by the Company or any Subsidiary in cash during the
relevant period.
"Consolidated EBITDA" means, for any period, the sum (without duplication)
of (i) Consolidated Net Income plus (ii) Consolidated Interest Expense plus
(iii) provisions for taxes based on income plus (iv) to the extent Consolidated
Net Income has been reduced thereby, amortization expense, depreciation expense
and other non-cash expenses plus (v) other non-cash items reducing Consolidated
Net Income, minus other non-cash items increasing Consolidated Net Income, all
as determined on a consolidated basis for the Company and its Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
interest expense of the Company and its Subsidiaries during the relevant period
that, in conformity with GAAP, should be included as interest expense reflected
in the consolidated financial statements of the Company and its Subsidiaries.
"Consolidated Net Income" means, for any period, the net income (or loss)
determined in conformity with GAAP of the Company and its Subsidiaries on a
consolidated basis, consolidated in conformity with GAAP for such period taken
as a single accounting period; provided that there shall be excluded (i) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of the Company or is merged into or consolidated with the Company or any of its
Subsidiaries or that Person's assets are acquired by the Company or any of its
Subsidiaries, (ii) the income (or loss) related to (x) any merger,
consolidation, liquidation, winding up or dissolving of the Company or any of
its Subsidiaries or (y) any conveyance, sale, lease, sub-lease, transfer or
other disposition of all or any substantial part of the Company's or any
Subsidiary's business or rights related thereto, property (whether leased or
owned in fee) or fixed assets outside the ordinary course of business, and (iii)
the income of any Subsidiary of the Company to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of that
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
6
"Consolidated Net Worth" shall mean the aggregate amount of stockholders'
equity (including without limitation any part of stockholders' equity
attributable to preferred stock) of the Company and its Subsidiaries determined
on a consolidated basis in accordance with GAAP.
"Contingent Obligation," as applied to any Person, means any direct or
indirect obligation, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other monetary obligation of
another Person, including, without limitation, any such obligation directly or
indirectly guarantied, endorsed (otherwise than for collection or deposit in the
ordinary course of business), co-made or sold on a recourse basis by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable, including, without limitation, any such obligation for which that Person
is in effect liable through any agreement (contingent or otherwise) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation, (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise),
or to maintain the solvency or any balance sheet item, level of income or other
financial condition of the obligor of such obligation, or to make payment for
any products, materials or supplies or for any transportation, services or lease
regardless of the non-delivery or non-furnishing thereof, or to provide
collateral to secure payment of such obligation, in any such case if the purpose
or intent of such agreement is to provide assurance that such obligation will be
paid or discharged or that the holders of such obligation will be protected (in
whole or in part) against any monetary loss in respect thereof. The amount of
any Contingent Obligation shall be equal to the lower of (i) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is incurred and (ii) the maximum amount for which the
Person incurring the Contingent Obligation may be liable pursuant to the terms
of the instrument embodying such Contingent Obligation, unless such primary
obligation and the maximum amount for which such Person may be liable are not
stated or determinable, in which case the amount of such Contingent Obligation
shall be such Person's maximum reasonably anticipated liability in respect
thereof.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of execution of this Indenture is located at
__________, New York, New York __________, Attention: __________________.
"Credit Agreement" means that certain Credit Agreement, dated as of March
__, 1997, among the Company and certain of its Subsidiaries, as borrowers, the
Lenders referred to therein and The Chase Manhattan Bank, as agent, as such
Credit Agreement may be amended, supplemented or otherwise modified from time to
time in accordance with its terms, and any renewals, extensions, refundings,
replacements or refinancings thereof, to the extent the indebtedness provided
thereunder complies with the terms of the proviso set forth in the definition of
"Credit Facility Indebtedness."
"Credit Facility Indebtedness" means (i) the principal of, and interest on,
all unreimbursed drawings under letters of credit issued or amended (or deemed
issued or
7
amended), and other extensions of credit, under the Credit Agreement and all
commitment, commission, facility and other fees payable under the Credit
Agreement and all expenses, reimbursements, indemnities and other amounts
payable by the Company or any other obligor under the Credit Agreement and the
commitment letter relating thereto, and (ii) any refundings, replacements,
refinancings, renewals or extensions of any indebtedness or other obligation
described in clause (i) above; provided that any such refundings, replacements,
refinancings, renewals or extensions shall be based on commercially reasonably
terms and conditions and the maximum amount of indebtedness thereunder shall be
limited to a percentage determined in accordance with customary and accepted
commercial lending practices, but in no event greater than 85% of the aggregate
net book value of the current assets of the Company and its Subsidiaries, as
determined in accordance with GAAP.
"Defaulted Interest" has the meaning specified in Section 307(e).
"Depository Institution" means a depository institution as that term is
defined at 12 U.S.C. ss. 461(b)(1)(A), as amended, or any successor provision.
"Environmental Laws" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Oil Pollution Act of
1990 (33 U.S.C. ss. 2701 et seq.), the Safe Drinking Water Act (42 U.S.C. ss.
300f et seq.), the Clear Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. ss. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss. 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), their Canadian
equivalent, including, without limitation, the Environmental Protection Act of
Ontario, the Canadian Environmental Protection Act and the Canadian
Transportation of Dangerous Goods Act, as such laws have been and hereafter may
be amended or supplemented, and any related or analogous present or future
Federal, state or local, statutes, rules having the force of law, regulations,
ordinances, licenses, permits and interpretations having the force of law and
orders of regulatory and administrative bodies.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate," as applied to any Person, means (i) any corporation that
is, or was at any time, a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that person
is, or was at any time, a member, (ii) any trade or business (whether or not
incorporated) that is, or was at any time, a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time, a member, and
(iii) any member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is, or was at any time, a member.
8
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute and the rules and regulations
promulgated thereunder.
"FASB" means Statements of the Financial Accounting Standards Board.
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Guarantor Collateral" means, with respect to each Guarantor, all of the
property (real, personal and mixed) of such Guarantor securing the obligations
of such Guarantor under this Indenture, the Securities, and the Collateral
Documents.
"Guarantors" means the Persons named as the "Guarantors" in the first
paragraph of this instrument and all other Persons who may hereafter become
Guarantors in accordance with the provisions hereof.
"Guaranty" means, with respect to each Guarantor, the guaranty provided by
such Guarantor pursuant to Article Ten of this Indenture.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" with respect to any Person, without duplication (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest charges
are customarily paid (excluding trade accounts payable and accrued expenses
arising in the ordinary course of business in accordance with customary trade
terms), (c) all obligations of such Person for the deferred purchase price of
property or services (excluding trade accounts payable and accrued expenses
arising in the ordinary course of business in accordance with customary trade
terms), (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person and that
portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity with GAAP, (e) all
payment obligations of such Person with respect to interest rate or currency
protection agreements, (f) all obligations of such Person as an account party
under any letter of credit or in respect of bankers' acceptances, (g) all
indebtedness of any third party secured by property or assets of such Person
(regardless of whether or not such Person is liable for repayment of such
indebtedness provided, however, that the amount of indebtedness of such Person
shall be the lesser of (i) the fair market value of such property
9
or assets and (ii) the amount of such Indebtedness), (h) all Contingent
Obligations of such Person and (i) the redemption price of all redeemable
preferred stock of such Person, but only to the extent that such stock is
redeemable at the option of the holder or requires sinking fund or similar
payments at any time prior to the payment in full of all principal and interest
under the Securities.
"Indenture" means this instrument as originally executed and as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Intercreditor Agreement" means that certain Inter-Creditor Agreement,
dated as of March __, 1997, between and among Agent and the Trustee.
"Interest Accrual Period" means with respect to any Interest Payment Date,
the period commencing on the immediately preceding Interest Payment Date (or
commencing on the Closing Date in the case of the first Interest Payment Date)
and ending on the day immediately preceding such Interest Payment Date.
"Interest Payment Date" means April 1 and October 1, as the case may be, of
each year, commencing on the first such date to occur which is at least ninety
days after the Closing Date.
"Interest Rate" means the annual rate at which interest accrues on the
Securities, as specified in Section 301 and in the terms of the Senior Secured
Notes.
"Lien" means with respect to any asset, (i) any mortgage, hypothec, lien,
pledge, encumbrance, charge or security interest in or on such asset, (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset, (iii) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities or (iv) any other right of or arrangement with
any creditor to have such creditor's claim satisfied out of such assets, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries taken as a whole, or (ii) the
impairment of the ability of the Company to perform, or of the Trustee or the
Holders to enforce, the obligations represented by this Indenture and the
Securities.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether pursuant to Section 307, at the Stated Maturity thereof or by
declaration of acceleration, call for redemption or otherwise.
10
"Mortgages" means the real property mortgages dated as of the date hereof
and executed by the Company or a Guarantor (as the case may be) in favor of the
Trustee, for the benefit of the Holders, as amended, modified or supplemented
from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is maintained for employees of the Company or any
ERISA Affiliate of the Company.
"Net Cash Proceeds of Asset Sale" means, in the case of any Asset Sale, the
sum of (a) the gross cash proceeds received from such Asset Sale plus (b)
without duplication, all cash proceeds as and when received subsequent to such
Asset Sale representing any deferred portion of the purchase price, less (c) the
sum of (i) the amount, if any, of all taxes (other than income taxes) payable
plus the good-faith best estimate of the amount of all income taxes payable (to
the extent such amount shall have been set aside) in connection with the
applicable transaction, (ii) the amount, if any, applied to repay any
Indebtedness (other than the Credit Facility Indebtedness or Indebtedness in
respect of the Senior Secured Notes) including, without limitation, any premium,
penalty, interest or other amount in connection with such Indebtedness to the
extent such Indebtedness is required by its terms or by applicable law to be
repaid, (iii) reasonable and customary fees, commissions and expenses and other
costs paid (other than those paid to any Affiliate of the Company) in connection
with the applicable transaction and (iv) reserves and escrows, if any, in
connection with indemnification or similar obligations, in each case to the
extent not already deducted in arriving at the amount referred to in clause (a)
or (b), all as reflected in an Officers' Certificate delivered to the Trustee.
"Notice of Election" shall have the meaning set forth in Section 423
hereof.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Authorized Officers.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation; and
(b) Securities, or portions thereof, for whose redemption money in the
necessary amount has been theretofore irrevocably deposited with the
Trustee or any Paying Agent in trust for the Holders of such Securities;
provided that notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
11
(c) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Securities are
held by a bona fide purchaser in whose hands the Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee that (i) the pledgee has a right to so act with respect to such
Securities, (ii) the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor, and (iii) the
pledge is permitted hereunder.
"Paying Agent" means any Person (other than the Company or any Affiliate or
Subsidiary of the Company) authorized by the Company to pay the principal of or
interest on any Securities on behalf of the Company.
"Payment Default" means any default under Section 501(a).
"Pension Plan" means any employee plan which is subject to the provisions
of Title IV of ERISA and which is maintained for employees of the Company or any
ERISA Affiliate of the Company, other than a Multiemployer Plan.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Personal Property Security Law" shall mean the Personal Property Security
Act or other statue or statutory provisions in effect from time to time in
Canada and its provinces which deals with the perfection and priority of Liens
on Collateral.
"Pledge Agreements" means that certain Pledge Agreement, dated as of the
date hereof, between the Company and each Guarantor and the Trustee, for the
benefit of the Holders, as amended, modified or supplemented from time to time.
"Potential Event of Default" means a condition or event which, after notice
or lapse of time or both, would constitute an Event of Default if that condition
or event were not cured or removed within any applicable grace or cure period.
12
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 305 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Money Indebtedness" means purchase money obligations to finance,
refinance or refund the cost (including the cost of construction) of real or
tangible personal property.
"Redemption Date," when used with respect to any Securities to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date," for the interest payable on any Interest Payment
Date, means the thirtieth day (whether or not a Business Day) immediately
preceding such Interest Payment Date.
"Reorganization Plan" means the First Amended Joint Chapter 11 Plan (As
Modified), dated as of November 12, 1996, the First Modification thereto dated
January 16, 1997 and the Second Modification thereto dated January 22, 1997, as
confirmed by the United States Bankruptcy Court for the District of Delaware on
January 23, 1997.
"Requisite Holders" means the Holders of fifty-one percent (51%) of the
Aggregate Outstanding Amount of Securities.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office and also means, with respect to
any particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred because of his or her knowledge of and familiarity with
the particular subject.
"Scheduled Principal Payments" means, at a specified date, the scheduled
principal payments due on the Senior Secured Notes as set forth in Section
307(b)(i).
"Secondary Securities" has the meaning set forth in Section 307.
"Securities" means the Senior Secured Notes (including any Secondary
Securities issued in respect thereof).
13
"Security Agreement" means that certain Security Agreement, dated as of the
date hereof, between the Company and each Guarantor and the Trustee, for the
benefit of the Holders, as amended, modified or supplemented from time to time.
"Security Agreement--Patents and Trademarks" means that certain Security
Agreement and Mortgage -- Patents and Trademarks, dated as of the date hereof,
between the Company and each Guarantor and the Trustee, for the benefit of the
Holders, as amended, modified or supplemented from time to time.
"Security Register" and "Security Registrar" have the meanings specified in
Section 304.
"Senior Secured Notes" means the Company's 14% Senior Secured Notes Due
April 1, 2004 issued and outstanding pursuant to this Indenture (including
Secondary Securities issued in respect thereof).
"Shareholders Agreement" shall mean that certain Agreement dated as of
March ___, 1997 by and among the Company and WS Acquisition L.L.C., The
Equitable Life Assurance Society of the United States, The Northwest Mutual Life
Insurance, Phoenix Home Life Mutual Insurance Company, GE Capital Assurance
Company, Business Men's Assurance Company and Indianapolis Life Insurance
Company, as amended, modified or supplemented from time to time.
"Special Record Date," for the payment of any Defaulted Interest, means a
date fixed by the Trustee pursuant to Section 307(e)(i).
"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 (disregarding any
mandatory redemption payments required by the terms of this Indenture) or such
installment of interest is due and payable (or accrued and added to principal,
as herein provided).
"Stock Sale" has the meaning set forth in Section 424 hereof.
"Stock Sale Proceeds" has the meaning set forth in Section 424 hereof.
"Stock Sale Redemption Date" has the meaning set forth in Section 424
hereof.
"Stock Sale Redemption Proceeds" means, in the case of any Stock Sale, the
Stock Sale Proceeds minus the amount of such Stock Sale Proceeds applied to
repay Credit Facility Indebtedness pursuant to Section 424(a) hereof.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of stock or partnership or other interests entitled
to vote in the election of directors,
14
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of such
Person or a combination thereof.
"Termination Event" means (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder (other than a "Reportable
Event" not subject to the provision for a 30-day notice to the Pension Benefit
Guaranty Corporation under such regulations), or (ii) the withdrawal of the
Company or any of their ERISA Affiliates from a Pension Plan during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, or (iii) the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings to terminate a Pension Plan by the
Pension Benefit Guaranty Corporation, or (v) any other event or condition which
would constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
805.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"UCC" means the Uniform Commercial Code of the state identified by the
context in which the term is used.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee a Compliance Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenants the compliance with
which constitutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
15
(b) a brief statement as to the nature and scope of the examination or
investigation, if any, upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such Authorized Officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which the certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein or therein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such
16
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any reasonable manner which the Trustee deems
sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security or Holder of every Security issued upon the transfer thereof
or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
in reliance thereon, whether or not notation of such action is made upon such
Security.
Section 105. Notices to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed, in writing
and mailed, first-class postage prepaid, or delivered by nationally
recognized overnight courier, to or with the Trustee at its Corporate Trust
Office, Attention: ________________ (with a copy thereof to the Company at
the address specified in Section 105(b)), or at any other address
previously furnished in writing to the Company and each Holder by the
Trustee; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose (except as provided in Section 501(b)) hereunder if in
writing and mailed, first-class postage prepaid, or delivered by nationally
recognized overnight courier, to the Company addressed to it at 0000 Xxxxx
Xxxxxx Xxxxxxx, Xxxxx 000, Xx. Xxxxxxx, Xxxxxx, Xxxxxx H47 1Z2, Attention:
_________________, or at any other address previously furnished in writing
to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given
17
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any
other cause, it shall be impracticable to mail notice of any event as required
by any provision of this Indenture, then any method of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
Section 107. Conflict with Trust Indenture Act.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 318, inclusive, of the
Trust Indenture Act, or conflicts with any provision (an "incorporated
provision") required by or deemed to be included in this Indenture by operation
of such Trust Indenture Act Sections, such imposed duties or incorporated
provision shall control. If any provision of this Indenture modifies or excludes
any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified
or excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company or any
Guarantor shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person (other than the parties hereto and their successors and
permitted assigns
18
hereunder, any Paying Agent and the Holders) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 112. Governing Laws.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity; provided, however, that
interest shall accrue with respect to any such principal payment (at the rate
applicable to the Securities during the period of such extension as herein
provided) for the period from and after such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, to (but not including) the next
succeeding Business Day, and shall be payable on such next succeeding Business
Day.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
The Securities and the Trustee's certificate of authentication with respect
thereto shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may, consistently herewith, be determined by the Authorized Officer of the
Company executing such Securities, as evidenced by his or her execution of the
Securities. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security. The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner, all as determined by the Authorized Officer of the Company executing
such Securities, as evidenced by his or her execution of such Securities.
Section 202. Forms of Securities and Certificate of Authentication.
The Senior Secured Notes shall be in substantially the forms attached
hereto as Exhibit A and the form of the Trustee's certificate of authentication
shall be in the form provided in such Exhibit, which is incorporated in, and
made a part of, this Indenture.
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ARTICLE THREE
THE SECURITIES
Section 301. Title and Terms.
The aggregate original principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $_____________,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities (including Secondary
Securities) pursuant to Xxxxxxx 000, 000, 000, 000 xx 000. Interest on the
Securities shall begin to accrue on the Closing Date and the initial Interest
Rate (prior to default) on the Securities shall be equal to 14% per annum,
payable in cash or, at the Company's option, up to 4% per annum in Secondary
Securities; provided that, with respect to the payment due on the first Interest
Payment Date, the Company may, at its option, pay all interest due on that date
in Secondary Securities. Notwithstanding anything to the contrary in the
preceding sentence, so long as no Potential Event of Default or Event of Default
shall have occurred and be continuing:
(a) the Interest Rate (prior to default) on the Securities shall be
permanently reduced to 12% per annum, payable in cash or, at the Company's
option, up to 2% per annum in Secondary Securities, upon the delivery by
the Company to the Trustee of (i) financial statements demonstrating that
Consolidated EBITDA for the immediately preceding four consecutive fiscal
quarters of the Company was not less than $18,000,000, (ii) an Officers
Certificate, and (iii) an Opinion of Counsel in form and substance
reasonably satisfactory to Trustee, such reduction in the Interest Rate
(prior to default) on the Securities to be effective as of the commencement
of the next succeeding Interest Accrual Period that commences at least
thirty days after the date on which such financial statements have been (1)
delivered to the Trustee and (2) filed with the Commission; and
(b) the Interest Rate (prior to default) on the Securities shall be
permanently reduced to 10% per annum payable in cash, upon the delivery by
the Company to the Trustee of (i) financial statements demonstrating that
Consolidated EBITDA for the immediately preceding four consecutive fiscal
quarters of the Company was not less than $25,000,000, (ii) an Officers
Certificate, and (iii) an Opinion of Counsel in form and substance
reasonably satisfactory to Trustee, such reduction in the Interest Rate
(prior to default) on the Securities to be effective as of the commencement
of the next succeeding Interest Accrual Period that commences at least
thirty days after the date on which such financial statements have been (1)
delivered to the Trustee and (2) filed with the Commission.
Upon the occurrence of any event which would result in the reduction of the
Interest Rate pursuant to Section 301(a) or (b) hereof, the Trustee shall give
prompt written notice to all Holders (i) of such occurrence, (ii) that the
Interest Rate will be reduced, and (iii) the effective date thereof.
20
The Interest Rate in effect with respect to the Securities is subject to
increase as provided in Sections 503 and 515. Any such increase shall be paid
solely in cash.
Upon the occurrence of any Payment Default, Bankruptcy Default or any
default pursuant to Section 501(c) hereof, all interest accrued thereafter and
during the period in which the Payment Default, Bankruptcy Default or any
default pursuant to Section 501(c) hereof has continued shall be payable solely
in cash, and no portion thereof may be paid in Secondary Securities.
Section 302. Denominations.
The Securities shall be issuable in registered form in minimum
denominations (except for Secondary Securities) of $5,000 and integral multiples
of $5,000 in excess thereof and one or more Securities in such denomination as
may be necessary to represent the remainder of the initial aggregate principal
amount of the Securities. In each case, such principal amounts shall be
expressed in terms of the principal amounts thereof at the Closing Date.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by an Authorized
Officer of the Company. The signature of such Authorized Officer on the
Securities may be manual or facsimile. Securities bearing the manual or
facsimile signature of any individual who at the time of execution of the
Securities was authorized to act on behalf of the Company in executing the
Securities shall bind the Company, notwithstanding that such individual may have
ceased to be authorized to act in such capacity or to hold the applicable office
he or she held at the time of execution of the Securities on behalf of the
Company prior to the authentication and delivery of such Securities or did not
possess such authorization (or such office) at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security authenticated and delivered by the Trustee upon a Company
Order on the Closing Date shall be dated as of the Closing Date. All other
Securities that are authenticated after the Closing Date for any other purpose
under this Indenture shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Exhibit
A hereto duly executed by the Trustee by manual signature of one of its duly
authorized Responsible Officers, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such
21
Security has been duly authenticated and delivered hereunder and entitled to the
benefits of this Indenture.
In case the Company, as permitted by Section 421 hereof, shall be
consolidated or merged with or into any other Person or shall convey or transfer
all or substantially all of its properties and assets to any other Person, and
the successor Person resulting from such consolidation, or surviving such
merger, or into which the Company shall have been merged, or the successor
Person which shall have received a conveyance or transfer, as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance or transfer may, from time to time, at the
request of the successor Person, be exchanged for other Securities executed in
the name of the successor Person with such changes in phraseology and form as
may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee,
upon Company Order of the successor Person, shall authenticate and deliver
Securities as specified in such request for the purpose of such exchange. If
Securities shall at any time be authenticated and delivered in any new name of a
successor Person pursuant to this Section in exchange or substitution for or
upon registration of transfer of any Securities, such successor Person, at the
option of any Holder but without expense to such Holder, shall provide for the
exchange of all Securities at the time Outstanding held by such Holder for
Securities authenticated and delivered in such new name.
Section 304. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency designated pursuant to Section 402 being herein sometimes
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby initially
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided. Upon any resignation or removal of
the Security Registrar, the Company shall promptly appoint a successor with the
approval of the Requisite Holders or, in the absence of such approval, assume
the duties of Security Registrar until a successor shall have been approved, and
notify the Holders of such action.
If a Person other than the Trustee is appointed by the Company as Security
Registrar, the Company will give the Trustee prompt written notice of the
appointment of such Security Registrar and of the location, and any change in
the location, of the Security Register, and the Trustee shall have the right to
inspect the Security Register at all reasonable times and to obtain copies
thereof and the Trustee shall have the right to rely upon a certificate executed
on behalf of the Security Registrar by an authorized officer thereof as to the
names, addresses, wiring instructions and taxpayer identification numbers of the
Holders of the Securities and the principal amounts and numbers of such
Securities.
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 402 for such
purpose, the Company
22
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or
for exchange or redemption shall (if so required by the Company or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to pay all documentary, stamp or similar issues or transfer any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Sections 806 or 908 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer of or
exchange any Security during a period beginning at the opening of business
fifteen (15) days before the mailing of a notice of redemption of the Securities
selected for redemption under Section 904 and ending at the close of business on
the day of such mailing, or (b) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of Securities being redeemed in part.
Section 305. Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them and any agent thereof harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and upon the Company's written request
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a
replacement Security of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
23
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section, the
Company may require the payment of a sum sufficient to cover any documentary,
stamp or similar issue or transfer tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute a contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone, and shall be entitled to all benefits of this
Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 306. Persons Deemed Owners.
Prior to, and at the time of, due presentment for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Section 307. Payment of Principal and Interest; Preservation of Rights.
(a) The Securities shall accrue interest (prior to default) during each
Interest Accrual Period at the applicable Interest Rate determined in accordance
with in Section 301, including, to the extent permitted in such Section, at the
option of the Company, through the issuance of an additional Securities with a
principal amount equal to the stated portion of accrued but unpaid interest
(such Securities as issued from time to time for accrued but unpaid interest
being referred to herein as "Secondary Securities"); provided that the Company
may at its option pay cash in lieu of issuing Secondary Securities. Any such
Secondary Securities shall be governed by this Indenture and shall be identical
in all respects to the Securities initially issued hereunder (except, as the
case may be, with respect to the title, issuance date and aggregate principal
amount). The issuance of Secondary Securities in accordance with this Section
307 shall not relieve the Company of its obligations under Section 401. To the
extent lawful and enforceable, interest on Defaulted Interest on and interest on
the principal amount of Securities shall accrue at the applicable Interest Rate,
as increased pursuant to Sections 503 and 515.
24
(b) The principal of the Securities shall be payable in installments as
follows (excluding the principal amount of Secondary Securities) unless the
unpaid principal of such Securities becomes due and payable at an earlier date
by declaration of acceleration or in accordance with this Section 307:
(i) Amounts shall be due and payable in accordance with the following
schedule:
Scheduled Outstanding Principal
Principal Payment Date to be Repaid
---------------------- ---------------------
October 1, 2001 $4,000,000
April 1, 2002 4,000,000
October 1, 2002 4,000,000
April 1, 2003 4,000,000
October 1, 2003 4,000,000
April 1, 2004 Balance of Unpaid Principal
(ii) All payments of principal on the Securities made pursuant to this
subsection shall be allocated on a pro rata basis among all Outstanding
Securities.
(c) Except as set forth above with respect to payment of interest by
issuance of Secondary Securities, interest and principal on each Security shall
be payable by wire transfer to a United States dollar account maintained by the
Holder of such Security at a Depository Institution in the United States as
reflected on the Security Register. Interest and principal on each Security
shall be paid by the Paying Agent from the amounts made available therefor by
the Company. In the case of the Maturity of a Security, the Trustee, in the name
and at the expense of the Company, shall notify the Person entitled thereto at
its address as it appears on the Security Register that such Security is to be
paid in full. Such notice shall be mailed as soon as practicable, and in any
event no later than the tenth (10th) day prior to the Maturity of such Security
and shall specify the place where such Security may be presented and surrendered
for final payment. The Company, with the prior consent of the Trustee, may, but
shall not be obligated to, adopt any other method of payment requested by a
Holder.
(d) The Holders as of the close of business on the Regular Record Date in
respect of an Interest Payment Date shall be entitled to the interest accrued
and payable and principal payable, if any, on such Interest Payment Date.
Payments of principal (and interest, in cases where the amount of interest which
is being paid on Securities is less than the amount of interest which has
accrued) to such Holders shall be made in the proportion that the unpaid
principal balance of the Securities registered in the name of each such Holder
on such Regular Record Date bears to the Aggregate Outstanding Amount of all
Securities. Any such payments that are returned to the Paying Agent shall be
held for payment as herein provided at the office or agency of the Company to be
maintained as provided in Section 402.
25
(e) Any interest on any Security which is payable, but is not punctually
paid or duly provided for (including, without limitation, provision by issuance
of Secondary Securities), on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder; and such Defaulted
Interest may, unless the Trustee shall have made demand therefor as provided in
the Securities and Section 503 hereof, be paid by the Company, at its election
in each case, as provided in subsection (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a date (the "Special
Record Date") for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited is to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as provided in this subsection. The Company shall be entitled to
any interest earned on the amounts so deposited. Thereupon the Trustee
shall fix the Special Record Date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less than
ten (10) days prior to the date of the proposed payment and not less than
ten (10) days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date. In the name and at the expense of the Company, the
Trustee shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder at its address as it appears in the
Security Register, not less than ten (10) days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following subsection (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this subsection,
such payment shall be deemed practicable by the Trustee.
(f) All Secondary Securities permitted or required to be issued under the
terms of this Indenture in lieu of the cash payment of accrued interest shall be
issued and delivered to the Holders entitled thereto on the applicable Record
Date no later than the Interest Payment Date on which such accrued interest is
due.
26
Section 308. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by the Company pursuant to a
Company Order.
Section 309. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year
of twelve 30-day months and the actual number of days which have elapsed.
ARTICLE FOUR
COVENANTS
Section 401. Payment of Principal and Interest.
Subject to the grace periods provided in Section 501(a), the Company will
duly and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
Section 402. Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities may be served. The office of the
Trustee at the Corporate Trust Office of the Trustee shall be such office or
agency of the Company.
Section 403. Money for Security Payments to be Held in Trust.
On or before 12:00 Noon, Eastern time, on the Business Day immediately
preceding each due date of the principal of or interest on, any Securities, the
Company shall deposit with the Paying Agent a sum in same day funds (or, if
permitted hereunder, Secondary Securities) sufficient to pay the principal or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of such action or any
failure to so act.
27
The Company will cause any Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of or
interest on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by such Paying Agent; and, upon such
payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of the principal of or interest on any Security and remaining unclaimed
for two years after such principal or interest has become due and payable shall
be paid to the Company; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in Authorized Newspapers, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than thirty (30) days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
Section 404. Maintenance of Existence; Compliance with Laws.
Except as otherwise specifically permitted under Section 421, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate or partnership
existence, as the case may be, of each Subsidiary and all rights, privileges,
franchises, permits, licenses, patents, patent rights and other authority which
if not so preserved or kept in full force and effect would have a material
adverse effect on the business of the Company and its Subsidiaries taken as a
whole. The Company and its Subsidiaries will at all times conduct their business
in an orderly manner without voluntary interruption and shall exercise all
reasonable diligence in order to comply with the requirements of all material
applicable laws, rules, regulations, licenses, permits and orders of any
governmental authority, noncompliance with which could
28
materially and adversely affect the business, properties, assets, operations or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole.
Section 405. Payment of Taxes and Other Claims.
(a) The Company will, and will cause each of its Subsidiaries to, pay and
discharge promptly when due all taxes, assessments and other governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise, which, if
unpaid, might give rise to Liens upon such properties or any part thereof;
provided, however, that such payment and discharge shall not be required with
respect to (i) any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the applicable party shall have set aside on its books adequate
reserves with respect thereto in accordance with GAAP and such contest operates
to suspend collection of the contested tax, assessment, charge, levy or claims
and enforcement of a Lien or (ii) any tax, assessment, charge, levy or claims,
the failure to pay and discharge when due which, individually or in the
aggregate, would not have a Material Adverse Effect.
(b) The Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person other than the Company and its Subsidiaries.
Section 406. Limitation on Indebtedness.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness; provided
however, that this Section 406 shall not limit the incurrence by the Company or
any Subsidiary of (i) the Credit Facility Indebtedness; (ii) Indebtedness
incurred hereunder; and (iii) to the extent permitted under the Credit Agreement
(a) Indebtedness secured by Liens permitted under Section 412, (b) Indebtedness
(including, without limitation, guarantees) existing on the date hereof but not
the extension, renewal or refunding thereof, (c) Indebtedness to trade creditors
incurred in the ordinary course of business, (d) guarantees constituting the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (e) Purchase Money Indebtedness to finance capital
expenditures permitted by Section 420 hereof provided that any Lien granted with
respect to such Indebtedness is permitted by Section 412(e) hereof, (f)
intercompany Indebtedness between the Company and its wholly-owned Subsidiaries
which are Guarantors (other than SLM Trademark Acquisition Canada Corporation),
(g) other Indebtedness in the ordinary course of business not to exceed
$________ at any one time outstanding, (h) interest rate and currency protection
agreements occurring in the ordinary course of business, and (i) Indebtedness to
finance insurance premiums.
29
Section 407. Limitation on Restricted Junior Payments.
The Company and its Subsidiaries will not, prior to the payment in full of
the principal of and interest on the Senior Secured Notes, directly or
indirectly, declare, order, pay, make or set apart any sum for any dividends or
make any other distribution, whether in cash, property, securities or a
combination thereof, with respect to (whether by reduction of capital or
otherwise) any shares of its capital stock or directly or indirectly redeem,
purchase, retire or otherwise acquire for value (or permit any Subsidiary to
purchase or acquire) any shares of any class of its capital stock or set aside
any amount for any such purpose except that (i) any Subsidiary of the Company
may pay dividends or make other distributions to its direct parent, (ii) the
Company may pay dividends in kind or exchange shares of its capital stock for
other such shares and (iii) so long as no Potential Event of Default or Event of
Default has occurred and is continuing or would result therefrom, the Company
may repurchase or redeem its shares from employees or officers who have died,
resigned, been terminated or retired so long as the aggregate amount expended in
any fiscal year of the Company does not exceed $250,000.
Section 408. Limitation on Restrictions Affecting Subsidiaries.
Except as otherwise set forth herein, the Company will not, and will not
permit any Subsidiary to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to (a) pay dividends or make any other distribution on any of
such Subsidiary's capital stock or partnership interests owned by the Company or
any Subsidiary of the Company, (b) pay any Indebtedness owed to the Company or
any other Subsidiary of the Company, (c) make loans or advances to the Company
or any other Subsidiary of the Company, or (d) transfer any of its property or
assets to the Company or any other Subsidiary of the Company.
Section 409. Guaranty and Security Agreements.
The Company shall, and shall cause each of the Guarantors to, execute and
deliver the Collateral Documents, and the Company agrees, and agrees to cause
the Guarantors, to perform fully, promptly and faithfully all of their
respective obligations under each of the Collateral Documents and the Guaranties
to which they are a party.
Section 410. Execution of Guaranty by Subsidiaries.
The Company covenants and agrees that it shall cause any Person that
becomes a Subsidiary after the Closing Date to execute and deliver to the
Trustee as soon as practicable a counterpart hereof, cause such Person to be
bound by the Guaranty and cause such Person to execute and deliver the
appropriate Collateral Documents.
Section 411. Financial Statements and Other Reports.
The Company will maintain a system of accounting established and
administered in accordance with past sound business practices to permit
preparation of
30
financial statements in conformity with GAAP. The Company will at all times file
reports with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
and shall comply with the provisions of Section 314(a) of the Trust Indenture
Act. The Company will deliver to the Trustee and (except in the case of Section
411(c) below) the Holders:
(a) as soon as practicable, and in any event within 45 days after the
end of each of the first three quarters in each year, consolidated and
consolidating balance sheets of the Company and its Subsidiaries as at the
end of such period and the related consolidated (and, as to statements of
income only, consolidating) statements of income, cash flows and
stockholders' equity of the Company and its Subsidiaries for such quarter
and for the period from the beginning of the current fiscal year to the end
of such quarter, setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the previous fiscal
year, all in reasonable detail and certified by the chief financial officer
of the Company that they fairly present the financial condition of the
Company and its Subsidiaries as at the dates indicated and the results of
their operations for the periods indicated, subject to changes resulting
from audit and normal year-end adjustment;
(b) as soon as practicable, and in any event within 90 days after the
end of each year, audited consolidated and consolidating balance sheets of
the Company and its Subsidiaries as at the end of such year and the related
consolidated (and, as to statements of income only, consolidating)
statements of income, cash flows and stockholders' equity of the Company
and its Subsidiaries for such year with a report thereon by the independent
public accountant of the Company, setting forth in each case in comparative
form the consolidated figures for the previous fiscal year, all in
reasonable detail and certified by the chief financial officer of the
Company that they fairly present the financial condition of the Company and
its Subsidiaries as at the dates indicated and the results of their
operations for the periods indicated;
(c) together with each delivery of financial statements of the Company
and its Subsidiaries pursuant to subsections (a) and (b) above, (i) an
Officers' Certificate stating that the signers have reviewed the terms of
this Indenture and the Securities and have made, or caused to be made under
their supervision, a review in reasonable detail of the transactions and
condition of the Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not disclosed
the existence at the end of such accounting period, and that the signers do
not have knowledge of the existence as at the date of the Officers'
Certificate, of any condition or event which constitutes an Event of
Default or Potential Event of Default, or, if any such condition or event
existed or exists, specifying the nature and period of existence thereof
and what action the Company has taken, is taking and proposes to take with
respect thereto; and (ii) a Compliance Certificate demonstrating in
reasonable detail compliance at the end of each applicable accounting
period with the restrictions contained in Section 417;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements, if any, sent or made
available
31
generally by the Company to its security holders or by any Subsidiary of
the Company to its security holders other than the Company or another
Subsidiary, of all regular and periodic reports (including, Forms 10-Q,
10-K and 8-K), all registration statements and prospectuses, if any, and
all other information and documents filed by the Company or any of its
Subsidiaries with any securities exchange or with the Commission or any
governmental authority succeeding to any of its functions, and of all press
releases and other statements made available generally by the Company or
any Subsidiary of the Company to the public concerning material
developments in the business of the Company and its Subsidiaries;
(e) promptly upon any officer of the Company obtaining knowledge (i)
of any condition or event which constitutes an Event of Default or
Potential Event of Default, (ii) that any Person has given any notice to
the Company or any Subsidiary of the Company or taken any other action with
respect to a claimed default or event or condition of the type referred to
in Section 501(d), (iii) of a material adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, or (iv)
that any holder of a Lien permitted by Section 412(f) has given any notice
to the Company or any Subsidiary of the Company or taken any other action
with respect to such Lien that could result in the foreclosure or
enforcement of such Lien against the assets of the Company or any
Subsidiary, an Officers' Certificate specifying the nature and period of
existence of any such condition or event, or specifying the notice given or
action taken by such holder or Person and the nature of such claimed
default, Event of Default, Potential Event of Default, or event or
condition, and what action the Company or such Subsidiary, as the case may
be, has taken, is taking and proposes to take with respect thereto; and
(f) with reasonable promptness, such other information and data with
respect to the Company or its Subsidiaries as from time to time may be
reasonably requested by the Trustee or the Holders.
Section 412. Limitation on Liens; Negative Pledge.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any of its properties or assets or the properties or assets of
any of its Subsidiaries, respectively, whether now owned or hereafter acquired,
or any income or profits therefrom, except:
(a) Liens incurred and pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, old-age pensions and other social security or similar laws (not
including any Lien described in Section 412(m) of the Code);
(b) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens and other similar liens,
incurred in good faith in the ordinary course of business and securing
obligations which are not overdue for a
32
period of more than fifteen (15) days or which are being contested in
compliance with Section 405;
(c) Liens securing the payment of taxes, assessments and governmental
charges or levies, that are not delinquent or are being diligently
contested in compliance with Section 405;
(d) zoning restrictions, easements, rights of way licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on
the use of property or minor defects or irregularities of title and similar
encumbrances (and with respect to leasehold interests, mortgages,
obligations, liens and other encumbrances incurred, created, assumed or
permitted to exist and arising by, through or under a landlord or owner of
the leased property, with or without consent to the lessee) which do not in
the aggregate materially detract from the value of its property or assets
or materially impair the use thereof in the operation of its business;
(e) purchase money Liens granted in connection with the occurrence of
indebtedness permitted by Section 406(e) hereof, to the vendor or Person
financing the construction or acquisition of property, plant or equipment,
provided that (i) such Lien is limited to the particular assets constructed
or acquired, (ii) the debt secured by the Lien does not exceed the amount
financed for the construction or acquisition cost (including transaction
costs and indemnities customarily secured by a Lien of such type) of the
specific assets on which the Lien is granted, (iii) such Lien arises and
the indebtedness secured thereby is created within 120 days of the
completion of such construction or of such acquisition or are incurred to
extend, renew or refinance such Liens and indebtedness incurred within such
120-day period and (iv) such transaction does not otherwise violate the
terms of the Indenture;
(f) Liens securing the Credit Facility Indebtedness;
(g) Liens existing on the date of this Indenture but not the
extension, renewal or refunding of the indebtedness secured thereby;
(h) Liens granted to the Trustee pursuant to the Collateral Documents
as security for the benefit of the Holders of the Securities hereunder;
(i) Liens and deposits securing the performance of bids, tenders,
leases, contracts (other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds, performance bonds
and other obligations of like nature, incurred as an incident to and in the
ordinary course of business;
(j) judgment Liens securing judgments and decrees, which would not
constitute an Event of Default under Section 501(g);
(k) warrants being issued under the Reorganization Plan or stock
options issued pursuant to stock option plans;
33
(l) option of other shareholders of CCM Holdings (1983) Inc.;
(m) UCC filings made for informational purposes or required by any
Personal Property Security Law by lessors of property to the Company, a
Guarantor or any Subsidiary thereof;
(n) Liens in favor of customs and revenue authorities to secure the
payment of custom duties in connection with the importation of goods in the
ordinary course of business;
(o) Liens on property prior to the acquisition thereof by the Company,
a Guarantor or any Subsidiary thereof, provided that such Lien is not
created in contemplation of or in connection with such acquisition, such
Lien does not apply to any other property and such Lien does not materially
interfere with the use, occupancy and operation of any property, materially
reduce the fair market value of such property but for such Lien or result
in any material increase in the cost of operating, occupying or owning (or
leasing) such property; or
(p) Liens that arise automatically under Environmental Law provided
that the Company is in compliance with Section 404 and such Lien would not
have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries will enter into any
agreement prohibiting the creation or assumption of any Lien upon any of their
properties or assets, whether now owned or hereafter acquired, to secure payment
of the Securities.
Section 413. Restrictions on Acquisition of Subsidiaries.
The Company will not, nor will it permit any Subsidiary to, acquire or form
any Subsidiary without the express prior written consent of the Requisite
Holders, which consent shall not be unreasonably withheld, unless,
simultaneously with the acquisition or formation of such Subsidiary (i) the
Company grants to the Trustee a Lien with respect to the outstanding stock of
such Subsidiary and (ii) the Company causes each Subsidiary so formed or
acquired to execute and deliver to the Trustee a counterpart hereof, cause such
Subsidiary to be bound by the Guaranty and cause such Subsidiary to execute and
deliver all applicable Collateral Documents. Reference to "Subsidiaries" in this
Indenture shall not be applicable until any such Subsidiaries are formed.
Section 414. Inspection.
The Company will permit and will cause each of its Subsidiaries to permit
the Trustee or its authorized representatives to visit and inspect properties of
the Company or any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants, all upon reasonable notice to
34
the Company and at such reasonable times during normal business hours and as
often as may be reasonably requested.
Section 415. Maintenance of Properties and Insurance.
The Company will cause all material properties owned by or leased to it or
any Subsidiary and used or useful in the conduct of its business or the business
of such Subsidiary to be maintained and kept in normal condition, repair and
working order and supplied with all necessary equipment and will 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. The Company will provide or cause to be provided, for
itself and the Subsidiaries, insurance against loss or damage of the kinds
customarily insured against by entities similarly situated and owning like
properties, including, but not limited to, products liability insurance and
public liability insurance, with reputable insurers or with the government of
the United States of America or an agency or instrumentality thereof, in such
amounts with such deductibles and by such methods as shall be customary for
entities similarly situated in the industry.
Section 416. Transactions with Affiliates.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any Affiliate of the Company, on
terms that are less favorable to the Company or that Subsidiary, as the case may
be, than those which might be obtained at the time from Persons who are not such
an Affiliate; provided that, any transaction with such an Affiliate having an
aggregate value equal to or greater than $500,000 shall require the approval of
a majority of the Company's independent directors, and provided further, that
the foregoing restriction shall not apply to any transaction between the Company
and any of its wholly-owned Subsidiaries or between any of the Company's
wholly-owned Subsidiaries.
Section 417. Financial Covenants.
The Company shall not permit the ratio of Consolidated EBITDA less
Consolidated Capital Expenditures to Consolidated Cash Interest Expense, as
tested on a rolling four quarter basis, to be less than 1.25:1. provided that
the first test period for such ratio shall be the four fiscal quarters ending
December 31, 1997.
Section 418. Waiver of Stay, Extension or Usury Laws.
The Company, for itself and on behalf of each Guarantor, covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
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 any Guarantor from paying all or any portion of the
principal of or interest on the Securities as
35
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, for itself and on behalf of each
Guarantor, hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 419. Limitation on Investments, Loans and Advances.
Except as otherwise permitted in the Credit Agreement, the Company will
not, nor will it permit any Subsidiary to, make any advance, loan, extension of
credit or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of, or make any other investment in, any Person,
except for investments in Cash Equivalents.
Section 420. Limitation on Consolidated Capital Expenditures.
The Company will not, and will not permit any of its Subsidiaries to make,
in the aggregate, Consolidated Capital Expenditures in excess of $3,650,000 for
the year ending December 31, 1997, $4,000,000 for the year ending December 31,
1998, $4,400,000 for the year ending December 31, 1999 and $5,000,000 for each
calendar year thereafter.
Section 421. Companies May Consolidate, etc., Only on Certain Terms.
The Company will not and will not permit any of its Subsidiaries to,
consolidate with or merge with or into (other than any consolidation or merger
of a Subsidiary into another Subsidiary or into the Company) any other
corporation or convey or transfer all or substantially all of its properties and
assets, directly or indirectly in one transaction or a series of related
transactions, to any Person, unless:
(a) the corporation formed by such consolidation or into which the Company
or any of its Subsidiaries is merged (if the Company or such Subsidiary is not
the surviving entity) or the Person which acquires by conveyance or transfer all
or substantially all of the properties and assets of the Company or such
Subsidiary (i) shall be a corporation organized and existing under the laws of
the United States of America or any State or the District of Columbia; (ii)
shall expressly assume by an indenture supplemental hereto, executed and
delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of and interest on the
Securities and the performance of every covenant and obligation of this
Indenture on the part of the Company or such Subsidiary to be performed or
observed; and (iii) if such corporation or Person is a holding company with a
significant portion of its operations conducted and assets held by one or more
subsidiaries, shall cause such subsidiaries to execute a counterpart hereto and
to be bound by the Guaranty herein;
(b) immediately before and immediately after giving effect to such
transaction, no Event of Default, and no Potential Event of Default, shall have
happened and be continuing;
36
(c) immediately after giving effect to such transaction, the corporation
formed by such consolidation or into which the Company or such Subsidiary is
merged or the Person which acquired by conveyance or transfer all or
substantially all of the properties and assets of the Company or such Subsidiary
shall have a Consolidated Net Worth of not less than the Consolidated Net Worth
of the Company or such Subsidiary immediately preceding such transaction;
(d) the Company shall have complied with the provisions of Section 425, to
the extent applicable; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture complies with this
Indenture and that all conditions precedent herein relating to such transaction
have been complied with.
Upon any consolidation or merger, or any sale or transfer of all or
substantially all of the assets, of the Company in accordance with this Section
421, the successor Person formed by such consolidation or into which the Company
is merged or to which such sale or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein. When a successor assumes all the obligations of its
predecessor under this Indenture, the Securities and the Collateral Documents to
which the predecessor is a party, the predecessor will be released from the
obligations thereunder.
Section 422. Conduct of Business.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business other than the business engaged in by the Company and its
Subsidiaries on the Closing Date and substantially similar or related businesses
and any other businesses which in the aggregate are not material to the Company
and its Subsidiaries taken as a whole. The Company shall at all times be a
corporation organized and existing under the laws of a State of the United
States of America.
Section 423. Asset Sales.
The Company will not, and will not permit any of its Subsidiaries to enter
into any Asset Sale unless (i) the purchase price received by the Company or
Subsidiary in connection with such Asset Sale is comprised of a minimum of
[fifty percent (50%)] cash or Cash Equivalents, (ii) any promissory note or
other instrument evidencing indebtedness for borrowed money delivered to the
Company and/or its Subsidiaries in connection with such Asset Sale shall be
pledged to the Trustee pursuant to the Collateral Documents (subject to the
terms of the Intercreditor Agreement), and (iii) the Company shall deliver an
Officers' Certificate to the Trustee demonstrating the date of receipt of the
Net Cash Proceeds of Asset Sale and the derivation of the Net Cash Proceeds of
Asset Sale.
37
Within one hundred and twenty (120) days after the receipt of Net Cash
Proceeds of Asset Sale, the Company shall either:
(a) have purchased or contracted for the purchase of replacement
assets for the assets subject to such Asset Sale, or
(b) if the Company has not purchased or contracted for the purchase of
replacement assets as provided in subparagraph (a), above, or to the extent
the Net Cash Proceeds of Asset Sale exceed such purchase price,
(i) first, to the extent the Credit Facility Indebtedness is
secured pursuant to the Credit Agreement by the assets that were sold,
leased, assigned or otherwise transferred, unless waived in accordance
with the terms thereof, (x) repay, or deposited in a cash collateral
account to be applied solely toward the repayment of, the Credit
Facility Indebtedness, and (y) permanently reduce the commitments
under the Credit Agreement by the amount of such Net Cash Proceeds of
Asset Sale applied to repay the Credit Facility Indebtedness pursuant
to clause (x) above; and then
(ii) second, to the extent the Available Redemption Proceeds at
such time (after taking into account the Asset Sale Redemption
Proceeds from such Asset Sale) exceeds [$100,000], offer to redeem
Securities (an "Asset Sale Redemption");
provided, that, except as otherwise set forth in this Section 423, such
repayments, redemptions, repurchases, and purchases are in an aggregate amount
not less than the amount of such Net Cash Proceeds of Asset Sale; provided
further, however, that the Company shall not purchase any replacement assets
pursuant to clause (a) of this Section 423 unless, (i) at the time of such
purchase, and after taking such purchase into account, no Potential Event of
Default or Event of Default shall have occurred and be continuing and (ii) the
proceeds from the sale of long term assets (classified in accordance with GAAP)
are used only to purchase long term assets (classified in accordance with GAAP).
Concurrent with the repayment of the Credit Facility Indebtedness,
redemption of Securities or purchase of replacement assets, the Company shall
deliver to the Trustee an Officers' Certificate identifying in reasonable detail
the proposed use of such Net Cash Proceeds of Asset Sale; provided that in the
case such Net Cash Proceeds of Asset Sale are proposed to be applied toward the
purchase of replacement assets, upon the request of the Trustee, the Company
shall provide invoices and other documentation reasonably satisfactory to the
Trustee relating to the costs of such replacement assets.
If the Company shall be required to offer to redeem the Securities pursuant
to an Asset Sale Redemption, the Company shall offer to redeem the Securities at
a redemption price equal to one hundred percent (100%) of the principal amount
thereof, together with accrued and unpaid interest thereon to the Asset Sale
Redemption Date.
38
Unless the Company shall have theretofore called all the outstanding
Securities for redemption pursuant to Section 424, 425 or 901, notice of an
offer in connection with an Asset Sale Redemption shall be given by the Company
by first class mail, postage prepaid, mailed not less than thirty-five (35) days
before the Asset Sale Redemption Date to each Holder of a Security (with a copy
to the Trustee) at his address as it appears on the Security Register on the
date of such notice, but failure to give such notice by mailing in the manner
herein provided to the Holder, or any defect in the notice to any Holder, shall
not affect the validity of the proceedings for the redemption of any other
Securities.
All such notices shall state:
(i) the events constituting the Asset Sale;
(ii) the Asset Sale Redemption Date;
(iii) the amount of Available Redemption Proceeds allocable to the
Securities;
(iv) that the redemption price will be one hundred percent (100%) of
the principal amount of the Securities redeemed, plus accrued and unpaid
interest thereon to the Asset Sale Redemption Date;
(v) that on the Asset Sale Redemption Date to the extent the Holder
has elected to have his or her Securities redeemed the redemption price
will become due and payable upon the Securities to be redeemed, and that
interest thereon shall cease to accrue on and after such date;
(vi) that the Securities shall be surrendered at the principal office
of the Trustee for payment of the redemption price;
(vii) that a Holder electing to accept the offer and require
redemption of its Securities will be required to deliver the Securities,
with the form entitled "Notice of Holder to Elect Redemption" on the
reverse of the Securities properly completed ("Notice of Election"), not
later than the tenth (10th) day prior to the Asset Sale Redemption Date;
and
(viii) that such Notice of Election shall be irrevocable absent the
written consent of the Company.
Notice of such offer to redeem shall be given by the Company, or by the
Trustee at the Company's request in the name and at the expense of the Company;
provided, that the Trustee receives such request no less than forty (40) days
before the Asset Sale Redemption Date.
39
No failure of the Company to give the foregoing notice shall limit any
Holder's right to accept the offer and require the redemption of Securities
pursuant to an Asset Sale Redemption.
A Holder electing to accept the offer and require redemption of its
Securities shall make such election by delivering the Securities, with the
Notices of Election properly completed, to the Corporate Trust Office of the
Trustee not later than the tenth (10th) day prior to the Asset Sale Redemption
Date. Such Notice of Election shall be irrevocable absent the written consent of
the Company.
If the Available Redemption Proceeds are insufficient to redeem all of the
Securities with respect to which properly completed and validly executed Notices
of Election shall have been delivered, the Trustee or its agent shall select by
lot or any other appropriate and fair method, the Securities to be redeemed as a
whole or in part and the Trustee or its agent shall promptly return all
Securities delivered but not selected for redemption to the registered holder
thereof.
If the principal amount of the Securities delivered, together with properly
completed and validly executed Notices of Election, is less than the Available
Redemption Proceeds, the Company shall be required to redeem only such
Securities so delivered and the Company shall be entitled to retain the
remaining amount of Available Redemption Proceeds.
To the extent redemption of the Securities is required under Section
423(b)(ii), all Available Redemption Proceeds on the Asset Sale Redemption Date
shall be applied by the Trustee to pay one hundred percent (100%) of the
principal amount of, and accrued interest on, the Securities to be redeemed;
provided, that any semi-annual payment of interest becoming due on the Asset
Sale Redemption Date shall be payable to the holder of such Securities
registered as such on the Regular Record Date.
The Securities with respect to which Holders shall have elected to accept
the offer and require redemption and which have been selected to be redeemed, as
provided above, shall, on the Asset Sale Redemption Date, become due and payable
at the redemption price set forth above, and from and after such date (unless
the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest. Upon surrender of any Security for
redemption in accordance with any Notice of Election and acceptance of such
Security for redemption, as provided above, such Security shall be redeemed by
the Company at the Redemption Price set forth in this Section 423.
If any Security to be redeemed shall not be so paid upon surrender thereof
for redemption, the principal shall, until paid, bear interest from the Asset
Sale Redemption Date at the rate borne by the Security (including, if
applicable, any increase under Section 503 or 515).
40
Section 424. Mandatory Redemption Upon Sale of Equity.
Upon the sale by the Company of any equity securities issued by the Company
other than sales in connection with the exercise of options for the purchase of
the Company's stock either (x) outstanding the date hereof or (y) granted
thereafter the value of which does not exceed $______ in any fiscal year of the
Company, the Company shall (a) apply all of the proceeds from such sale, net of
all costs of sale and issuance incurred by the Company ("Stock Sale Proceeds")
to the repayment of the Credit Facility Indebtedness and the permanent reduction
of the commitments under the Credit Agreement by the amount of the Stock Sale
Proceeds applied to the repayment of the Credit Facility Indebtedness, unless
waived in accordance with the terms thereof and (b) to the extent the Available
Redemption Proceeds at such time (after taking into account the Stock Sale
Redemption Proceeds from such Stock Sale) exceeds [$100,000], offer to redeem
the Securities at a redemption price equal to one hundred percent (100%) of the
principal amount thereof, together with accrued and unpaid interest thereon to
the Stock Sale Redemption Date (as defined below). The "Stock Sale Redemption
Date" shall be the sixty-fifth (65th) day after the date on which such Stock
Sale shall have occurred. The term "Stock Sale" shall mean any sale of equity
securities that is subject to this Section 424.
Unless the Company shall have theretofore called all the outstanding
Securities for redemption pursuant to Section 423, 425 or 901, notice of the
occurrence of a Stock Sale shall be given by the Company by first-class mail,
postage prepaid, mailed not less than thirty (30) days after the occurrence of
such Stock Sale to each Holder at his address as it appears on the Security
Register on the date of such notice, but failure to give such notice by mailing
in the manner herein provided to the Holder, or any defect in the notice to any
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities.
All such notices shall state:
(i) the events constituting the Stock Sale;
(ii) the Stock Sale Redemption Date;
(iii) the amount of Available Redemption Proceeds allocable to the
Securities;
(iv) that the redemption price will be one hundred percent (100%) of
the principal amount of the Securities redeemed, plus accrued and unpaid
interest thereon to the Stock Sale Redemption Date;
(v) that on the Stock Sale Redemption Date to the extent the Holder
has elected to have his or her Securities redeemed the redemption price
will become due and payable upon the Securities to be redeemed, and that
interest thereon shall cease to accrue on and after such date;
41
(vi) that the Securities shall be surrendered at the principal office
of the Trustee for payment of the redemption price;
(vii) that a Holder electing to accept the offer and require
redemption of its Securities will be required to deliver the Securities,
with a properly completed Notice of Election, not later than the tenth
(10th) day prior to the Stock Sale Redemption Date; and
(viii) that such Notice of Election shall be irrevocable absent the
written consent of the Company.
Notice of such offer to redeem shall be given by the Company, or by the
Trustee at the Company's request in the name and at the expense of the Company;
provided, that the Trustee receives such request no less than twenty-five (25)
days after the occurrence of a Stock Sale.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to accept the offer and require the redemption of Securities
pursuant to this Section 424.
A Holder electing to accept the offer and require redemption of its
Securities shall make such election by delivering the Securities, with the
Notices of Election properly completed, to the Corporate Trust Office of the
Trustee not later than the tenth (10th) day prior to the Stock Sale Redemption
Date. Such Notice of Election shall be irrevocable absent the written consent of
the Company.
If the Available Redemption Proceeds are insufficient to redeem all of the
Securities with respect to which properly completed and validly executed Notices
of Election shall have been delivered, the Trustee or its agent shall select by
lot or any other appropriate and fair method the Securities to be redeemed as a
whole or in part and the Trustee or its agent shall promptly return all
Securities delivered but not selected for redemption to the registered holder
thereof.
If the principal amount of the Securities delivered, together with properly
completed and validly executed Notices of Election, is less than the Available
Redemption Proceeds, the Company shall be required to redeem only such
Securities so delivered and the Company shall be entitled to retain the
remaining amount of Available Redemption Proceeds.
To the extent redemption of the Securities is required under clause (b) of
the first paragraph of this Section 424, all Available Redemption Proceeds on
the Stock Sale Redemption Date shall be applied by the Trustee to pay one
hundred percent (100%) of the principal amount of, and accrued interest on, the
Securities to be redeemed; provided, that any semi-annual payment of interest
becoming due on the Stock Sale Redemption Date shall be payable to the holder of
such Securities registered as such on the Regular Record Date.
42
The Securities with respect to which Holders shall have elected to accept
the offer and require redemption and which have been selected to be redeemed, as
provided above, shall, on the Stock Sale Redemption Date, become due and payable
at the redemption price set forth above, and from and after such date (unless
the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest. Upon surrender of any Security for
redemption in accordance with any Notice of Election and acceptance of such
Security for redemption, as provided above, such Security shall be redeemed by
the Company at the Redemption Price set forth in this Section 424.
If any Security to be redeemed shall not be so paid upon surrender thereof
for redemption, the principal shall, until paid, bear interest from the Stock
Sale Redemption Date at the rate borne by the Security (including, if
applicable, any increase under Section 503 or 515).
Section 425. Mandatory Redemption Upon Change of Control. Upon the
occurrence of any Change of Control, each Holder shall have the right, at the
Holder's option, to require the Company to redeem all or any portion of such
Holder's Securities at a redemption price equal to one hundred percent (100%) of
the principal amount thereof, together with accrued and unpaid interest thereon
to the Change of Control Redemption Date. The "Change of Control Redemption
Date" shall be the sixty-fifth (65th) day after the date on which a Change of
Control shall have occurred.
Unless the Company shall have therefore called all the outstanding
Securities for redemption pursuant to Section 423, 424 or 901, notice of the
occurrence of a Change of Control shall be given by the Company by first class
mail, postage prepaid, mailed not more than thirty (30) days after the
occurrence of such Change of Control, to each Holder at his address as it
appears on the Security Register on the date of such notice, but failure to give
such notice by mailing in the manner herein provided to the Holder, or any
defect in the notice to any Holder, shall not affect the validity of the
proceedings for the redemption of any other Securities.
All such notices shall state:
(i) the events constituting the Change of Control;
(ii) the Change of Control Redemption Date;
(iii) that the redemption price will be one hundred percent (100%) of
the principal amount of the Securities redeemed, plus accrued and unpaid
interest thereon to the Change of Control Redemption Date;
(iv) that on the Change of Control Redemption Date to the extent the
Holder has elected to have his or her Securities redeemed the redemption
price will become due and payable upon the Securities to be redeemed, and
that interest thereon shall cease to accrue on and after such date;
43
(v) that the Securities shall be surrendered at the principal office
of the Trustee for payment of the redemption price;
(vi) that a Holder electing to accept the offer and require redemption
of its Securities will be required to deliver the Securities, with a
properly completed Notice of Election, not later than the tenth (10th) day
prior to the Change of Control Redemption Date; and
(vii) that such Notice of Election shall be irrevocable absent the
written consent of the Company.
Notice of a Change of Control shall be given by the Company, or by the
Trustee at the Company's request in the name and at the expense of the Company;
provided, that the Trustee receives such request no less than twenty-five (25)
days before the Change of Control Redemption Date.
No failure of the Company to give the foregoing notice shall limit any
Holder's right to accept the offer and require the redemption of Securities
pursuant to this Section 425.
A Holder electing to require redemption of its Securities shall make such
election by delivering the Securities, with the Notices of Election properly
completed, to the Corporate Trust Office of the Trustee not later than the tenth
(10th) day prior to the Change of Control Redemption Date. Such Notice of
Election shall be irrevocable absent the written consent of the Company.
On or before 12:00 noon, Eastern time, on the Business Day immediately
preceding the Change of Control Redemption Date, the Company shall deposit with
the Trustee or Paying Agent an amount of money, in same day available fund,
sufficient to pay one hundred percent (100%) of the principal amount of, and
accrued interest on, all of the Securities with respect to which properly
completed Notices of Election shall have been delivered; provided, that any
semi-annual payment of interest becoming due on the Change of Control Redemption
Date shall be payable to the holder of such Securities registered as such on the
Regular Record Date.
The Securities with respect to which Holders shall have elected to require
redemption, shall, on the Change of Control Redemption Date, become due and
payable at the redemption price set forth above, and from and after such date
(unless the Company shall default in the payment of the Redemption Price) such
Securities shall cease to bear interest. Upon surrender of any Security for
redemption in accordance with any Notice of Election such Security shall be
redeemed by the Company at the Redemption Price.
If any Security to be redeemed shall not be so paid upon surrender thereof
for redemption, the principal shall, until paid, bear interest from the Change
of Control Redemption Date at the rate borne by the Security (including, if
applicable, any increase under Section 503 or 515).
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ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 501. Events of Default.
"Event of Default," wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of (i) any interest on any Security when it
becomes due and payable, and continuance of such default for a period of
three days or (ii) the principal of any Security at its Maturity; provided,
however, a default in the payment of interest with respect to a Security
relating to a payment permitted to be made by issuance of Secondary
Securities in accordance with Section 307 shall constitute an Event of
Default for purposes of this Indenture to the extent that such default
arises from failure to issue such Secondary Securities in the amount, at
the time and in the manner required by Sections 307(a) and (f); or
(b) default in the performance, or breach, of any covenant, obligation
or agreement of the Company or any Guarantor in this Indenture (other than
a covenant, a default in the performance of which or breach of which is
specifically dealt with elsewhere in this Section and except for a default
or breach under Sections 406, 407, 412, 413, 417, 419, 420, 421, 423, 424
or 425) or any Collateral Documents and such default in performance, or
breach, shall continue for a period of 15 days from the earlier of (i)
actual knowledge thereof by an Authorized Officer of the Company, and (ii)
written notice, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by at least the Requisite
Holders, specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(c) default in the performance, or breach, of any covenant, obligation
or agreement of the Company in Sections 406, 407, 412, 413, 417, 419, 420,
421, 423, 424 or 425 of this Indenture or any material breach of a
representation of any Guarantor under any Collateral Documents; or
(d) (i) failure of the Company or any of its Subsidiaries to pay when
due or any default in the payment of any principal or interest on any other
Indebtedness in the outstanding principal amount of $100,000 or more, or in
the payment of any Contingent Obligation the outstanding principal amount
of which is $100,000 or more in each case beyond any period of grace
provided; or (ii) breach or default with respect to any other Indebtedness
the outstanding principal amount of which is $100,000 or more or of any
loan agreement, mortgage, indenture or other material agreement relating
thereto, if such breach or default is not waived within five (5) days after
the occurrence thereof, and if the effect of such default or breach is to
cause, or
45
to permit the holder or holders of that Indebtedness (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness to become or
be declared due prior to its stated maturity (upon the giving or receiving
of notice, lapse of time, both, or otherwise); provided, however, that in
the case of failure or default as described in (i) and (ii) above with
respect to the Securities on the part of any Person, such default shall
constitute an Event of Default hereunder without regard to amount; or
(e) (i) a court shall enter a decree which has not been stayed or
order for relief in respect of the Company or any of its Subsidiaries in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, which decree or order is not stayed
or any other similar relief shall be granted under any applicable federal
or state law; or (ii) an involuntary case is instituted against the Company
or any of its Subsidiaries under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or a decree or order of a
court for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company or any of
its Subsidiaries, or over all or a substantial part of any of their
property, shall have been entered; or the involuntary appointment of an
interim receiver, trustee or other custodian of the Company or any of its
Subsidiaries for all or a substantial part of any of their property; or the
issuance of a warrant of attachment, execution or similar process against
any substantial part of the property of the Company or any of its
Subsidiaries and the continuance of any such events in this clause (ii) for
thirty (30) days unless dismissed, bonded or discharged; or
(f) the Company or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion to an involuntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; the making by the Company or any of its Subsidiaries of any
assignment for the benefit of creditors; or the inability or failure of the
Company or any of its Subsidiaries or the admission by the Company or any
of its Subsidiaries in writing of its inability to pay its debts as such
debts become due; or the board of directors or other governing body of the
Company or any of its Subsidiaries (or any committee thereof) adopts any
resolution or otherwise authorizes action to approve any of the foregoing;
or
(g) any money judgement, writ or warrant of attachment, or similar
process involving in any case an amount in excess of $100,000 not
adequately covered by insurance shall be entered or filed against the
Company or any of its Subsidiaries or any of their respective assets and
shall remain undischarged, unvacated, unbonded or unstayed for a period of
thirty (30) days or in any event later than five (5) days prior to the date
of any proposed sale thereunder; or
46
(h) any order, judgment or decree shall be entered against the Company
or any of its Subsidiaries, decreeing the dissolution or split up of the
Company or that Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of thirty (30) days; or
(i) any Pension Plan maintained by the Company or any of its
respective ERISA Affiliates shall be terminated within the meaning of Title
IV of ERISA or a trustee shall be appointed by an appropriate United States
district court to administer any Pension Plan, or the Pension Benefit
Guaranty Corporation (or any successor thereto) shall institute Proceedings
to terminate any Pension Plan or to appoint a trustee to administer any
Pension Plan if as of the date thereof the Company's liability or any such
ERISA Affiliate's liability (after giving effect to the tax consequences
thereof) to the Pension Benefit Guaranty Corporation (or any successor
thereto) for unfunded guaranteed vested benefits under the Pension Plans
exceeds the then current fair market value of assets accumulated in such
Pension Plan by more than $250,000, in the aggregate (or in the case of a
termination involving the Company or any of its ERISA Affiliates as a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA) the
withdrawing employer's proportionate share of such excess shall exceed such
amount); or
(j) the Company or any of its ERISA Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from
such Multiemployer Plan and the plan sponsor of such Multiemployer Plan
shall have notified such withdrawing employer that such employer has
incurred a withdrawal liability in an annual amount exceeding $100,000; or
(k) this Indenture and the Securities shall be revoked by the Company
or shall cease to be in full force and effect or the protection or security
afforded the Trustee, for the benefit of the Holders, in the Collateral is
thereby in any material respect impaired for any reason; or the Company
shall contest in any manner that this Indenture, the Securities or the
Collateral Documents constitute its valid and enforceable agreements or the
Company shall assert in any manner that it has no further obligation or
liability under such documents; or
(l) any Guaranty shall for any reason cease to be or be revoked or
asserted not to be in full force and effect and enforceable in accordance
with its terms or any security afforded the Trustee, for the benefit of the
Holders, by any Guarantor is in any material respect impaired for any
reason or any Guarantor shall contest in any manner that any Collateral
Document to which it is a party is a valid and enforceable agreement of
such Guarantor, or any Guarantor shall assert in any manner that it has no
further obligation or liability under its Guaranty or the Collateral
Documents.
Upon the occurrence of an Event of Default or a Potential Event of Default, the
Company shall promptly notify in writing the Trustee. Upon receipt of such
notification from the Company or if a Responsible Officer of the Trustee has
actual knowledge of the occurrence of an Event of Default, the Trustee shall
promptly notify the Holders in writing of the
47
occurrence of such Event of Default. The Company shall promptly notify in
writing the Trustee of any Event of Default which has occurred and has continued
uncured for a period of ten (10) calendar days. Upon receipt of such
notification from the Company or if a Responsible Officer of the Trustee has
actual knowledge of the occurrence of an Event of Default that has not been
cured within ten (10) calendar days, the Trustee shall promptly notify the
Holders in writing of such Event of Default.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every such
case, the Trustee or the Requisite Holders may, and the Trustee, upon the
request of the Requisite Holders, shall, declare the unpaid principal of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Requisite Holders) and upon any such
declaration such principal, together with interest accrued thereon, shall become
due and payable; provided that if an Event of Default specified in subsections
501(e) or (f) occurs, then such principal, together with interest accrued
thereon, shall become immediately due and payable without any such declaration
or notice or any other action and references in this Indenture to "declaration
of acceleration" shall include such automatic acceleration.
At any time after such declaration of acceleration has been made and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Requisite Holders, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(a) the Company has paid or irrevocably deposited with the Trustee a
sum sufficient to pay:
(i) all overdue interest on all Securities (or issued Secondary
Securities with respect thereto if theretofore required or permitted by
this Indenture but not yet issued),
(ii) the principal of any Securities which has become due otherwise
than by such declaration of acceleration, together with interest thereon
(without duplication of amounts paid under clause (i) above) from the date
of default at the rate stipulated by Sections 503 and 515,
(iii) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate stipulated by Sections 503 and 515, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
48
(b) all Events of Default, other than the nonpayment of interest on or
principal of Securities (which have become due solely by such declaration
of acceleration), have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of three days, or
(b) default is made in the payment of the principal of any Security at
the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, in cash, the whole amount then due
and payable on such Securities for principal and interest, with interest upon
the overdue principal and, to the extent that payment of such interest shall be
legally enforceable, upon overdue installments of interest, at the rate then
borne by the Securities plus 2.5% per annum; and, in addition thereto, 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 and Requisite Holders, and their respective agents and
counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute
Proceedings for the collection of the sums so due and unpaid and may prosecute
such Proceedings to judgment or final decree, and may enforce the same against
the Company, any Guarantor or any other obligor upon the Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company, any Guarantor or any other obligor upon the
Securities, wherever situated, and the Company shall reimburse and indemnify the
Trustee for any expenses incurred in connection with such Proceedings as
provided in Section 607.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate Proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture or by law.
49
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
Proceeding relative to the Company, a Guarantor or any other obligor upon the
Securities or the property of the Company, of such Guarantor or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(a) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities (including any
interest which, to the extent permitted by law, may accrue subsequent to
the commencement of such Proceeding) and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such Proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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.
In any Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities, and it shall not be necessary to make any Holders of the
Securities parties to any such Proceedings.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any Proceeding relating thereto, and any
such Proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any
50
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be applied as set forth in Section 506.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or interest,
subject to Section 307, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST:To the payment of all taxes, assessments or liens with respect
to the Collateral that are prior to the lien of this Indenture, except
those taxes, assessments or liens as to which any sale of the Collateral
shall have been subject, and to the payment of all costs and expenses of
sale of or other realization upon the Collateral pursuant to the provisions
of this Article, and all expenses, liabilities and advances incurred or
made by the Trustee, or its agents, attorneys and counsel in connection
with the sale or other realization upon the Collateral or otherwise due to
the Trustee pursuant to Section 607;
SECOND: To the payment of amounts then due and unpaid on the
Outstanding Securities for interest (including Secondary Securities issued
with respect thereto), pro rata, without preference or priority of any
kind, according to the amounts due and payable on such Securities with
respect to interest;
THIRD: To the payment of principal of the Outstanding Securities, pro
rata, without preference or priority of any kind, according to the amounts
due and payable on the Securities with respect to principal;
FOURTH: The balance, if any, to the Person or Persons entitled
thereto. Section 507.Limitation on Suits.
No Holder of any Securities shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) Requisite Holders shall have made written request to the Trustee
to institute Proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
51
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for fifteen (15) days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
Proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such fifteen (15) day period by Requisite Holders;
it being understood and intended that no one or more Holders shall have any
right in any manner whatsoever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of Securities.
In the event the Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders of Securities, each
representing less than Requisite Holders, the Trustee in its sole discretion may
determine what action, if any, shall be taken. In such event, the Trustee shall
give written notice of such conflicting or inconsistent requests to the Holders.
Section 508. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right on the terms stated herein, which is absolute and
unconditional, to receive payment of the principal of and interest on such
Security on the respective Stated Maturities, subject to the grace periods
provided in Section 501(a), expressed in such Security and this Indenture (or,
in the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Guarantors, the
Trustee and the Holders shall, subject to any determination in such Proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such Proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as provided in Section 305, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy. The Company acknowledges and agrees that no adequate remedy at
law exists for breach of its obligations under Article Four. In the event that
the Company fails to comply with the terms of the provisions set forth in said
Article, Requisite Holders shall have the right to obtain specific performance
of the Company's obligations pursuant to said Article.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 512. Control by Holders.
Requisite Holders shall have the right to direct the time, method and place
of conducting any Proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee (including directing the
Trustee to engage counsel of such Holders' choice at the direction of such
Holders), provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
Prior to the time a judgment or decree for payment of the money due has
been obtained by the Trustee as provided in this Article, Requisite Holders may,
on behalf of the Holders of all the Securities, waive any past Event of Default
hereunder and its consequences, except an Event of Default
(a) in the payment of the principal of or interest on any Security,
excluding principal or interest which has become due as a result of
acceleration, or
53
(b) in respect of a covenant or provision hereof which under Article
Eight cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture and the Company, the Guarantors, the Trustee and the Holders
shall be restored to their former positions and rights hereunder; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by its
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% of the Aggregate Outstanding Amount of Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after any Redemption Date).
Section 515. Remedies.
(a) If an Event of Default shall have occurred and be continuing, and
the Securities have been declared due and payable and such declaration and
its consequences have not been rescinded and annulled, the Trustee may do
one or more of the following:
(i) institute Proceedings for the collection of all amounts then
payable on the Securities or under this Indenture, whether by declaration
or otherwise, enforce any judgment obtained, and collect from the Company
or any Guarantor monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of the Lien of this Indenture with respect to the
Collateral; or
(iii) exercise any remedies of a secured party under the UCC and,
subject to the UCC, this Indenture and the Collateral Documents, take any
other appropriate action to protect and enforce the rights and remedies of
the Trustee or the Holders of the Securities hereunder.
54
(b) If an Event of Default as described in Section 501(b) or (c) hereof
shall have occurred and be continuing, the Trustee may, and at the request of
the Requisite Holders shall, institute a Proceeding solely to compel performance
of the covenant or agreement or to cure the representation or warranty, the
breach of which gave rise to the Event of Default under such Section; the
Trustee may enforce any equitable decree or order arising from such Proceeding.
(c) Upon the occurrence and during the continuance of an Event of Default,
the interest rate payable with respect to the outstanding principal amount of
the Securities (including Secondary Securities), and interest payments thereon
not paid when due, shall be increased to a rate which is 2.5% per annum in
excess of the rate of interest otherwise payable with respect to such
Securities, which increment shall be paid solely in cash.
Section 516. Action on Securities.
The Trustee's right to seek and recover judgment on the Securities or under
this Indenture shall not be affected by the seeking or obtaining of or
application for any other relief under or with respect to this Indenture or any
Collateral Documents. Neither the Lien under the Collateral Documents nor any
rights or remedies of the Trustee or the Holders shall be impaired by the
recovery of any judgment by the Trustee against the Company or any Guarantor or
by the levy of any execution under such judgment upon any portion of the
Collateral or upon any of the assets of the Company or any Guarantor.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The Trustee, for itself and its successors, hereby accepts the trusts
created by this Indenture upon the terms and conditions set forth herein,
including the terms and conditions set forth in this Section 601.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee,
55
the Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Indenture.
(b) In case 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.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this subsection (c) shall not be construed to limit the effect of
subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Requisite Holders (or such lesser percentage as may be herein
specified with respect thereto) relating to the time, method and place of
conducting any Proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Indenture and the Trustee shall act in accordance with the instructions of
the Requisite Holders; and
(iv) 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 in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 602. Notice of Defaults.
Within five (5) Business Days after the occurrence of any Event of Default
hereunder, the Trustee shall transmit by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the Security Register, notice
of such default actually known to the Trustee, unless such default shall have
been cured or waived. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties or, in the case of cables,
telecopies and telexes, to have been sent by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with independent counsel, accountants or
other experts in connection with the fulfillment of its duties hereunder,
and the Trustee shall be entitled to rely on the written opinion of such
counsel, accountants or other experts in connection with any action taken,
omitted to be taken or suffered by the Trustee in fulfilling its duties
hereunder. The Trustee shall have the right at any time to seek
instructions concerning the administration of this Indenture from any court
of competent jurisdiction;
(e) the Trustee shall be under no obligation to take any action or
omit to take any action 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 the Trustee shall have been provided
adequate security and indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction,
including such reasonable advances as may be requested by the Trustee;
(f) 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-in-fact; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys-in-
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fact and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney-in-fact appointed with due
care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication in the form set forth in Exhibit A to this
Indenture, shall be taken as the statements of the Company, and the Trustee
shall not be responsible in any manner whatsoever for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of any Securities or the proceeds thereof[, except
that the Trustee represents that it is duly authorized to execute and deliver
this Indenture, authenticate the Securities and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility on
Form T-1 supplied to the Company are true and accurate, subject to the
qualifications set forth therein.]
Section 605. May Hold Securities.
The Trustee, any Paying Agent, Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, and, subject to Sections 608 and 612, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such other agent.
Section 606. Money Held in Trust.
Except as otherwise expressly provided herein, money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder.
Section 607. Compensation and Reimbursement.
The Company agrees
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents, attorneys-in-fact and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
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(c) to indemnify the Trustee (in its individual capacity and as
Trustee) and each of its officers, directors, attorneys-in-fact and agents
for, and to hold each of such Persons harmless against, any loss, liability
or expense incurred without negligence or bad faith on such Person's part,
arising out of or in connection with the acceptance or administration of
this Indenture, including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of the Trustee's powers or duties hereunder (if incurred
without gross negligence or bad faith).
Section 608. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of Section 310(a)(1) of the Trust Indenture Act. The Trustee shall have a
combined capital and surplus of at least $500,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with
Section 310(b) of the Trust Indenture Act. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
Section 609. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 610.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 45 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Requisite
Holders, delivered to the Trustee and to the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608 after written request
therefor by the Company or by any Holder, or
(ii) the Trustee shall cease to be eligible under Section 608 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(iii) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property of affairs for the purpose or rehabilitation, conservation or
liquidation,
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then, in any case, (i) the Company by a Company Order may remove the Trustee, or
(ii) subject to Section 514, any Holder may, on behalf of itself and all other
similarly situated Holders, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Company Order, shall promptly appoint a successor Trustee. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Requisite Holders
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with Section 610, become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have been so
appointed by the Company or the Holders of the Securities and accepted
appointment in the manner hereinafter provided, any Holder may, subject to
Section 514, on behalf of itself and all other similarly situated Holders,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
Section 610. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 611. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or
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consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such successor corporation
shall give written notice to the Company, in the manner provided for in Section
105(b), that it is the successor by merger, conversion or consolidation, as the
case may be, to the Trustee, such notice to specify the new name and address, if
applicable, of such successor corporation. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
Section 612. Preferential Collection of Claims Against Company.
The Trustee shall be subject to Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act.
Section 613. Co-Trustees and Separate Trustee.
At any time or times, (i) for the purpose of meeting the legal requirements
of any jurisdiction in which any part of the Collateral may at the time be
located, or (ii) if the Trustee deems it to be necessary to protect the
interests of the Holders of the Securities, the Company and the Trustee shall
have power to appoint, and upon the written request of the Trustee or of the
Holders of Securities representing at least 25% of the Aggregate Outstanding
Amount of Securities, the Company shall for such purpose join with the Trustee
in the execution, delivery and performance of all instruments and agreements
necessary or proper to appoint, one or more Persons (who shall not be Holders)
approved by the Trustee either to act as co-trustee, jointly with the Trustee,
with respect to the Collateral and the grant of a security interest and Lien
thereon, or to act as separate trustee in connection therewith, in either case
with such powers as may be provided in the instrument of appointment which shall
expressly designate the property affected and the capacity of the appointee as
either a co-trustee or separate trustee, and to vest in such Person or Persons
in the capacity aforesaid, any property, title, right or power deemed necessary
or desirable, subject to the other provisions of this Section. If the Company
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default has occurred and is continuing,
the Trustee alone shall have power to make such appointment.
Should any written instrument from the Company be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Company.
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Every co-trustee or separate trustee shall, to the extent permitted by law,
but only to such extent, be appointed subject to the following terms:
(a) the Securities shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the custody
of cash held by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee;
(b) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by the
appointment of a co-trustee or separate trustee shall be conferred or
imposed upon and exercised or performed by the Trustee or by the Trustee
and such co-trustee or separate trustee jointly, as shall be provided in
the instrument appointing such co-trustee or separate trustee, except to
the extent that under any law of any jurisdiction in which any particular
act is to be performed, the Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee;
(c) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Company evidenced by a Company Order, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 613, and in case an Event of Default has
occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Company. Upon the written request of the Trustee,
the Company shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal; a successor to any co-trustee or
separate trustee which has resigned or has been removed may be appointed in
the manner provided in this Section 613;
(d) no co-trustee or separate trustee hereunder shall be personally
liable solely by reason of any act or omission of the Trustee, or any other
such trustee hereunder;
(e) the Trustee shall not be liable solely by reason of any act or
omission of a co-trustee or separate trustee selected, if selected by the
Trustee with due care; and
(f) any Act of Holders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than five (5) days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request in
writing, within thirty (30) days after receipt by the Company of any such
request, a list in similar form and content as of a date not more than
fifteen (15) days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) If any Holder (hereinafter referred to as "applicant") applies in
writing to the Trustee, and furnishes to the Trustee reasonable proof that such
applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicant desires
to communicate with other Holders with respect to their rights under this
Indenture or under the Securities and is accompanied by a copy of the form of
proxy or other communication which such applicant proposes to transmit, then the
Trustee shall, within five (5) Business Days after the receipt of such
application, at its election, either
(i) afford such applicant access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicant as to the approximate number of Holders
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicant access to such
information, the Trustee shall, upon the written request of such applicant, mail
to each Holder whose name and address appear in the information preserved at the
time by the Trustee in accordance with Section 702(a), a copy of the form of
proxy or other
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communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five (5) days after such tender, the Trustee shall mail to such applicant and
file with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interests of the Holders or would be in
violation of applicable law. Such written statement shall specify the basis of
such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender, otherwise the Trustee shall be
relieved of any obligation or duty to such applicant respecting its application.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of the Holders in accordance with Section 702(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 702(b).
Section 703. Reports by Trustee.
(a) The term "reporting date," as used in this Section, means ____. Within
sixty (60) days after the reporting date of each year commencing in calendar
year 1998, the Trustee shall transmit by first-class mail, postage prepaid, to
all Holders as their names and addresses appear in the Security Register, a
brief report dated as of the reporting date with respect to:
(i) its eligibility and qualifications under Section 608, or in lieu
thereof, if to the best of its knowledge it has continued to be eligible
and qualified under said Section, a written statement to such effect;
(ii) the character and amount of any advances (and the circumstances
surrounding the making thereof) made by the Trustee (as such) which remain
unpaid on the date of such report, and for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Securities, on
any property or funds held or collected by it as Trustee;
(iii) the amount, interest rate and maturity date of all other
Indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a
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creditor relationship arising in any manner described in Section 311(b)(2),
(3), (4) or (6) of the Trust Indenture Act;
(iv) the property and funds of the Company or any Guarantor, if any,
physically in the possession of the Trustee as such on the date of such
report;
(v) any additional issue of Securities which the Trustee has not
previously reported; and
(vi) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities.
(b) A copy of each such report shall, at the time of such transmission to
the Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and also with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 801. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, the Guarantors and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(b) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that, in each case, such
provisions shall not adversely affect the interests of the Holders in any
material respect; or
(c) to further secure the Securities; or
(d) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted, and to add to this Indenture such other
provisions as may be expressly permitted by the Trust Indenture Act,
excluding, however, the provisions referred to in Section 316(a)(2) of the
Trust Indenture Act as in effect at the date as of which this Indenture was
65
executed or any corresponding provision provided for in any similar federal
statute hereafter enacted; or
(e) to evidence the succession of another Person to the Company
permitted hereunder and the assumption by such successor of the obligations
of the Company hereunder and under the Collateral Documents.
Section 802. Supplemental Indentures with Consent of Holders.
With the consent of the Requisite Holders, by Act of said Holders delivered
to the Company, the Guarantors and the Trustee, the Company and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of all Outstanding
Securities:
(a) extend the Stated Maturity of the principal of, or of any
installment of interest on, any Security, or reduce the principal amount
thereof or the Interest Rate thereon, or change the provisions of this
Indenture relating to the application of proceeds of the Collateral to the
payment of principal of or interest on the Securities or change any place
where, or the manner in which, any Security or the interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment after the Stated Maturity thereof (or, in the case of
redemption, on or after any Redemption Date); or
(b) reduce the percentage of the Aggregate Outstanding Amount of
Securities, the consent of whose Holders is required for any such
supplemental indenture, or whose consent is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture; or
(c) release, impair or adversely affect all or substantially all of
Collateral; or
(d) except as provided herein, permit the creation of any lien ranking
prior to or on a parity with the lien of this Indenture with respect to any
part of the Collateral or terminate the Lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Security
of the security afforded by the Lien of this Indenture; or
(e) change the percentage of the Aggregate Outstanding Amount of
Securities, the consent of whose Holders is required pursuant to Sections
502, 510, 512 or 515(b); or
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(f) modify, directly or indirectly, the definition of the terms
"Aggregate Outstanding Amount," "Requisite Holders" and "Outstanding"; or
(g) modify any of the provisions of this Section, Section 801 or
Section 513, except to increase any such percentage or to provide that
certain or other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Security affected thereby; or
(h) modify any of the provisions of Sections 501(d), 508 or 904. It
shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to this Section 802, the Trustee shall mail to
the Holders at their respective addresses set forth on the Security Register, a
notice setting forth in general the terms and substance of such supplemental
indenture. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Any solicitation of Holders of the Securities to any consent, waiver or
amendment under this Indenture involving consideration (whether in connection
with a sale of Securities to the Company or any of its Affiliates or not) shall
provide that such consideration be paid equally to all Holders of Securities
regardless of whether or not such Holders agree to such consent, waiver or
amendment.
Section 803. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 804. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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Section 805. Conformity with Trust Indenture Act.
From such time as the Trust Indenture Act is applicable hereto, every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
Section 806. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE NINE
REDEMPTION OF SECURITIES
Section 901. Voluntary Redemption.
The Securities may be redeemed at the election of the Company, at any time
after the Closing Date, as a whole or from time to time in part, subject to the
conditions and at the Redemption Prices specified in the form of Security,
together in each case with accrued and unpaid interest to the Redemption Date.
Except upon the occurrence of (a) an Asset Sale and the redemption of Securities
from Net Proceeds of Asset Sale pursuant to Section 423, (b) a Stock Sale and
the redemption of Securities from Stock Sale Proceeds pursuant to Section 424 or
(c) a Change of Control and the redemption of Securities pursuant to Section
425, the Redemption Price shall be equal to one hundred and one percent (101%)
of the principal amount of the Securities so redeemed.
Section 902. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
Section 903. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section
901 shall be evidenced by a Company Order. In case of any redemption at the
election of the Company, the Company shall, at least sixty (60) days prior to
the Redemption Date fixed by the Company (unless a shorter notice period shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed.
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Section 904. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than
sixty (60) days prior to the Redemption Date by the Trustee, from the
Outstanding Securities not previously called for redemption, by lot or any other
appropriate and fair method, and the amounts to be redeemed may be equal to
$5,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and each Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
Section 905. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than thirty (30) nor more than sixty (60) days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his, her or its
address appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification (and, in the case of a Security to be redeemed in part, the
principal amount) of the particular Securities to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
thereon shall cease to accrue on and after said date; and
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
69
Section 906. Deposit of Redemption Price.
On or before 12:00 noon on the Business Day immediately preceding any
Redemption Date, the Company shall deposit with the Trustee or with the Paying
Agent an amount of money in same day funds sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities or portions thereof which are to be
redeemed on that date.
Section 907. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid on any
Redemption Date, the principal and interest then due in respect thereof shall,
until paid, bear interest from the Redemption Date at the rate specified in
Section 503.
Section 908. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 402 (with, if the Company, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Security Registrar or the Trustee duly executed
by, the Holder thereof or its attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities, of
any authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TEN
GUARANTY OF SECURITIES
Section 1001. Guaranty.
Subject to the provisions of this Article Ten, each Guarantor hereby
unconditionally guarantees to the Trustee and to each Holder of a Security
authenticated and
70
delivered by the Trustee (i) the due and punctual payment of the principal of,
premium, if any, and interest on such Security, when and as the same shall
become due and payable, whether at maturity, by acceleration, declaration or
otherwise, the due and punctual payment of interest on the overdue principal of
premium, if any, and interest on the Securities, to the extent lawful, and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms of such Security and of
this Indenture, and (ii) in the case of any extension of time of payment or
renewal of any Securities or any of such other obligations, that the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, at stated maturity, by acceleration, declaration or
otherwise.
The Guarantors hereby agree that their obligations hereunder shall be
absolute and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any such Security or this
Indenture, any failure to enforce the provisions of any such Security or this
Indenture, any waiver, modification or indulgence granted to the Company with
respect thereto, by the Holder of such Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of
surety or guarantor. The Guarantors hereby waive diligence, presentment, filing
or claims with a court in the event of merger or bankruptcy of the Company, any
right to require proceeding filed against the Company, the benefit of
discussion, protest or notice with respect to any such Security or the
Indebtedness evidenced thereby and all demands whatsoever (except as specified
above), and covenant that this Guaranty will not be discharged as to any such
Security except by payment in full of the principal thereof, premium, if any,
and interest thereon. Each Guarantor further agrees that as between such
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(i) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Five hereof for the purposes of this Guaranty,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (ii) in the
event of any declaration of acceleration of such obligations as provided in
Article Five hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by each Guarantor for the purpose of this
Guaranty. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article Five, the Trustee may make a
demand for payment on the Securities under each or any Guaranty provided for in
this Article Ten and not discharged.
Section 1002. Obligations Joint and Several.
The obligations of each Guarantor hereunder shall be joint and several.
Section 1003. Validity Subject to Authentication.
The Guaranties set forth in Sections 1001 and 1002 shall not be valid or
become obligatory for any purpose with respect to a Security until the
certificate of authentication on such Security shall have been signed by the
Trustee.
71
Section 1004. Guaranties Not Fraudulent Transfers or Conveyances.
Each Guarantor hereby, and each beneficiary under this Guaranty by
accepting the benefits hereof, confirms that it is its intention that the
guaranty by each Guarantor pursuant to this Guaranty shall not constitute a
fraudulent transfer or conveyance for purposes of any applicable provisions of
Title 11 of the United States Code, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal (whether of the United
States, Canada or the United Kingdom) state or provincial law applicable to such
Guarantor. [To effectuate the foregoing intent, the obligations of each
Guarantor under this Guaranty shall be limited to such maximum amount as will,
after giving effect to such maximum amount and all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under such laws, and after
giving effect to any rights to contribution of such Guarantor pursuant to any
agreement providing for an equitable distribution among such Guarantor and other
Affiliates of the Company of payments made under guaranties by such parties,
result in the obligations of such Guarantor in respect of such maximum amount
not constituting a fraudulent transfer or conveyance.]
Section 1005. Obligations of the Guarantors Unconditional.
Nothing contained in this Article Ten or elsewhere in this Indenture or in
any Security is intended to or shall impair, as between the Guarantors and the
Holders, the obligation of the Guarantors, which is absolute and unconditional,
to pay to the Holders the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
the provisions of this Guaranty, or is intended to or shall affect the relative
rights of the Holders and creditors of the Guarantors, nor shall anything herein
or therein prevent the Trustee or any Holder from exercising all remedies
otherwise permitted by applicable law or this Indenture.
The failure to make a payment on account of principal of, premium, if any,
or interest on the Securities by reason of any provision of this Article Ten
shall not be construed as preventing the occurrence of an Event of Default under
Section 501.
Section 1006. Release of a Guarantor.
Upon the sale or disposition (by merger or otherwise) of a Guarantor by the
Company to an entity which is not an Affiliate of the Company or any of its
Subsidiaries and which sale or disposition is otherwise in compliance with the
terms of this Indenture, that Guarantor shall be deemed released from all
obligations under this Article Ten without any further action required on the
part of the Trustee or any Holder. At the request of the Company, however, the
Trustee shall execute and deliver an appropriate instrument evidencing such
release. Any Guarantor not so released remains liable for the full amount of
principal of, premium, if any, and interest on the Securities as provided in
this Article Ten.
72
Section 1007. Execution of Guaranties.
To evidence this Guaranty to the Holders specified in Sections 1001 and
1002, the Guarantors hereby agree to execute a Guaranty in substantially the
form above recited to be endorsed on each Security authenticated and delivered
by the Trustee. Each Guarantor hereby agrees that its Guaranty set forth in
Section 1001 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guaranty. Each such Guaranty
shall be signed on behalf of each Guarantor by its Chairman of the Board,
President or a Vice President, 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
Guaranty on behalf of such Guarantor. Such signatures upon the Guaranty may be
manual or facsimile signatures of the present, past or any future such officers
and may be imprinted or otherwise reproduced on the Guaranty, and in case any
such officer who shall have signed the Guaranty shall cease to be such officer
before the Security on which such Guaranty 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 Guaranty had not ceased to be such officer of
the Guarantor.
Section 1008. Guarantors May Consolidate, Etc., on Certain Terms.
Nothing contained in this Article Ten shall prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor or shall
prevent any sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety, to the Company or shall prevent any dissolution of
a Guarantor by the Company; provided, that such consolidated merger, sale,
conveyance or dissolution is otherwise permitted pursuant to the terms of this
Indenture. Upon any such consolidation, merger, sale, conveyance or
dissolutions, the Guaranty given by such Guarantor shall no longer have any
force or effect.
Section 1009. 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 such Guarantor (a "Funding Guarantor") under this
Guaranty, that Funding Guarantor shall be entitled to a contribution from all
other Guarantors for all payments, damages and expenses incurred by that Funding
Guarantor in discharging the Company's obligations with respect to the
Securities.
Section 1010. Subrogation Rights of the Guarantors.
The Guarantors shall be subrogated to all rights of any and all Holders
against the Company in respect of any amounts paid to the Holders by the
Guarantors pursuant to the provisions of this Guaranty; provided, that the
Guarantors shall not be entitled to enforce, or to receive any payments arising
out of or based upon such right of subrogation, until the principal of, premium,
if any, and interest on all the Securities shall have been paid in full.
73
ARTICLE ELEVEN
COLLATERAL AND SECURITY AGREEMENTS
Section 1101. Collateral Documents.
The due and punctual payment of the principal of, premium, if any, and
accrued but unpaid interest on the Securities when and as the same shall be due
and payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue amount of the
interest (to the extent permitted by law), if any, on the Securities and
performance of all other obligations of the Company and any Guarantor to the
Holders or the Trustee under this Indenture and the Securities, according to the
terms hereunder or thereunder, shall be secured as provided in the Collateral
Documents, subject to the Intercreditor Agreement. Each Holder, by its
acceptance of a Security, consents and agrees to the terms of the Collateral
Documents and the Intercreditor Agreement (including, without limitation, the
provisions providing for foreclosure and release of Collateral) as the same may
be in effect or may be amended from time to time in accordance with the terms
thereof and hereof, and authorizes and directs the Trustee to enter into each of
the Collateral Documents and the Intercreditor Agreement and to perform its
respective obligations and exercise its respective rights thereunder in
accordance therewith. The Company and the Guarantors will do or cause to be done
all such acts and things as may be necessary or proper, or as may be required by
the provisions of the Collateral Documents, to assure and confirm to the Trustee
the security interests in and Liens upon the Collateral contemplated hereby and
by the Collateral Documents including, in all property (real, personal and
mixed) of the Company and the Guarantors acquired after the Securities are
issued, as from time to time constituted, so as to render the same available for
the security and benefit of this Indenture and of the Securities secured hereby,
according to the intent and purposes herein expressed. The Company and each
Guarantor shall take, upon request of the Trustee, any and all actions
reasonably required to cause the Collateral Documents to create and maintain, as
security for the obligations of the Company and the Guarantors under this
Indenture and the Securities, valid and enforceable, perfected (except as
expressly provided therein) Liens in and on all of the Collateral and such real
property, in favor of the Trustee, for the benefit of the Holders, superior to
and prior to the rights of all third persons and subject to no other Liens,
other than as specifically permitted herein and therein.
Section 1102. Recording and Opinions.
(a) The Company shall furnish to the Trustee promptly after the execution
and delivery of this Indenture an Opinion of Counsel either (i) stating that in
the opinion of such counsel all action has been taken with respect to the
recording, registering and filing of this Indenture, financing statements or
other instruments necessary to make effective the Liens intended to be created
by the Collateral Documents, and reciting the details of such action or (ii)
stating that, in the opinion of such counsel, no such action is necessary to
make such Liens effective.
74
(b) The Company shall furnish to the Trustee within three (3) months after
each anniversary of the date of this Indenture, an Opinion of Counsel, dated as
of such date, stating either that (i) in the opinion of such counsel, all action
has been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of this Indenture, all supplemental indentures,
financing statements, continuation statements or other instruments of further
assurance as is necessary to maintain the Liens of the Collateral Documents and
reciting the details of such action or (ii) in the opinion of such Counsel, no
such action is necessary to maintain such Liens.
Section 1103. Release of Collateral.
(a) Subject to subsections (b) and (c) of this Section 1103, Collateral may
be released from the Lien and security interest created by the Collateral
Documents at any time or from time to time at the sole cost and expense of the
Company (i) upon payment in full of the Securities in accordance with the terms
thereof and of this Indenture and all other obligations of the Company and the
Guarantors then due and owing under this Indenture, the Securities and the
Collateral Documents; (ii) upon the sale or other disposition of such Collateral
constituting an Asset Sale if such sale or other disposition is not prohibited
under this Indenture and if the Net Cash Proceeds of Asset Sale are applied in
accordance with this Indenture; (iii) upon the sale or other disposition of such
Collateral not constituting an Asset Sale pursuant to the terms of this
Indenture; (iv) upon the substitution or replacement of such Collateral with new
Collateral, provided that the Company grants to the Trustee a security interest
and Lien in such new Collateral and executes all Collateral Documents necessary
to perfect such security interest and Lien; and (v) to the extent a Lien is
granted on such Collateral and the Purchase Money Indebtedness secured thereby
constitutes not less than 75% of the purchase price of the property subject to
such Lien. Upon compliance with above provisions and the provisions of Section
1104 hereof, the Trustee shall execute, deliver or acknowledge any necessary or
proper instruments of termination, satisfaction or release provided by or on
behalf of the Company to evidence the release of any Collateral permitted to be
released pursuant to this Indenture or the Collateral Documents.
(b) Except as otherwise provided in the Intercreditor Agreement, at any
time when a Potential Event of Default or Event of Default shall have occurred
and be continuing and the maturity of the Securities shall have been accelerated
(whether by declaration or otherwise) and the Trustee shall have delivered a
notice of acceleration to the Company, no release of Collateral pursuant hereto
shall be effective as against the Trustee or the Holders.
(c) The release of any Collateral from the terms hereof and of the
Collateral Documents will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the Collateral Documents. The Trustee and
each of the Holders acknowledge that a release of Collateral in accordance with
the terms of the Collateral Documents will not be deemed for any purpose to be
an impairment of the security under this Indenture.
75
Section 1104. Certificates of the Issuer.
To the extent applicable the Company and the Guarantors shall comply with
(a) Section 314(b) of the Trust Indenture Act, relating to the Opinions of
Counsel regarding the Lien of the Collateral Documents, and (b) Section 314(d)
of the Trust Indenture Act, relating to the release of Collateral from the Lien
of the Collateral Documents and Officers' Certificates or other documents
regarding fair value of the Collateral. Any certificate or opinion required by
Section 314(d) of the Trust Indenture Act may be made by an officer of the
Company or any other obligor upon the Securities, as applicable, to the extent
permitted by Section 314(d) of the Trust Indenture Act.
Section 1105. Authorization of Actions to be Taken by
the Trustee Under the Collateral Documents
Each Holder, by acceptance of a Security, consents and agrees to the terms
of the Intercreditor Agreement as the same may be in effect or may be amended
from time to time in accordance with the terms thereof and hereof and authorizes
and directs the Trustee to enter into the Intercreditor Agreement and to perform
its respective obligations and exercise its respective rights thereunder in
accordance therewith. The Trustee may, in its sole discretion and without the
consent of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of the
Collateral Documents and the Intercreditor Agreement and (b) collect and receive
any and all amounts payable in respect of the obligations of the Company and the
Guarantors hereunder. The Trustee shall have the power to institute and to
maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Collateral Documents, the Intercreditor Agreement or this Indenture, and
such suits and proceedings as the Trustee may deem expedient to preserve or
protect its interests and the interests of the Holders in the Collateral
(including power to institute and maintain suits or proceedings to restrain the
enforcement of or compliance with any legislative or other governmental
enactment, rule or order that may be unconstitutional or otherwise invalid if
the enforcement of, or compliance with, such enactment, rule or order would
impair the security interest hereunder or be prejudicial to the interests of the
Holders or of the Trustee). Subject to the limitations set forth in Section 802
hereof, the Trustee shall act, make elections or vote as directed by Requisite
Holders and all of the Holders shall be bound by such direction.
Section 1106. Authorization of Receipt of Funds by the
Trustee Under the Collateral Documents
and the Intercreditor Agreement
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Collateral Documents and the Intercreditor
Agreement, and to make further distributions of such funds to the Holders
according to the provisions of this Indenture and the Collateral Documents.
76
This Indenture may be signed in counterparts with the same effect as if the
signatures to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this Indenture.
IN WITNESS WHEREOF, we have set our hands as of the day and year first
above written.
SLM INTERNATIONAL, INC.,
as Issuer
By:_____________________________
Name:
Title:
S-1
SPORT MASKA INC.,
as Guarantor
By:____________________________
Name:
Title:
MASKA U.S., INC.,
as Guarantor
By:____________________________
Name:
Title:
#1 APPAREL, INC.,
as Guarantor
By:____________________________
Name:
Title:
#1 APPAREL CANADA INC.,
as Guarantor
By:____________________________
Name:
Title:
ST. XXXXXXXX MANUFACTURING
CANADA INC.,
as Guarantor
By:____________________________
Name:
Title:
S-2
SLM TRADEMARK ACQUISITION, INC.
as Guarantor
By:____________________________
Name:
Title:
SLM TRADEMARK ACQUISITION CANADA
CORPORATION,
as Guarantor
By:____________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:_____________________________
Name:
Title:
S-3
EXHIBIT A
(FACE OF SECURITY)
THIS SECURITY AND THE PAYMENT HEREOF ARE SUBJECT TO AND GOVERNED BY
THE TERMS OF THAT CERTAIN SENIOR SECURED NOTE INDENTURE, DATED AS OF
MARCH __, 1997, BY AND BETWEEN SLM
INTERNATIONAL, INC., THE GUARANTORS NAMED THEREIN AND
THE TRUSTEE NAMED THEREIN. THE PROVISIONS OF SUCH SENIOR
SECURED NOTE INDENTURE ARE INCORPORATED HEREIN BY THIS
REFERENCE AND MADE A PART HEREOF. RIGHTS WITH RESPECT TO,
AMONG OTHER THINGS, PRIORITY OF PAYMENT AND COLLATERAL WITH
RESPECT TO THIS SECURITY ARE SUBJECT TO AND GOVERNED BY THE
TERMS OF AN INTERCREDITOR AGREEMENT, DATED MARCH __, 1997,
BY AND AMONG SLM INTERNATIONAL, INC., THE GUARANTORS, THE
TRUSTEE AND THE CHASE MANHATTAN BANK, AS AGENT
SLM INTERNATIONAL, INC.
SENIOR SECURED NOTE
DUE April 1, 2004
No. ______ $_________
SLM INTERNATIONAL, INC., a Delaware corporation (herein called the
"Company," which term includes any successor under the Indenture hereinafter
referred to), for value received, hereby promises to pay
to______________________________________
_______________________________________________________________
or registered assigns, the principal sum of ___________________
_______________________________________________________________ Dollars when and
as due under the terms of this Security and the Indenture, in the manner
referred to below, and to pay interest prior to default thereon from the later
of the date hereof or the most recent date through which interest has been paid
hereon at an initial Interest Rate (prior to default) equal to 14% per annum,
payable in cash or, at the Company's option, up to 4% per annum in Secondary
Securities (as hereinafter defined); provided further that, with respect to the
payment due on the first Interest Payment Date, the Company may, at its option,
pay all interest accrued through that date in Secondary Securities.
Notwithstanding anything to the contrary in the preceding sentence, so long as
no Potential Event of Default or Event of Default shall have occurred and be
continuing:
(a) the Interest Rate (prior to default) on the Securities shall be
permanently reduced to 12% per annum, payable in cash or, at the Company's
option, up to 2% per annum in Secondary Securities, upon the delivery by
the Company to the Trustee of (i) financial statements demonstrating that
Consolidated EBITDA for the immediately preceding four consecutive Fiscal
Quarters of the
A-1
Company was not less than $18,000,000, (ii) an Officers Certificate, and
(iii) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee, such reduction in the Interest Rate (prior to default) on
the Securities to be effective as of the commencement of the next
succeeding Interest Accrual Period that commences at least thirty days
after the date on which such financial statements have been (1) delivered
to the Trustee and (2) filed with the Commission or any governmental
authority succeeding to its functions; and
(b) the Interest Rate (prior to default) on the Securities shall be
permanently reduced to 10% per annum payable in cash, upon the delivery by
the Company to the Trustee of (i) financial statements demonstrating that
Consolidated EBITDA for the immediately preceding four consecutive Fiscal
Quarters of the Company was not less than $25,000,000, (ii) an Officers
Certificate, and (iii) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee, such reduction in the Interest Rate
(prior to default) on the Securities to be effective as of the commencement
of the next succeeding Interest Accrual Period that commences at least
thirty days after the date on which such financial statements have been (1)
delivered to the Trustee and (2) filed with the Commission or any
governmental authority succeeding to its functions.
Upon the occurrence of any event which would result in a reduction of the
Interest Rate in accordance with the foregoing, the Trustee shall give prompt
written notice to all Holders of such occurrence, and that the Interest Rate
will be reduced and the effective date thereof. The Interest Rate in effect with
respect to the Securities is subject to increase as provided in Sections 503 and
515 of the Indenture, any such increase to be paid solely in cash. Upon the
occurrence and during the continuance of any Payment Default, Bankruptcy Default
or any default pursuant to Section 501(c) of the Indenture, all interest accrued
thereafter and during the period in which the Payment Default, Bankruptcy
Default or any default pursuant to Section 501(c) of the Indenture has continued
shall be payable solely in cash, and no portion thereof may be paid in Secondary
Securities. Each issuance of Secondary Securities in lieu of the payment of
interest in cash on the Securities shall be made pro rata with respect to the
Outstanding Securities; provided further, that the Company may at its option pay
cash in lieu of issuing Secondary Securities. Any such Secondary Securities
shall be governed by the Indenture and shall be identical in all respects to the
Securities initially issued (except, as the case may be, with respect to the
title, issuance date and aggregate principal amount). As used herein, "Secondary
Securities" means an additional Security with a principal amount equal to the
accrued but unpaid interest, which shall be governed by the Indenture and which
shall be identical in all respects to this Security (except, as the case may be,
with respect to the title, issuance date and aggregate principal amount).
The principal amount of this Security will be due and payable in
semi-annual installments in accordance with the following schedule:
A-2
Scheduled Outstanding Principal
Principal Payment Date to be Repaid
---------------------- ----------------------
October 1, 2001 $4,000,000
April 1, 2002 4,000,000
October 1, 2002 4,000,000
April 1, 2003 4,000,000
October 1, 2003 4,000,000
April 1, 2004 Balance of Unpaid Principal
Principal payments may be accelerated upon the occurrence of certain events
specified in Section 307 and Article 5 of the Indenture. The interest payable on
this Security on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the thirtieth day (whether or not a Business
Day), as the case may be, immediately preceding such Interest Payment Date. Any
such interest not so punctually paid shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture. Payment of the principal of and interest on this
Security will be made by wire transfer to a United States dollar account
maintained by the Holder of this Security at a Depository Institution in the
United States as reflected on the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
Dated: _______, 1996 SLM INTERNATIONAL, INC.
By: _________________________
Name: _____________________
Title: ____________________
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Senior Secured Notes Due April 1, 2004 described
in the within-mentioned Indenture.
________________________________, as Trustee
By: ____________________________
Name: ______________________
Title: _____________________
Dated: _______, 1997
(BACK OF SECURITY)
This Security is one of a duly authorized issue of Securities of the
Company designated as its Senior Secured Notes Due April 1, 2004 (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate original principal amount to $_____________
(plus the aggregate amount of all Secondary Securities issued), issued under an
indenture (herein called the "Indenture"), dated as of March __, 1997, between
the Company, the Guarantors listed therein and _____________________, a banking
corporation organized and existing under the laws of the State of New York, as
trustee (herein called the "Trustee," which term includes any successor Trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, obligations and immunities thereunder of the Company, the
Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms and
conditions of the Indenture are incorporated herein by this reference, and by
acceptance hereof, the Holder of this Security assents to all of the terms and
conditions of the Indenture. Certain capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
The Securities are subject to voluntary redemption upon not less than 30
nor more than 60 days' notice by first-class mail, at any time, as a whole or in
part, at the election of the Company, at a Redemption Price equal to 101% of the
principal amount being redeemed, together in the case of any such redemption
with accrued interest thereon to the Redemption Date, all as provided in the
Indenture. In addition, upon the occurrence of any Asset Sale or the issuance of
any new equity securities of the Company, the Company may, and in certain
circumstances shall be required to, offer to redeem Securities in accordance
with the terms of the Indenture.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the
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relevant Regular Record Date referred to on the face hereof. Securities (or
portions thereof) for whose redemption and payment provision is made in
accordance with the Indenture shall cease to bear interest from and after the
date fixed for redemption.
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal of all
the Securities may be declared, or may become, due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of Requisite Holders. The Indenture
also contains provisions permitting the Requisite Holders, on behalf of the
Holders of all of the Securities, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and the consequences of such defaults. Any such consent or waiver by
or on behalf of the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place, and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose in New York, New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to, the Company and the Security Registrar duly executed by,
the Holder hereof or its attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $5,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
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No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
Customary abbreviations may be used in the name of a Holder 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).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
___________________________, ________________________________.
[FORM OF NOTATION ON NOTE RELATING TO GUARANTY]
Sport Maska Inc., Maska U.S., Inc., #1 Apparel, Inc., #1 Apparel Canada
Inc., St. Xxxxxxxx Manufacturing Canada Inc., SLM Trademark Acquisition, Inc.
and SLM Trademark Acquisition Canada Corporation (hereinafter referred to as the
"Guarantors," which term includes any successor or additional Person under the
Indenture referred to in the Security upon which this notation is endorsed) have
unconditionally guaranteed (i) the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at stated maturity, by
acceleration, declaration or otherwise, the due and punctual payment of on the
overdue principal of, premium, if any, and interest on the Securities, to the
extent lawful, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms set
forth in Article Ten of the Indenture, and (ii) in case of any extension of time
of payment or renewal of any Securities or any of such other obligations, that
the same will promptly be paid in full when due or performed in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
The obligations of each Guarantor to the Holders and the Trustee pursuant
to the Guaranties and the Indenture are expressly set forth in Article Ten of
the Indenture and reference is hereby made to such Indenture for the precise
terms of the Guaranties made therein.
The Guaranties shall not be valid or obligatory for any purpose until the
certificate of authentication on the Securities upon which this Guaranty is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.
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SPORT MASKA INC.,
as Guarantor
By:____________________________
Name:
Title:
MASKA U.S., INC.,
as Guarantor
By:____________________________
Name:
Title:
#1 APPAREL, INC.,
as Guarantor
By:____________________________
Name:
Title:
#1 APPAREL CANADA INC.,
as Guarantor
By:____________________________
Name:
Title:
X-0
XX. XXXXXXXX XXXXXXXXXXXXX
XXXXXX INC.,
as Guarantor
By:____________________________
Name:
Title:
SLM TRADEMARK ACQUISITION, INC.,
as Guarantor
By:____________________________
Name:
Title:
SLM TRADEMARK ACQUISITION CANADA
CORPORATION,
as Guarantor
By:____________________________
Name:
Title:
ASSIGNMENT FORM
I/We assign and transfer this Security to:
-------------------------------------------------------
Insert assignee's soc. sec. or tax ID no.:_____________
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
(Print or type assignee's name, address and zip code)
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and irrevocably appoint_________________________________________
_______________________________________________________ agent to
transfer this Security on the books of the Company. The
agent may substitute another to act for him or her.
Dated: ______________ Signed:_____________________________
----------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
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NOTICE OF HOLDER TO ELECT REDEMPTION
If you want to elect to have this Security purchased or redeemed by the
Company pursuant to Sections 423, 424, 425 or 901 of the Indenture, check the
box and complete the following:
__ an election to require redemption is hereby being made.
$_________________ (principal amount of this Security with respect to which
an election to require redemption is being made)
Dated: ______________ Signed:_____________________________
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
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